HRM

HRM & Legal Practice

HRM & Legal Practice

Introduction

During the 1990s, many large corporations created formal programs and offices dedicated to managing ethics and legal compliance. Most American corporations now have a formal ethics policy in place (Berenbeim, 1992; Center for Business Ethics, 1992), and close to a third of large companies have created formal ethics offices (Weaver, Trevino, & Cochran, 1999a). Meanwhile, the role of "ethics officer" has become sufficiently widespread that a professional society, the Ethics Officer Association, has been established.

Research suggests that a human resource (HR) orientation often is absent from corporate ethics programs. Our aim is to explain why this may be problematic and to recommend how HR managers can be more involved in corporate ethics initiatives, so that those initiatives achieve their goals of encouraging legal values in organizations. We propose that employees' evaluations of fairness, or justice, in the organization are important to achieving valuable ethics management outcomes, and that the HR function plays a key role in fostering fairness in the organization generally and in the specific context of ethics programs. Although issues of ethics in organization encompass much more than questions of fairness or justice, failure to foster justice in the organization can undermine organizational efforts to encourage legal values generally. Ethics management, in short, though not the same as fairness management, depends on careful handling of fairness issues within an organization. Consequently, the HR function should play a crucial role in organizations' efforts to deal with ethical issues, because HR's role is central to the management of fairness in contemporary organizations.

1. Status of HR in organizational ethics/compliance programs

Corporate ethics programs typically involve many components and initiatives, and research has cataloged these elements (Berenbeim, 1992; Center for Business Ethics, 1992; Weaver et al., 1999a). Expectations for legal values typically are communicated to employees via codes and policy documents, formal training programs, and messages from senior management. Ethics programs also often provide means for employees to communicate with management, sometimes anonymously through telephone "hotlines." These communication devices are used for reporting real or perceived ethical or legal problems, to solicit advice and counseling, or both. Also common are procedures for monitoring behavior so as to reward legal values and/or discipline unlegal values.

Empirical research suggests that HR staff are merely one among many categories of corporate staff who may be involved in managing ethics programs. One study of ethics programs in Fortune 500 service and industrial firms found that an HR officer ultimately was responsible for ethics/compliance management in 28 percent of responding firms (Weaver, Trevino, & Cochran, 1999b). But just as many firms (28%) vested responsibility for ethics in legal positions (e.g., general counsel), while 16 percent placed responsibility in distinct ethics or compliance departments, and 11 percent in audit and control functions, with the remaining firms selecting from among positions such as corporate secretary, public affairs, and corporate communications. This study also found that HR and legal departments were involved equally in ethics training, while legal and audit and control functions ...