Ethics

Is It Time to Pay the Piper?

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This is an interesting old English expression. In today’s terms it refers to the ultimate cost of poor or self-indulgent behaviour. It seems employers around the globe have been demonstrating very poor behaviour when it comes to male and female compensation practices.

Where the pay equity issue is concerned, perhaps it is time for organizations to step up and pay the piper by way of addressing and absorbing the cost of the wage gap between men and women. Indeed, this seems to be a trend that is unfolding worldwide in various developed countries.

MacLean’s magazine released two versions of its cover in February; one for men, with a price of $8.91, and another for women, with a price of $6.99. A clever way to highlight the fact that in Canada men make 26% more in full-time wages than women.

This is a global issue. Let’s review some of the concerns around pay equity in other parts of the world:

Tesco, a UK grocery store chain is facing a 4 billion Euro pay equity law suit

The BBC is being accused of fostering a gender pay gap between its male and female reporters

Icelandic companies must now prove they are paying men and women equally, and get government certification

According to Stats Canada, Canadian working women make $0.74 cents for every dollar a man makes

The gender pay gap is a systemic issue in organizations, but that is no longer acceptable in most countries. It is time for all organizations to take an in-depth look at their compensation practices to see if there is a gender pay gap, and to assign resources to correct it.

It is high time for organizations to pay the piper, and to close the gender wage gap. The only way for them to do this is to implement and maintain a comprehensive and fair job evaluation process.

Discussion Questions:

  1. You have been asked by your VP of HR to research the job evaluation process and what it entails. Once your research is complete, you are to produce a 5-minute presentation for the board of directors focusing on the process necessary to complete a formal organizational job evaluation.

Visit the HR Council of Canada as a starting point for your research.

Pay Equity is Back

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Pay equity goes largely ignored.

Gender Pay Gap, 3d Illustration
Festa/Shutterstock

Pushed out of the forefront, it seems that businesses today can no longer pay males and females differently. It’s unreasonable that there is still a systemic problem in our society over equal pay for work of equal value, but the research says it’s true: women in Canada get paid 74.5 cents for every one dollar a male makes. The research also shows that our traditional reasons to justify this gap (that women have less education and work part time) does not hold water anymore.

According to a recent article in the Globe and Mail on global pay equity gaps, Canada is in the top ten of the world. This is not a good list to be top on; out of 34 countries, Canada rates seven in the world for highest percentage of wage discrepancy between the genders.

Click here to read the article.

Canada has to do better and proactively change our compensation practices. On a positive note, some provinces are aware that pay equity gaps are a problem that need to be addressed. On March 8, 2017, all parties voted unanimously to support to resolve the pay equity gap in Newfoundland and Labrador. Women in Newfoundland and Labrador earn an average of 66 cents to the male dollar of earnings.

Click here to read the article.

All organizations have to ensure they are meeting any pay equity legislation in their jurisdiction. Pay equity is closely tied to an organization’s design of their compensation system. Organizations have to ask themselves, would the design of our compensation system stand up to a pay equity due diligence test? If the organization has not completed a comprehensive job evaluation process it would be a very hard argument to defend.

Discussion Questions

  1. Please address each subsection of this question. Why is conducting job evaluations so important to
    • HR in general?
    • An organization’s compensation system?
    • Pay equity laws?
  1. What are some of the differences when conducting a general job evaluation as compared to a pay equity evaluation?

To Disclose or Not Disclose?

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What is the big workplace secret?

Employee compensation economy. Man working on laptop sitting next to young woman under money rain. Pay difference concept.
pathdoc /Shutterstock

We have it in the public sector: it is called the sunshine list, but should we have complete salary disclosure in the private sector as well?

In an interview with David Burkus, an Associate Professor of Management at Oral Roberts University, Sarah Green Carmichael from Harvard Business Review brings the topic of salary transparency right to the forefront.

Click here to read the complete article.

David Burkus is the writer of a book called, Under New Management: How Leading Organizations Are Upending Business as Usual. His research says that complete pay transparency makes for a better workplace for both employees and employers. His thesis is that when we keep salaries secret people feel they are underpaid and this breeds disengagement.

Click here to watch David Burkus speak on this issue.

Salary disclosure is a topic that many employees and employers are not comfortable talking about. But does it happen anyway in the workplace? Everyone has some idea of what their coworker makes, but no one has complete information, so assumptions are made and we know how often assumptions are wrong or inaccurate. Having access to accurate information helps: it can possibly create a more trusting and collaborate working environment. If so, perhaps more employers should consider removing the veil of salary secrecy, as David Burkus suggest.

Discussion Questions

  1. With a partner, have a debate and discuss the benefits and negatives of salary transparency in the workplace. Please research your arguments and plan on using your arguments to defend your position.

Motivation Gone Mad

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Concept of failure of a businessman--man fed to sharks
alphaspirit/Shutterstock

Our compensation studies focus on the push and pull of organizational rewards systems, and their direct link to employee behaviours. These systems are built on theories of human motivation, which guide our thinking about the way employees are supposed to react and respond in order to achieve organizational goals.

Usually these rewards systems focus on positive outcomes based on targeted goals. Positive outcomes are meant to reinforce constructive employee behaviours. What happens, however, when the pressure to achieve an expected goal overwhelms the employee’s ability to behave in a positive way?

The TD Bank Group has been in the news recently due to its targeted sales practices that have resulted in allegations of unethical and possibly illegal employee behaviours.

Click here to view the CBC report.

Click here to view the follow up CBC report.

While the allegations by employees in these reports are shocking, the revenue goals for the bank have been achieved. Bank profits have increased. Sales targets have been met. Underperforming employees have been placed on ‘Performance Improvement Plans’ to align expected behaviours with targeted sales-based performance objectives.

The questions must be asked: At what cost? Do the ends, in this particular situation, really justify the means?

This case appears to provide an extreme example of fear-based motivation. Fear of job-loss overrides the ethical judgement of employees and forces them into negative behaviours. The negative behaviours have a lesser consequence for employees than that of losing their jobs. In the context of Maslow’s hierarchy of needs theory (outlined in our compensation studies), job-loss for these employees means that they will be unable to provide food and shelter for themselves and their families. The choice to ensure that an employee’s personal food and shelter needs are met has a stronger pull than making ethically sound decisions for others.

This case points an accusing finger, not at the individual employees, but at the senior executive managers within the TD Bank Group, and at the system of rewards that are in place to motivate and influence the whole.

Discussion Questions:

  1. After reviewing the two articles, identify specific elements of motivational theory that are evident in employee reactions.
  2. As a bank manager, what types of rewards would you implement in order to influence employees to achieve profit-related targets?
  3. As an employee required to achieve these types of sales targets, how would you respond? What decisions would you make based on your personal ethics and values?

HR: The Gatekeepers of Ethical Behaviour

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Problem-solving concept. Bad and good
Rasstock/Shutterstock

The responsibility that keeps growing.

The RCMP Commissioner, Bob Paulson, issued a teary-eyed apology in response to decades-long direct and systemic sexual harassment claims that have plagued the RCMP. This apology was issued after a $100 million settlement in this case.

Click here to read about the apology.

Apologies are needed and are required as they are the fundamental rebuilding blocks of any human relationship. That being said, HR Professionals should strive to never have to apologize for their behaviour or the behaviour of their organization. Apologies for simple mistakes and mishaps are acceptable, but HR should never have to apologize for a systemic issue or a breach of ethics. It is HR’s job to ensure that there should be no need for apology in the first place.

The Human Resources function and the profession requires us to be the gate keepers of and for ethical proactive organizational behaviour. This requires an accountability and a responsibility to ensure ethical behaviour from all individuals within the organization.

Below are some of the ethical competency standards from the Chartered Professionals in Human Resources in Canada (CPHR):

  • Adhere to ethical standards for human resources professionals by modeling appropriate behaviour to balance the interests of all stakeholders.
  • Adhere to legal requirements as they pertain to human resources policies and practices to promote organizational values and manage risk.
  • Recommend ethical solutions to the organization’s leadership by analyzing the variety of issues and options to ensure responsible corporate governance and manage risk.

Click here to see the Canadian Centre of Human Resources Association (CPHR) HR competency Framework.

As rational managers it is our obligation as HR professionals to act not only rationally but also ethically. HR professionals cannot allow the unethical behaviour to seep knowingly or unknowingly into their organization.

HR ethical responsibility just keeps growing. HR has to use standards, policies and practices to ensure ethical organizational standards, and sometimes the pressure to behave unethically is overwhelming to the HR professional. That is when the HR professional must stand their ground and sometimes make very difficult ethical decisions.

When I was a young middle manager in HR with very little formal authority or organizational influence, I was confronted with a profound ethical situation. At that time I was working for a printing company that was allowing illegal immigrants, all women and their children, to come into the printing plant during the night shift and stuff flyers into newspapers. It was appalling.  These were dangerous sweatshop-like conditions, especially for young children. I brought this to the attention of the plant manager and the VP of HR. They told me that due the owner having a 51% controlling interest in the company they could not do anything about it.

I had to make a decision.

I was told the situation would not change. I made the decision to quit the HR position as I did not want to have any responsibility when things went wrong. It was a very hard decision at the time for personal reasons. I needed to be employed, but I could not stay with this organization and be compliant with unethical, illegal conduct.

Did I do enough? As I reflect back, I did not. I never reported this violation and this haunts me to this day. I do not know if it stopped or if a child ever got seriously hurt. I just walked away!

If you are ever in a workplace situation and you see your organization about to make an unethical decision, do not just walk away. Your professional voice must be heard!

Discussion Questions:

  1. Research a company that has been caught acting unethically in some way through a root cause analysis.
  2. Identify five key things HR could have done to prevent the ethical breach.