TOPIC |

THE MORAL DIMENSIONS OF AN ECONOMIC SYSTEM

ECONOMIC SYSTEM
An ongoing process where people exchange material goods and personal services. In support of a wide range of human interests. Moral dimension: resources are accessed and manipulated. Goods and services are exchanged and distributed. Specified by what it does for people.

Physiological

To develop as human beings, we need to satisfy

Psychological

Technological Aesthetic Intellectual

Spiritual Needs

 Resources are given generously in nature. No one has a sole title to any of them. Needs, ability and willingness to expend efforts dictate how the products of resources are generated and distributed. It is not morally required that everyone has the same or equal share of resources. ALL human beings: have equal opportunity to access and use the available resources. Each person has the right to a minimum share of the resources.

SOUND ECONOMIC SYSTEM

Will ensure: Fairness in the access to resources and the exchange and distribution of goods and services. Prohibit any man-made obstacles like discrimination on irrelevant grounds that interfere with anyones access to resources. No single group of people in the system has a disproportionate share of resources. Everyone has a right to a fair share. Society has an obligation to use its government and social agencies to re-allocate resources whenever they are unjustly distributed among its members. How well an employee is paid depends on how well they are rated by their employers; via Performance Appraisal.

EMPLOYMENT AND WAGES

Criteria of a good manager (although portrayed in a sarcastic manner).
GOOD MANAGERS:

Attract capable people into the business Keep their turnover low. Secure their loyalty to the Company and its objectives. Maintain and increase their productivity level.

TO KEEP GOOD EMPLOYEES

Offer competitive salaries. Health coverage, savings and pension plans. Provide with on-and off-the-job training. Give them effective job performance feedback. Participate in decision-making. Opportunities to move to higher-paying positions with more responsibilities (promotion). Safe working conditions.

To hire employees; should look into these aspects: 1. The moral right to employment. 2. Fair hiring practices. 3. Affirmative action and preferential treatment. 4. Wages. 5. Equal pay for equal work. 6. Equal pay for comparable work. 7. Share of the return on resources.
(bonus, salary increment, etc)

1. THE MORAL RIGHT OF EMPLOYMENT

Thousands of people out of work Effects of Shutting Down, Relocating Operations and Downsizing of American Plants and Industries Suffered Economic Loss Psychological blow to employees selfesteem Different careers Employees start over with new employers

 Are all businesses morally obligated to employ some minimum number of people to achieve a satisfactory level of employment in the society in which they NO operate? Society adopted an Economic System; extensive freedom in its commercial enterprise. Freedom includes the right to: 1. Hire and keep employees who are needed in order to meet the demands of a particular business. 2. Operate efficiently at a satisfactory level of profit Hiring of people with education, skills and personality traits - best-suited to the operations. Freedom of employers to hire and retain employees they see fit; no member of the society has a moral claim on any specific job offered in the private sector.

2. FAIR HIRING PRACTICES

Fair Hiring Practices The Natural Law Moralist
-Screening practices based on race, gender, age or religious preference -(immoral and violate the right of anyone to be treated with dignity) -Employers ensure to discriminate on characteristics that have nothing to do with the individuals job performance Morally wrong? -Yes, direct act of discrimination that is morally wrong in itself

The Utilitarian

The Cultural Relativist

Same as the Natural Law Moralist -But judgement dependent upon the overall consequences of these practices Morally wrong? -Refuse to co-operate in anti-discriminatory practices -Would attempt to determine if a better state of affairs would result from compliance

-Would argue that if there are no laws against discrimination, then hiring and promotion policies would have to follow whatever customs acceptable to that particular society Morally wrong? - Would approve compliance with an employers wishes if discrimination is an accepted social practice and not against the law.

3. AFFIRMATIVE ACTION AND PREFERENTIAL TREATMENT

Range all the way from setting specific numbers of minorities to be moved into positions over a given time period. Proportion of the positions they hold begins to approach their numerical distribution in the general population. Establish the overall principle that employment and promotion opportunities are open to all, regardless of gender, race, age or disability. Natural Law and Utilitarian Moralists - would agree that everyone should have an equal opportunity to compete for any job he or she is qualified to do and would endorse this sense of affirmative action. Cultural Relativists - would fall back on societys customary practices and would not unreservedly agree to the idea of equal opportunity.

Preferential treatment Commits the very offence they are supposed to remedy. Selection of person purely on the basis of characteristics (have nothing to do with performance). Setting specific quotas for minorities - an immoral act. To curb the issue of Preferential Treatment: 1. Adopt a going-forward policy of equal opportunity. 2. Select people solely based on their qualification. 3. Follow preferential treatment for a definite period of time.

AFFIRMATIVE ACTION

PREFERENTIAL TREATMENT

Affirmative Action deals with: -Employment -Promotion opportunities (open to all) -Regardless of: -Gender -Race -Religion -Age -And so forth

Preferential treatment is the practice of: -Hiring -Promoting members of minority groups (in preference to those from non-minority groups)

4. WAGES
1. What wages are employees morally entitled to? 2. Are they entitled to certain level of benefits in addition to basic wages? Answer: Employees wages - determined by the job market. In larger industries - salaries include basic wages and bonuses, benefits e.g. paid holidays, vacations, sick leaves, medical and dental insurances, savings and pension plans. In smaller industries - what an enterprise can afford to give (just the monthly salary).

5. EQUAL PAY FOR EQUAL WORK

Established as part of United States labour law. People performing same kind of work must be paid the same salaries. However, the principle is not taken into consideration when employees who can do the work faster or more efficiently (should be paid more). Race, gender, age and handicaps have no bearing on pay treatment where equal work is concerned.

6. EQUAL PAY FOR COMPARABLE WORK

Pay same salaries if it can be demonstrated that jobs involving different responsibilities, e.g. Tree trimmers and lorry drivers (require the same level of education, skill, knowledge and experience). NO Is comparable work a requirement of justice? Market is still the most efficient allocator or jobs. Eventhough skill and knowledge requirements may look the same for many jobs, other factors (e.g. long working hours, varying risk factors and physical environment) have to be considered. No one is excluded from obtaining high-paying jobs on irrelevant grounds. Women have, for years, been paid lower wages although they have the same skills and knowledge as the males. If women are not given the chance to be employed, this is discriminatory - no equal opportunity for women.

7. SHARE OF THE RETURN ON RESOURCES

There is a relationship between the amount of material resources a company uses and its obligation to distribute the return realised from those resources to societys members. Return - does not depend solely on the amount of resources used, but also on how well a company manages them and how productive its workers are. Managers and workers - have the right to a fair share of the return in proportion to their contribution. Top managers usually think they make the biggest contribution, expecting to receive the biggest share. Shareholders have to right to a fair share of their companies return.

RANKING AND RATING

Performance Appraisal - how well employees are paid depends on how well their Supervisors think they are doing their jobs. Small businesses - Informal Appraisal; employers observe their employees directly; not very complex. Large companies - Formal Appraisal grade, rank and rate employees against coworkers. Better performers receive better pay.

ETHICAL IMPLICATIONS FOR PERFORMANCE APPRAISAL

Express their dignity and worth as individuals through their work. Work provides a means to achieve personal goals. Contribute to their own well-being, family and society. No opinion is more important to them than what their employers think of their work performance. Managers have a duty to prepare sound Performance Appraisals. If employees question the fairness of their remuneration, their morale and performance will be affected. There is moral dimension to this responsibility

KEY ETHICAL GUIDELINES FOR PERFORMANCE APPRAISAL

GUIDELINES
Set the Objectives

EXPLANATION
Subordinates need to have clear and concrete objectives set out for the appraisal period, and they need to provide their own input to these objectives.

Get the Feedback

Employees have the right to get feedback on their performance on a regular basis. It would be unfair to wait until the end of the appraisal period to tell someone that he or she is performing poorly.
Performance must be measured against valid criteria. It would be unjust to knowingly measure an employees performance using a plan which does not apply in some significant respect to the operation being managed. Only those who have a good knowledge of what an employee is doing should be allowed to rate his or her performance. - Adequate facts/information on subordinates accomplishments and failures to ranking and rating sessions. Subordinates have a right to counselling, coaching and training to help improve their performance.

Use valid Criteria

Have the essential information on subordinate

Have the right for improvement

SUMMARY
OF TOPIC | THE MORAL DIMENSIONS OF AN ECONOMIC SYSTEM

An economic system is an ongoing process where people exchange material goods and personal services in support of an entire range of human interests.

If managers want to hire and retain productive and loyal employees, they need to offer competitive salaries and benefits, adequate training and feedback on performance, opportunities for promotion, a fair way of remedying injustices without fear of reprisal and safe working conditions.

Managers and their agents are obliged to follow fair hiring practices, and to avoid discrimination against people on grounds of gender, race, age and disabled status when those characteristics are irrelevant to the job.

Affirmative action deals with employment and promotion opportunities being open to all, regardless of gender, race, religion, age and so forth.

Preferential treatment is the practice of hiring or promoting members of minority groups in preference to those from nonminority groups.

Managers, workers and shareholders have a claim to a fair share in proportion to their effort to use resources efficiently and productively in the enterprise.

All employees are subject to a formal or informal appraisal process. However, performance appraisal systems have an ethical dimension. People express their dignity and worth through work; formal and informal public recognition of their work affirms their self-worth.

There are several key ethical guidelines in relation to performance appraisal: 1.Have the right for improvement. 2.Get the feedback. 3.Use valid criteria. 4.Have the essential information on subordinate; and 5.Set the objectives.

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