Chapter Six

Employee
Stakeholders
And
The Corporation
Copyright 2003 by SouthWestern, a division of
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Chapter Topics
1.

2.

3.

4.

5.
6.

Employee stakeholders: The

workforce in the 21st century
The changing social contract between
corporations and employees
Employee and employer rights and
responsibilities
Discrimination, equal employment
opportunity, and affirmative action
Harassment in the workplace
Whistle-blowing versus
organizational loyalty

Copyright 2003 by South-Western, a division of

Thomson Learning

Employee Stakeholders:
The Workforce In The 21st
Century
Within the context of the digital economy the following
changes with employees and stakeholders occur:

A shift to knowledge work

The concept of a job for life is dying- NO LIFE TIME JOB
Compensation, income, and the social distribution of benefits
are shifting (down for low-middle professionals; up for highly
skilled)
Quality of work life is not inherent in the uses of technology

Five predicted trends in the work-life of employees

include:

Demographics will drive a growing focus on family, personal,

and spiritual matters
Employees will demand schedules that work for them
Internet-age values will take deeper root
A back-to-basics trend
It will get harder to tell work and home lifestyles apart

Copyright 2003 by South-Western, a division of

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Employee Stakeholders:
The Workforce In The 21st
Century
Several demographic trends that were
predicted have been and are being realized:

The workforce is aging (AGE DISCRIMINATION)

Managerial leadership positions are more
difficult to fill
Women entrants are increasing (HARRASMENT)
Workforce cultures are mixing (Conflicting
values and beliefs)
The education gap continues (lack of skilled
trade workers, educational and skill challenges)
The level of education lags
The number of employees with disabilities is
expanding (discrimination)

Copyright 2003 by South-Western, a division of

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Employee Stakeholders:
The Workforce In The 21st
Century
The trends in the workforce
necessitate accommodation from
managers and employees. Moral
and legal conflict will likely increase
if action is not taken with regard to:

Age discrimination

Harassment

Health care provisions

Educational challenges

Paradigm shift toward a new work life

model
Copyright 2003 by South-Western, a division of

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Figure 6.2: Evolution of Work

and Family Life Models

Reasons Given by Women (and

Men) for the Lack of
Advancement of
Women in the Workplace

52% believed male stereotyping and

preconceptions of women were primary factors in
holding women back (25% of men supported this)
49% believed exclusion from informal networks of
communication was a primary reason (15% of men
supported this)
47% chose their own lack of general management
or line experience as a primary barrier to
advancement (82% of men supported this)

Employee Stakeholders:
The Workforce In The 21st
Century

The following
values were
identified as
motivators for
professionals:

Competitive pay
Benefits and
opportunities
A fair deal
Being valued
Decent relationships

Workforce 2000
related values
considered most
important include:

Recognition
Respect and dignity
Personal choice
Involvement at work
Pride in work
Quality of lifestyle
Financial security
Self-development
Health and wellness

Copyright 2003 by South-Western, a division of

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Employee Stakeholders:
The Workforce In The 21st
Century
Generational analysis looks at
differences among world views,
attitudes, and values of
generations of Americans:

GI generation
Silent generation
Baby boomers
Generation X
Generation Y

Copyright 2003 by South-Western, a division of

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Generational Issues

GI Generation born between 19011925

Silent Generation born between 1926

1944

Vietnam, civil rights, instant gratification

Generation X born between 19651981

Patriotism, self-sacrifice

Baby Boomers born between 19451964

Great Depression, World War II

Insecurity, value work/life balance

Generation Y born between 19822003

Ambitious, sense of entitlement, team vs.

individual

The Changing Social Contract

Between Corporations and
Employees

The social contract that has

historically defined the
employee/employer relationship
is known as the employment-atwill (EAW) doctrine.

The right of an employer to fire an

employee without giving a reason and
the right of an employee to quit when
he or she chooses

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Employee Rights

Rights based on a moral claim

Right to freedom
Right to well-being

Rights based on a principles

determined by law

Rights related to:

Minimum wage
Discrimination based on race, creed, age,
national origin, gender, or disability

Employee And Employer

Rights And Responsibilities
The ideal relationship between employer
and employees is one based on mutual
respect and trust.

A right can be understood as a moral

claim.

The moral foundation for employee rights

is based on the fact that employees are
persons.

The evolving social contract between

employers and employees still recognizes
employers power over physical and
material property, but the contractual
relationship aims in principle at balance,
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Employee And Employer

Rights And Responsibilities
Employers are obliged to:

Pay employees fair, competitive wages for work

performed
To provide safe working conditions
QWL

Employees are responsible for:

Fulfilling their contractual obligations to the

corporation

For following the goals, procedural rules, and work

plans

For performing productively

Timeliness

Avoiding absenteeism

Acting legally and morally

Respecting the intellectual and property rights of the

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employer

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Employee And Employer

Rights And Responsibilities
Major types of employee rights
in the workplace include:

Right not to be terminated without

just cause

Right to due process

Right to privacy

Right to workplace health and

safety

Right to organize and strike

Rights
regarding
closings
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Due Process
Requirements

Right to a public hearing

Right to have peer evaluations
Right to obtain external arbitration
Right to an open, mutually
approved grievance procedure

Employee And Employer

Rights And Responsibilities
Employees right to privacy
remains one of the most debated
and controversial rights. Areas
centered around issues of
privacy include:

Technology use

Polygraph and psychological testing

Workplace surveillance

Internet use

Drug testing

Genetic
discrimination
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Legally-Upheld Privacy
Violations

Intrusion
Publication of private matters
Appropriation of an employees name for
commercial uses
Eavesdropping on employee conversations
and retrieving or accessing employee e-mail
(if unauthorized)
Permissible inquiries (if job related):

Criminal history inquiries

Credit history inquiries

Guidelines for
Employee
Monitoring Policies

Inform employees not to assume privacy in the

workplace
Require employees to acknowledge the
companys privacy policy in writing
Use private information only for legitimate
purposes
Limit access to private information about
employees to only those with a need to know
Obtain signed permission releases and waivers
before using an employees name or photograph
in any commercial advertisement, promotional
material or training film

Discrimination, Equal
Employment Opportunity,
And Affirmative Action
Recently, discrimination has surfaced in
a number of categories including:

Racial profiling
Income disparities
Ratio of female compensation compared to
male

Examples of discriminatory practices

have been found in:

Recruitment

Screening

Promotion

Termination

Conditions of employment

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Four Steps for Managers

to Use When Preparing
Corporate Privacy Policies

Prepare a privacy impact

statement
Construct a comprehensive privacy
plan
Train employees who handle
personal information
Make privacy part of social
responsibility programs

Discrimination, Equal
Employment Opportunity,
And Affirmative Action
Affirmative action programs are a
proactive attempt to recruit
applicants from minority groups to
create opportunities for those who
would be excluded from the job
market.
Affirmative action as a doctrine is
derived from several ethical principles
that serve as bases for laws:

Principle of justice
Utilitarian principle
Rights principle

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Affirmative Action

Affirmative action does not justify hiring unqualified

minority group members over qualified white males. All
individuals must be qualified for the positions in
question
Qualified women and minority members can be given
preference morally, on the basis of gender or race,
over equally qualified white males to achieve
affirmative action goals
Qualified women and minority members can be given
preference morally over better-qualified white males,
also, to achieve affirmative action goals
Companies must make adequate progress toward
achieving affirmative action goals even though
preferential hiring is not mandatory

Discrimination, Equal
Employment Opportunity,
And Affirmative Action

Reverse discrimination is alleged to occur when

an equally qualified woman or minority member
is given hiring preference over males.

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Harassment In The
Workplace
Harassment remains among the
most prominent civil right issues
in the workplace.
Forms of harassment include:

Coercion

Favoritism

Indirect harassment

Physical conduct

Visual harassment

Sexual harrasment
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Whistle-Blowing Versus
Organizational Loyalty
DeGeorge has identified five
conditions when whistle-blowing is
morally justified.

Five instances when whistle-blowing

is not justified have been suggested.

There have been twelve guidelines

that offer factors which should be
considered before deciding to blow
the whistle on an employer.

Four managerial steps to prevent

external whistle-blowing have been
suggested.
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Which Whistle-Blowing Is
Justified

When the firm, through a product or policy,

will commit serious and considerable harm to
the public (as consumers or bystanders), the
employee should report the firm
When the employee identifies a serious threat
of harm, he or she should report it and state
his or her moral concern
When the employees immediate supervisor
does not act, the employee should exhaust
the internal procedures and chain of
command to the board of directors

Five Conditions Under Which

Whistle-Blowing Is Justified
(cont)

The employee must have documented evidence

that is convincing to a reasonable, impartial
observer that his or her view of the situation is
accurate and evidence that the firms practice,
product, or policy seriously threatens and puts
in danger the public or product user
The employee must have valid reasons to
believe that revealing the wrongdoing to the
public will result in the changes necessary to
remedy the situation. The chance of succeeding
must be equal to the risk and danger the
employee takes to blow the whistle

When Whistle-Blowers
Should Not Be Protected

When divulging information about legal and

ethical plans, practices, operations, inventions,
and other matters that should remain
confidential and that are necessary for the
organization to perform its work efficiently
When an employees personal accusations or
slurs are irrelevant to questions about policies
and practices that appear illegal or irresponsible
When an employees accusations do not show a
conviction that a wrongdoing is being
committed and when such accusations disrupt
or damage the organizations morale

When Whistle-Blowers
Should Not Be Protected
(cont)

When employees complain against a

managers competence to make daily work
decisions that are irrelevant to the legality,
morality, or responsibility of management
actions
When employees object to their discharge,
transfer, or demotion if management can show
that unsatisfactory performance or violation of
a code of conduct was the reason for the
decision

Managerial Steps to
Prevent the Need for
Whistle-Blowing

Develop effective internal grievance procedures

and processes that employees can use to report
wrongdoings
Reward people for using these channels
Appoint senior executives and others whose
primary responsibilities are to investigate and
report wrongdoing
Assess large fines for illegal actions. Include
executives and professionals who file false or
illegal reports, who knowingly market dangerous
products, or who offer bribes or take kickbacks