Throughout the 1960s, business ethics arose out of an increased awareness of matters such as environmental issues, corporate responsibility and social movements. These were a major focal point of the decade including civil rights, feminism and the start of the LGBTQ+ movement. Since then, business ethics have evolved beyond the basic moral code of right and wrong into an attempt to define what companies ought to do legally while retaining a competitive edge. 

What Are Business Ethics?

At their core, business ethics aim to secure a level of trust between corporations and their consumers by focusing on fair and equal treatment. Examples of business ethics in action relate to key issues like:

  • Integrity – Having a set of values that are central to how the company operates. This can also relate to transparency: the clear representation of factual information in its entirety.
  • Compassion – Ensuring people are treated fairly with empathy and respect.
  • Trustworthiness – Ensuring that promises made to customers, employees and business partners alike are fulfilled, securing the company’s reputation as dependable.
  • Accountability – Admitting when mistakes are made, making a genuine apology and taking actionable steps to rectify or make amends for the error (this can also relate to things like corporate social responsibility).

business ethics

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How Do They Relate to Human Resources?

Given that human resource management (HRM) deals primarily with employee-related issues within an organization, there are many links between the profession and the practice of business ethics. Organizational issues surrounding business ethics in human resources can relate to:

  • Equality and inclusion in the workplace, encompassing issues like disability, race, gender and sex. This might include providing accommodations for a person with an “invisible disability” (e.g. autism), or the fair pay and treatment of ethnic minority workers, who (as of 2020) make up nearly a quarter of the United States workforce.
  • Employment issues, concerning matters such as document forgery and nepotism (favoring pre-existing connections to the company, such as family members, over other prospective employees).
  • Cash and compensation plans relating to factors like salary and compensation. In many cases, HR departments are under pressure to increase base salary bands, particularly to top management roles requiring justification to retain them.
  • Privacy issues surrounding the right for individuals to protect their personal life. In HR terms, this can also relate to health and safety, with debate ongoing as to which activities are permitted ethically, which are not, and why.

Why Business Ethics Matter in HR

The reasoning behind business ethics is nuanced and wide-ranging, but two key aspects involve:

Maintaining Integrity

Rather than achieving success through unethical practices (thus risking damage to their reputation), an ethical organization strengthens its credibility through the culture it creates. This requires a clearly-defined ethics framework based on a set of values that aim to achieve fair and equal treatment for all. 

The level of formality given to its structure depends on the scale of the organization, but in all cases it has a code of key ethics at its core. Done well, this code is less about compliance-driven protocol  than it is about defining appropriate, kind and just behaviors in the workplace. 

Cultivating Healthy Working Environments

A study from 2018 found toxic work environments to have a significant impact on productivity and employee burnout. Toxicity in the workplace is another nuanced topic relating to workplaces operating under a “culture of fear”, where top-down pressure leads to unfair, and even punitive treatment of employees.

In the last few decades (particularly in light of shifting priorities arising from the pandemic), attitudes such as this have started to change, with greater focus on collaboration and mutual support within organizations and in turn, greater potential for increased productivity.

From Revolution to Evolution

In the continuing evolution of business ethics in human resources, HR professionals play a key role signified by their job title. Through cultivating an environment where everyone is accepted and valued, businesses can grow beyond the restrictions of a solely profit-orientated culture into one which is stronger, kinder, and altogether more human.