Fundamentals of Human Resource Management 5th Edition by Raymond Noe, John Hollenbeck, Barry Gerhart, Patrick Wright

Exercise 17

HOW CAN HRM HELP MAINTAIN AN ETHICAL CULTURE?
On some level, the choice to behave ethically is always a personal choice. However, there are some measures that organizations can take to promote ethical conduct. And many of those efforts can start or be supported by human resource professionals.
One approach, for example, is to create a climate of trust. Businesspeople can readily see that trust provides a strong foundation for all kinds of business relationships, including purchase contracts, labor-management agreements, and employees' confidence in the fairness of supervisors' decisions. People are more likely to trust an organization, manager, or employee when they see evidence of competence, openness and honesty, concern for stakeholders including employees and the community, reliability in keeping commitments, and identification with the organization in the sense that an individual's values match up with the values expressed by the organization. HR professionals can provide performance feedback, training, coaching, and rewards to foster the development of many of these drivers of trust. Job design in which employees are empowered to deliver excellent customer care, make well-crafted products, or deliver other valued outcomes helps to align individual practices with an organization's highest values.
Another way to maintain an ethical culture is to define ethical conduct and ethical abuses and to respond appropriately when these are detected. Ethical conduct should be rewarded. Employee development programs should include goals for the trust-building ethical practices of leaders, and developmental work assignments should include opportunities to try out those kinds of behavior. Ethical abuses should be punished, not ignored or hidden. When ethical violations are tolerated, employees take away the message that the organization is not actually serious about ethics. HR professionals can support these objectives with performance measures and pay policies that reward ethical conduct, never ethical lapses.
Imagine that you work in the human resource department of a company that sells medical equipment. One of the salespeople, who has an enormous amount of student loans, is tempted to misrepresent the uses of the equipment in order to increase his sales and therefore the commissions he earns. As an HR professional, how much can you do to shape a salesperson's conduct so that it remains ethical (and legal)?