SHRM-CP / SHRM-SCP Certification Exam: Behavioral Competencies - Leadership - Ethical Practice

Behavioral Competency 2—Ethical Practice
It is important for HR professionals to understand the demand for ethical practice. Everyone expects a level playing field, and that requires employers to be doing what is expected for employees, customers, and shareholders.

Three subcompetencies comprise the Ethical Practice competency.

They are defined by SHRM6 as follows:
- Personal integrity Demonstrating high levels of integrity in personal relationships and behaviors
- Professional integrity Demonstrating high levels of integrity in professional relationships and behaviors
- Ethical agent Cultivating the organization’s ethical environment and ensuring that policies and practices reflect ethical values

Key Concepts
- Ethical business principles and practices (e.g., transparency, confidentiality, conflicts of interest)
- Anonymity, confidentiality, and privacy principles and policies
- Codes of conduct

Definition
According to SHRM, “Ethical Practice is defined as the ability to integrate core values, integrity, and accountability throughout all organizational and business practices.”
Personal integrity is a personal choice to uphold certain moral and ethical standards. Professional integrity defines the professional who consistently and willingly practices within the guidelines of a chosen profession under the obligation of a code of ethics. Ethical agent means someone who, with strong internal guidance, practices ethical behavior.

What Are Ethics?
Ethics are the rules or standards that govern conduct of individuals within a profession. They are based on a moral philosophy. That philosophy holds that there are differences between right and wrong or good and bad. Ethics are the standards people use to guide their decision-making with the intent that outcomes are fair to those involved.
Unethical behavior is that which is inconsistent with the stated values, norms, and beliefs of the organization’s stakeholders.

Proficiency Indicators for All HR Professionals
Ethical practice for all HR professionals relies on these key behaviors. All HR professionals are expected to conduct themselves according to these requirements. SHRM has published a professional Code of Ethics for HR professionals. You will find it at https://www.shrm.org/about-shrm/Pages/code-of-ethics.aspx. It is something you should read, understand, and follow in your daily job.

Maintaining Confidentiality
Confidentiality refers to data. Privacy refers to people. So, recognizing that HR professionals work frequently with confidential information, maintaining that confidential status is critical. Handling such information requires respect for the intimate and classified nature of the information. Keeping those secrets is an expectation of all HR professionals.

Acting with Personal, Professional, and Behavioral Integrity
Personal conduct of HR professionals must meet a standard as high or higher than others are expected to meet. Integrity is the inner expectation people have for themselves that causes them to act in accordance with a code. That code expects honesty and forthrightness in all activities. Frequently, organizations publish written ethics codes, specifying exactly the expectations that exist for personal behavior.

Responding Immediately to All Reports of Unethical Behavior or Conflicts of Interest
When other people are suspected of acting unethically, it is up to the HR professional to react with appropriate challenges. That may involve a formal investigation or a simple coaching of the individual involved. Doing nothing is not an appropriate option.

Empowering All Employees to Report Unethical Behavior or Conflicts of Interest Without Fear of Reprisal
Employees at all levels must feel welcome to report observations of unethical behavior exhibited by others, even their bosses. If employees don’t feel safe in doing so, it becomes a cancer that can grow and consume the organization over a short period of time.

Showing Consistency Between Espoused and Enacted Values
Everyone in the organization must be able to witness the leaders doing what they demand of others. Organizational values are valid only if they are supported by daily decisions from the executive suite. People notice those things and will be slow to support values that are not supported by executives. “Do as I say, not as I do,” doesn’t work.

Acknowledging Mistakes
Denial is a reaction that may work in court, but it rarely proves helpful in the employment context. If an HR professional has made an error, it is always preferable to admit the mistake and extend an offer to correct it. Most of us appreciate people who admit that they have goofed. We don’t so much appreciate someone stonewalling us. Building confidence and trust in the HR department depends on people admitting and correcting mistakes when they happen.

Driving the Corporate Ethical Environment
Charles D. Kerns writes in Pepperdine University’s Graziadio Business Review, “Values drive behavior and therefore need to be consciously stated, but they also need to be affirmed by actions. Driving ethical behavior with values and attitudes requires that there be alignment among values, attitudes, and behavior.”

This table shows examples of this alignment between each of the virtuous values, associated attitudes, and behavior.

Table: Values, Attitude, and Ethics and How They Relate

Applying Power or Authority Appropriately
Abusing power is the shortest route to violate a trust. If employees are to trust and support an employer organization, the leaders must wield power and authority appropriately and with discretion. Decisions must be made in ways that support the employment relationship rather than undermining it. Power can be corrupting; successful HR professionals are people who understand the concepts of fairness and equality.

Mitigating the Influence of Bias
Perhaps the most difficult image to see is the self-image. We tend to see ourselves as we think we are rather than as others see us. That is simply human nature. It is important for HR professionals to make special efforts to seek feedback from those they interact with so they can make adjustments to their behavior that may be appropriate. Identifying personal bias is not always easy. Once identified, assuring that personal bias doesn’t influence business decisions is even more difficult. It is not uncommon for individuals to create justifications for their decisions that deny impact of personal bias when in actuality bias is driving the decision. Bias is ingrained and can come from personal experiences reaching back into childhood. Once treated unfairly by someone in a particular group (e.g., race, gender, age, disability), the sense of ill treatment carries over into future relationships and decision-making.

Maintaining Appropriate Levels of Transparency in Organizational Practices
As it has been used in recent times, applied to organizations, transparency means the opposite of secrecy. Related to HR professionals, transparency means making information available to employees, stakeholders, and even sometimes the public, to explain policy changes and even benefit issues. The latest legislative push has been directed at compensation transparency. That means employers are required to permit employees to discuss their compensation openly and that of others in the group. In the private sector, such discussions have been generally prohibited historically. Expectations have changed. Openness is now the order of the day. In truth, such openness makes it more difficult to cover up differences in pay between men and women in the same job or how job schedules are assigned to a racially mixed group of workers.

Ensuring That All Stakeholder Voices Are Heard
An obvious prerequisite is the identification of all stakeholders for the organization. Then, as issues arise, reach out to each for input to the discussion. The downside of not doing this is that people will feel left out and ignored. None of us wants to be ignored. Invite participation and input.

Managing Political and Social Pressures when Making Decisions
HR professionals are in the unique position of brokering compromise between opposite views on issues such as benefits versus budget restrictions, cultural celebration versus production requirements, and confidentiality of records versus transparency of investigation outcomes. There are always going to be pressures from those of higher rank in the organization and sometimes from outside social standings. Many employers are being pressured to permit employee use of recreational marijuana while federal law continues to hold the substance illegal. Reconciling these differences is often the job of the HR professional. Sometimes, it takes the wisdom of Solomon.
There comes a time in most people’s lives when there is pressure from a supervisor, manager, executive, or other influential player who would have you do something unethical. While the action may not be illegal, you recognize it as crossing the line on ethics. The question is, “What will you choose to do?” Going against the wishes of the power-holder may cause you a negative career impact. Agreeing to the unethical action may cause harm to someone else. How you choose to handle that conundrum will determine your personal and professional ethics. Professional HR managers must put their jobs on the line from time to time to stand up for ethics. Remember the military comparison. Just because your boss tells you to shoot someone else, you remain responsible for your own actions. “Because my boss gave me an order” is no excuse for doing something you know is wrong.

Proficiency Indicators for Senior HR Professionals
At the senior level in the profession, ethical practice takes on greater importance because of the impact of the decisions being made. These added elements are additions to the basic ethics requirements for all HR professionals.

Empowering Senior Leaders to Maintain Internal Controls and Create an Ethical Environment to Prevent Conflicts of Interest
Executives must be leaders, but they must also follow policies and values established by the CEO and board of directors. From time to time pressures arise to do something expedient that would actually violate a policy or a corporate value. An example is making an exception to the corporate commitment for equal pay when an executive chooses to hire a highly qualified female candidate at a rate below market value simply because she appears willing to accept a low offer. Such exceptions can undermine the organization’s declaration that it values equal pay treatment for all of its workforce. Senior leaders need to understand they have a responsibility to oppose such violations of values.

Maintaining Contemporary Knowledge
With changes in local, state, and federal laws added to the changes in research about employee management issues, professionals in human resource delivery positions are challenged every day to maintain current knowledge. It is a never-ending process. If you happen to fall behind, your organization’s reputation can suffer, it can lose its ability to recruit top talent, and it can miss important compliance requirements. Maintaining current knowledge is an imperative.

Establishing Credibility
Acceptance at the executive table requires HR professionals to be accepted as credible contributors among organization executives. Credible reputation is based on the ability to inspire belief. Belief is created when experience shows there is more honesty and accuracy than missed expectations. Credibility goes beyond talk and promise. It is based on demonstrated accomplishments.

Challenging Conflicts of Interest
Conflicts of interest occur with more frequency than one might imagine. When the purchasing manager has stock in the vendor organization, there is a potential conflict of interest. When the HR professional has a personal interest in the recasting of a compensation policy because it can result in a substantial pay increase, there is a potential conflict of interest. When the CEO wants to hire her neighbor’s daughter on a summer internship even though the company is laying off workers, there is a potential conflict of interest. These situations should be identified and challenged by the HR professional. Conflicts of interest undermine the organization’s values and can occur at every level of the organization.

Withstanding Pressure when Developing Strategy
One conflict of interest that arises frequently for management people is the interest to protect or grow their slice of the organization. Getting more budget dollars, more headcount, or more time on the executive committee agenda can be strong motivating forces leading to bias in decision-making about organizational policy. HR professionals have the need to constantly be aware of motivations that cause managers and executives to take policy positions. Counteracting such bias takes skill and commitment to the organization’s well-being.

Set the Standard
HR professionals contribute to performance standards by demonstrating behavior that is both legal and ethical. It is hard for employees, let alone managers and supervisors, to follow behavior standards when they see people in HR doing things that violate those standards. If people in HR have poor attendance or tardiness records and suffer no penalty, other departments begin to wonder why they should not also ease up on disciplinary action for the same type of problems in their organization.

Balancing Organizational Success with Employee Advocacy
HR professionals are unique in that they have two masters. The organization relies on HR to help establish and enforce standards and rules. The organization’s employees also rely on HR to be an advocate when there has been inappropriate treatment. Complaints of sexual harassment often put HR into that dual role. The employer depends on HR to help control legal liability by conducting an appropriate investigation, gathering all the evidence available. When the management is actually at fault, employees depend on HR to be honest and bring in an investigation finding that supports their complaint as valid.

Developing HR Policies
One of the most exciting parts of the HR management function is the development of employment policies. In organizations such as government agencies, there are extensive rule books that describe procedures and policies for almost any conceivable requirement. In entrepreneurial organizations, initially there are no policies. They have to be written without the benefit of historical references within the organization. HR professionals get to work with executives to identify policy needs and then draft new policies. They have responsibility for gathering data that compares with alternative policies. Ultimately, data supporting whatever policy is recommended should stand out above other alternatives. Data includes input from executives and managers, analysis of industry standards and expectations, and even competitor policies. Cost analysis or forecasting for each option is often helpful.

Creating HR Strategy
Louise Allen offers this, “Deeper knowledge and understanding of your business goals and business model can identify potential threats and opportunities in the quantity and quality of human resource required by your organization. This in turn identifies the key components of your HR strategy and the virtuous circle of providing whatever your organization needs for success.”9 So, once you have your business goals and business model well in hand, the question becomes, “How can we get HR functions to support those business requirements?”
Like any other creative effort, there will likely be multiple drafts and reviews before a final strategy is approved. Remember always that HR has a value-added mission to support the organizational reasons for being if it is to survive as an internal portion of the company. If that isn’t done, executives may decide to outsource the HR functions to someone who will provide the necessary support.

Making Decisions Aligned with Organizational Strategies and Values
Consistency of policy interpretation is critical to employees feeling they are being treated fairly. Americans have an innate belief that employers should treat their workers fairly. “Fair” is not a legal requirement, except for the common law requirement that employers offer “good faith and fair dealing.” Every individual will be carrying around their own measuring tool to assess decisions based on how fair they are. When a decision doesn’t pass the fairness test, discomfort, disgruntlement, and discord soon follow. When one department terminates someone for poor attendance and another department only gives a warning to an employee with a similar attendance record, there will be cries of unfairness. It is up to HR professionals to assure that these opposing conditions don’t happen.
You should be able to write down your organization’s strategies and values. Based on those lists, you may assess the quality of decisions made in any department on any issue.

Communicating the Vision
Once executives have developed and described the organization’s vision, it is up to HR to support and communicate that vision to the workforce. That communication often happens through training sessions. They can be classroom events, online seminars, webinars, or some other form of training. Ultimately, every employee needs to understand and support the vision their leaders put forth. If the vision includes treating employees with dignity, then an open door policy with access to managers and executives on a timely basis may be appropriate. Treating customers with respect may also be part of the vision. Training employees to be courteous in their approach to customers is part of the vision implementation requirement.

Maintaining a Culture of Ethics
“Do as I say and not as I do” doesn’t work very well as an ethical model. People will comply with almost any requirement if they see their superiors also complying with that requirement. If the company doesn’t allow employees to telecommute and it becomes known that managers are telecommuting, a schism develops in the workforce. How serious it is will depend on how many employees find the behavior contrast distasteful and if discipline has resulted in some employee cases. Remember, a perception of fair treatment is a strong requirement in the employment relationship. Lose that, and you may see turnover rates increase.

Aligning All HR Practices
Ethical behavior requires that all interests under the control or influence of HR professionals be joined in the effort to support those ethical decisions. Think about what HR professionals must cover.
- Legal and regulatory compliance
- Labor union relationships
- Employee motivation
- Employee discipline oversight
- Global and cultural effectiveness
- Organizational leadership
- Support for creation and implementation of organizational vision, mission, policies, and other behavioral expectations
- Recruiting and hiring
- Employee training
- Diversity programs
- Workforce leadership and coaching managers on leadership issues
- Oversight of ethical expectations
- Employee communication
- Consultation on business decisions representing the employee viewpoint
- Periodical review of employee programs to assure effectiveness

Usually, on the job, several of these areas of HR influence will be in play at the same time. Balancing them with one another is an expectation of a certified HR professional.

Summary
If HR managers don’t demonstrate personal and organizational integrity, employees are likely to also demonstrate absence of integrity. Transparency, honesty, and confidentiality are key components of an effective ethics program. For some people, ethics is simply doing the right thing in each circumstance. For others, ethics represents compliance with professional standards of conduct. Every day, an HR professional is likely to encounter one or more ethics dilemmas. How you react to those problems will determine what your organizational culture really is, not what you claim it is. Decision-making is integral to ethics requirements. It starts with the most senior executive and then applies to each subordinate manager, supervisor, and employee.

HR professional behavioral standards are expected to conform to the HR Professional Code of Ethics, published by SHRM.

Key components of the code include the following:
- Professional responsibility
- Professional development
- Ethical leadership
- Fairness and justice
- Conflicts of interest
- Use of information