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UNIT – 2Ethics in Marketing, Finance and HRM Q1) What are the Ethical issues in Marketing Mix?A1) Ethical issues in marketing arise from the conflicts and lack of agreement on particular issues. Parties involved in marketing transactions have a set of expectations about how the business relationships will take shape and how various transactions need to be conducted. Each marketing concept has its own ethical issues, which we will discuss in this chapter. Market research has experienced a resurgence with the widespread use of the Internet and the popularity of social networking. It is easier than ever before for companies to connect directly with customers and collect individual information that goes into a computer database to be matched with other pieces of data collected during unrelated transactions. The way a company conducts its market research these days can have serious ethical repercussions, affecting the lives of consumers in ways that have yet to be fully understood. Further, companies can be faced with a public backlash if their market research practices are perceived as unethical. Unethical practices in marketing can result in grouping the audience into various segments. Selective marketing may be used to discourage the demand arising from these so-called undesirable market segments or to disenfranchise them totally.Examples of unethical market exclusion may include the industry attitudes towards the gay, ethnic minority, and plus-size groups. Ethics in Advertising and PromotionIn the early days of existence of corporations, especially during 1940s and 1950s, tobacco was advertised as a substance that promotes health. Of late, an advertiser who does not meet the ethical standards is considered an offender against morality by the law.Sexuality is a major point of discussion when ethical issues in advertising content are considered. Violence is also an important ethical issue in advertising, especially where children should not be affected by the content. Some select types of advertising may strongly offend some groups of people even when they are of strong interest to others. Female hygiene products as well as hemorrhoid and constipation medication are good examples. The advertisements of condoms are important in the interest of AIDS-prevention but are sometimes seen by some as a method of promoting promiscuity that is undesirable and strongly condemned in various societies. A negative advertising policy lets the advertiser highlight various disadvantages of the competitors’ products rather than showing the inherent advantages of their own products or services. Such policies are rampant in political advertising. Delivery ChannelsDirect marketing is one of the most controversial methods of advertising channels, especially when the approaches included are unsolicited.Some common examples include TV and Telephonic commercials and the direct mail. Electronic spam and telemarketing also push the limits of ethical standards and legality in a strong manner. Deceptive Marketing Policies and EthicsDeceptive marketing policies are not contained in a specific limit or to one target market, and it can sometimes go unseen by the public. There are numerous methods of deceptive marketing. It can be presented to consumers in various forms; one of the methods is one that is accomplished via the use of humor. Humor offers an escape or relief from various types of human constraints, and some advertisers may take the advantage of this by applying deceptive advertising methods for a product that can potentially harm or alleviate the constraints using humor.Anti-Competitive PracticesThere are various methods that are anti-competitive. For example, bait and switch is a type of fraud where customers are "baited" through the advertisements for some products or services that have a low price; however, the customers find in reality that the advertised good is unavailable and they are "switched" towards a product that is costlier and was not intended in the advertisements.Another type of anti-competitive policy is planned obsolescence. It is a method of designing a particular product having a limited useful life. It will become non-functional or out of fashion after a certain period and thereby lets the consumer to purchase another product again. Q2) What are the Unethical Marketing Practices in India?A2) Ethical issue in adverting has become debatable question. Ethical advertising uses the truth to deceive the public. Today advertising industry has been facing criticism as the advertisement which is being telecasted does not follow norms of ethics. Some people describe it as false, unlawful, and untrue. Today, an advertisement industry faces lot of criticism which does not follow norms of ethics. Vulgarity: Advertisements that are specifically pinned pointed for being inappropriate by almost all audiences. In the new era of television the commercials of televisions have also changed, certain companies often show vulgar ads regarding their products to attract more consumers and thus do a cheap promotion of their products. Some advertisements are related to deodorants and toothpastes. Deception: It is a false advertisement which uses misleading, false or unproven information to advertise products to consumers. Duracell ultra-power batteries are a form of deceptive advertisement. Puffery: It includes promotional material that makes boastful statements about a product or service. It is basically used by the business in order to rise up the image of the products. Red Bull: The famous energy drink Red bull shows in advertisement that after drinking it gives you wings but we actually knows that it does not grows wings on your back after drinking it. Axe Deodorant: Axe deodorant (chocolate fragrant) ad which shows that after spraying it that whole body turns to chocolate which is practically not at all possible. Stereotypes: It is a readymade image of a person or relationship that is easily recognizable. The famous washing powders like Rin,Tide, wheel etc. and Wild stone fragrance do always use a women in order to promote their brands. When characters have been shown in occupational roles, men generally work outside the home, and women are in domestic roles such as parent, spouse, or homemaker. These ads promote stereotypes of women and girls as softer, weaker, and more passive by means of a less active pace, more fades and resolves, and softer background music. In addition, boys and girls typically represent different personal and social characteristics, with boys being more autonomous, and aggressive. Controversial advertising: Controversial advertising are those which violates norms for social value and personal ideals. It is designed to break through the advertising cluster to capture attention and create buzz and also to attract an audience. Controversial cases can be seen in Amul Macho TV commercial Surrogate advertising: It is form of advertising which is used to promote banned products like cigarettes and alcohol, in the disguise of another product. IPL was one of the greatest brands which used kingfishers to promote initiatives. Comparative advertising: Comparative ads are those which involve names of competitors in an ads and comparing one and more attributes by an advertising. The famous controversial advertisements were Cherry blossom Vs kiwi, Colgate Vs Pepsodent. One of the famous controversial comparative advertisements was Rin and Tide Natural where in the ad of Rin it directly showed the competitor product Tide and committed that it is a better and superior washing powder then that. Another controversial comparative advertisements were Colgate and pepsodent where pepsodent claimed directly that pepsodent now better than Colgate strong teeth delivers 130% germ attack power. Uses Children In advertising: In Market, Children are becoming prominent part for advertisement. Marketers are using children in their advertisements to increase sales. This is done because Indian children are allowed to watch each & every advertisement in the television, so marketers are taking advantages of it. There are many commercial ads where marketers use children even the products are not for children like, Super Nirma, Surf Excel etc. which is irrelevant for marketing point of view. These types of ads are basically to win emotion of the customers. Using children in advertisements particularly in India where many people can’t afford the products but children force them to buy those products which affect their economic levels, so marketers should go for children advertisement for their relevant products only. Q3) Explain the Ethics in Advertising and Types of Unethical Advertisements. A3) Surrogate Advertising – In certain places there are laws against advertising products like cigarettes or alcohol. Surrogate advertising finds ways to remind consumers of these products without referencing them directly. Exaggeration – Some advertisers use false claims about a product’s quality or popularity. A Slogan like “get coverage everywhere on earth” advertises features that cannot be delivered. Puffery – When an advertiser relies on subjective rather than objective claims, they are puffing up their products. Statements like “the best tasting coffee” cannot be confirmed objectively. Unverified Claims – Many products promise to deliver results without providing any scientific evidence. Shampoo commercials that promise stronger, shinier hair do so without telling consumers why or how. Stereotyping Women – Women in advertising have often been portrayed as sex objects or domestic servants. This type of advertising traffics in negative stereotypes and contributes to a sexist culture. False brand comparisons – Any time a company makes false or misleading claims about their competitors they are spreading misinformation. Children in advertising – Children consume huge amounts of advertising without being able to evaluate it objectively. Exploiting this innocence is one of the most common unethical marketing practices Advertising is considered unethical when1. It gives false information.2. It degrades the rival’s product or substitute product.3. It makes exaggerated or tall claims.4. It is against the national and public interest.5. It gives misguiding information,6. It conceals information that vitally affects human life.7. It is obscene or immoral. Q4) Explain the Scope of Ethics in Financial ServicesA4) Ethics in general is concerned with human behavior that is acceptable or "right" and that is not acceptable or "wrong" based on conventional morality. General ethical norms encompass truthfulness, honesty, integrity, respect for others, fairness, and justice. They relate to all aspects of life, including business and finance. Financial ethics is, therefore, a subset of general ethics.Ethical norms are essential for maintaining stability and harmony in social life, where people interact with one another. Recognition of others' needs and aspirations, fairness, and cooperative efforts to deal with common issues are, for example, aspects of social behavior that contribute to social stability. In the process of social evolution, we have developed not only an instinct to care for ourselves but also a conscience to care for others. There may arise situations in which the need to care for ourselves runs into conflict with the need to care for others. In such situations, ethical norms are needed to guide our behavior. As Demsey (1999) puts it: "Ethics represents the attempt to resolve the conflict between selfishness and selflessness; between our material needs and our conscience." Ethical dilemmas and ethical violations in finance can be attributed to an inconsistency in the conceptual framework of modern financial-economic theory and the widespread use of a principal-agent model of relationship in financial transactions. The financial-economic theory that underlies the modern capitalist system is based on the rational-maximizer paradigm, which holds that individuals are self-seeking (egoistic) and that they behave rationally when they seek to maximize their own interests. The principal-agent model of relationships refers to an arrangement whereby one party, acting as an agent for another, carries out certain functions on behalf of that other. Such arrangements are an integral part of the modern economic and financial system, and it is difficult to imagine it functioning without them. The behavioral assumption of the modern financial-economic theory runs counter to the ideas of trustworthiness, loyalty, fidelity, stewardship, and concern for others that underlie the traditional principal-agent relationship. The traditional concept of agency is based on moral values. However, if human beings are rational maximizers, then agency on behalf of others in the traditional sense is impossible. “To do something for another in a system geared to maximize self-interest is foolish. Such an answer, though, points out an inconsistency at the heart of the system, for a system that has rules requiring agents to look out for others while encouraging individuals to look out only for themselves, destroys the practice of looking out for others". The ethical dilemma presented by the problem of conflicting interests has been addressed in some areas of finance, such as corporate governance, by converting the agency relationship into a purely contractual relationship that uses a carrot-and-stick approach to ensure ethical behavior by agents. In corporate governance, the problem of conflict between management (agent) and stockholders (principal) is described as an agency problem. Economists have developed an agency theory to deal with this problem. The agency theory assumes that both the agent and the principal are self-interested and aim to maximize their gain in their relationship. A simple example would be the case of a store manager acting as an agent for the owner of the store. The store manager wants as much pay as possible for as little work as possible, and the store owner wants as much work from the manager for as little pay as possible. This theory is value-free because it does not pass judgment on whether the maximization behavior is good or bad and is not concerned with what a just pay for the manager might be. It drops the ideas of honesty and loyalty from the agency relationship because of their incompatibility with the fundamental assumption of rational maximization. "The job of agency theory is to help devise techniques for describing the conflict inherent in the principal-agent relationship and controlling the situations so that the agent, acting from self-interest, does as little harm as possible to the principal's interest" (DE George, 1992). The agency theory turns the traditional concept of agency relationship into a structured (contractual) relationship in which the principal can influence the actions of agents through incentives, motivations, and punishment schemes. The principal essentially uses monetary rewards, punishments, and the agency laws to command loyalty from the agent. Q5) What are the Corporate Crime? Explain White Collar Crime and Organized Crime? A5)Corporate crime, also called organizational crime, type of white-collar crime committed by individuals within their legitimate occupations, for the benefit of their employing organization. Such individuals generally do not think of themselves as criminals, nor do they consider their activities criminal. Related to corporate crime is professional white-collar crime, which is crime committed by those who identify with crime and make crime their sole livelihood. Most criminologists divide white-collar crime into two major types: corporate crime and occupational crime (crime committed during the course of a legitimate occupation, for one’s own benefit). Most corporate criminals do not view their activities as criminal, since their violations are usually part of their occupational environment. Corporate offenders remain committed to conventional society and do not identify with criminality. Their inappropriate behaviour is often informally approved by occupational or corporate subcultures While corporations may complain about the burden of federal bureaucracies and their enforcement of regulations, guilty companies generally have more expertise, staff, and time to devote to their defense than the government has for prosecution. Regulatory agencies have been criticized as being ineffective in enforcing laws against powerful corporations. Often the penalties for law violation are too small to act as deterrents. Offenders are seldom convicted and rarely get jail time. Many are permitted to plead nolo contendere (no contest) to charges, which enables them to escape the stigma of being labeled “guilty” or “criminal.” The appointed directors of agencies are often drawn from the very corporations to be regulated; these same companies may then hire retiring agency employees. In addition, the amount of money governments assign to corporate crime generally is much smaller than that allocated for street crime.White-collar crime is non-violent wrongdoing that financially enriches its perpetrators These crimes include misrepresentation of a corporation's finances in order to deceive regulators and others A host of other offenses involve fraudulent investment opportunities in which potential returns are exaggerated and risks are portrayed as minimal or non-existent Some definitions of white-collar crime consider only offenses undertaken by an individual to benefit themselves. But the FBI, for one, defines these crimes as including large-scale fraud perpetrated by many throughout a corporate or government institution.In fact, the agency names corporate crime as among its highest enforcement priorities. That's because it not only brings "significant financial losses to investors," but "has the potential to cause immeasurable damage to the U.S. economy and investor confidence." Falsification of Financial InformationMost corporate fraud cases involve accounting schemes that are conceived to deceive investors, auditors, and analysts about the true financial condition of a corporation or business entity. Such cases typically involve manipulating financial data, the share price, or other valuation measurements to make the financial performance of the business appear better than it actually is. The majority of corporate fraud cases involve accounting schemes that are conceived to deceive investors, auditors, and analysts about the true financial condition of a corporation or business entity. Such cases typically involve manipulating financial data, the share price, or other valuation measurements to make the financial performance of the business appear better than it actually is.For instance, Credit Suisse pleaded guilty in 2014 to helping U.S. citizens avoid paying taxes by hiding income from the Internal Revenue Service. The bank agreed to pay penalties of $2.6 billion. Also in 2014, Bank of America acknowledged it sold billions in mortgage-backed securities (MBS) tied to properties with inflated values. These loans, which did not have proper collateral, were among the types of financial misdeeds that led to the financial crash of 2008. Bank of America agreed to pay $16.65 billion in damages and admit to its wrongdoing. Self-DealingCorporate fraud also encompasses cases in which one or more employees of a company act to enrich themselves at the expense of investors or other parties. Self-dealing is when a fiduciary acts in their own best interest in a transaction rather than in the best interest of their clients. It represents a conflict of interest and an illegal act, and can lead to litigation, penalties, and termination of employment for those who commit it. Self-dealing may take many forms but generally involves an individual benefiting — or attempting to benefit — from a transaction that is being executed on behalf of another party. For example, front-running is when a broker or other market actor enters into a trade because they have foreknowledge of a big non-publicized transaction that will influence the price of the asset, resulting in a likely financial gain for the broker. It also occurs when a broker or analyst buys or sells shares for their account ahead of their firm's buy or sell recommendation to clients. Most notorious are insider trading cases, in which individuals act upon, or divulge to others, information that isn't yet public and is likely to affect share price and other company valuations once it is known. Insider trading is illegal when it involves buying or selling securities based on material non-public information, which gives that person an unfair advantage to profit. It does not matter how the material nonpublic information was received or if the person is employed by the company. For example, suppose someone learns about nonpublic material information from a family member and shares it with a friend. If the friend uses this insider information to profit in the stock market, then all three of the people involved could be prosecuted.Other trading-related offenses included fraud in connection with mutual hedge funds, including late-day trading and other market-timing schemes. Q6) Write any 3 Major Corporate Scams in India.A6) 1. Satyam computer (Satyam)Satyam was the first major fraud of its kind, which shocked the country and led to tightening of regulations, reporting and governance mechanisms. The fraud had the same shock and awe effect like what Enron and Lehman brothers had in the USA. The enactment of strictest ever regulation, namely, Sarbanes and Oxley, was the outcome of these frauds and many countries followed with enactment of similar regulations.Promoters of the company had devised ingenious methods to commit frauds with large scale dummy billings for services rendered to foreign clients. As a logical step forward, fake proceeds were shown to have been received in multiple bank accounts, opened in various countries. Many of these accounts were later found to be non-existing. The company was consistently showing large bank balances in its financial statements, which were not consistent with other IT companies considering the size of its business. The whole of these operations was overseen by the promoter with the assistance of a separate staff working on this, what I would call a fraud factory.At the closure of financials and to satisfy auditors, fake bank confirmations and statements were generated and produced as evidence of balances to auditors. The amount involved in the fraud was around USD 1 billion. Surprisingly, Satyam received awards for excellence in corporate governance, conferred by some reputed organisations. Its promoter had over a period acquired respect of the industry and an overwhelming persona. In this background, sudden admission of fraud by the promoter, came as a rude shock to the country,All said and done, Satyam had a sound business model and portfolio of large international clients. Government had to initiate an unprecedented rescue mission to save the company, by first dismissing the board members of the company, followed by the appointment of professionals as board members led by Deepak Parikh. Ultimately, the company was sold to Mahindra group and is now a major part of the successful technology business of the Group. 2. Kingfisher Airlines (KLA)KLA was another corporate fraud, which was first of its kind in the Airlines industry, which ultimately led to fall of the empire of King of good times. The airline was launched by flamboyant Vijay Mallya, well known as King of good times. Over a short period of time KLA established a reputation of finest private airline of the country, with high quality service standard and was enjoying second highest market share after Jet Airways. The company resorted to borrowing funds by all possible means, including related parties and pledge of Kingfisher brand by over-valuation of brand value. Good times did not last long, and Vijay Malia had to sell its family jewel liquor and beer business to liquidate part of its debts.Currently Vijay Malia is in the UK and fighting battle in courts to stop his repatriation into India. Consortium of banks led by SBI has exposure of around Rs, 9000 crores to now a virtually bankrupt airline. Most employees lost or quit jobs as salaries were nor paid for months together. The company went to the extent of defaulting in depositing statutory dues like PF, TDS deducted from salaries to government authorities. Kingfisher seems to me more of a case of business failures rather than corporate frauds. There were a lot of red flags which could have been picked by lenders and regulators, which were ignored and could have saved airlines which had good potential. Lending against a brand which had never been a practice is a glaring example. A Satyam type quick rescue operation could have parachuted the airline into safety and saved lenders money and employees’ jobs. 3. Jet AirwaysThe airline, which was once India’s pride, landed in IBC for rescue. After multiple bidding over 18 months, Jet finally had a bidder (with an investor), who is non- experienced in the airlines business.Jet had acquired an unassailable position in the industry and was a preferred airline for the business community, top industrialists and CEOs of the country. Its service standards were its USP.Lenders’ exposure to the airlines, amounts to around Rs 8500 crores and total liabilities of around Rs.25000 crores including dues to vendors, employees, AAI, lessors of aircrafts. The company indulged in multiple fraudulent practices of -Overstating commission paid to a Dubai related party based in Dubai for years. This resulted in significant overstatement of expenses and underreporting of profits. diversion of funds by giving loans of around Rs.3353 Crores accounting of invoices of fake on Jet miles other similar transactions Employees lost jobs with huge arrears of salaries. Further, acquisition of low-cost service airline, Sahara Airlines - in hindsight, the acquisition proved to be its nemesis and accelerated the downfall of Jet Airways. Q7) Write the Role of SEBI in Ensuring Corporate Governance.A7) Founded in 1988, the Securities and Exchange Board of India (SEBI) has the role to protect investors and regulate the financial market. SEBI initiatives in corporate governance are based on the Securities and Exchange Board of India Act and aim to prevent fraudulent practices. The organization is responsible for enforcing rules and regulations to promote orderly development in the stock market. As an investor, you must comply with these rules and follow the code of conduct.The Indian securities market is one of the most trusted in the world. However, things haven't always been this way. Back in the '80s, everyone was trying to find loopholes in the system and get rich through fraudulent schemes. Today, this market is tightly regulated by the Securities and Exchange Board of India, whose role is to prohibit unfair trade practices and protect investors' interests, among other functions.The organization became autonomous and got the statutory status in 1992. Soon, it has emerged as the regulator of stock markets in India, overseeing the activities of investors, securities issuers and market intermediaries. SEBI is also responsible for carrying out investor awareness and training programs and regulating major transactions. Furthermore, it monitors credit rating agencies, custodians, bankers, brokers and other financial market players. Several departments exist within SEBI, including but not limited to the Corporation Finance Department (CFD), the Legal Affairs Department, the Market Regulation Department and the Office of International Affairs. The CFD, for example, oversees all matters related to corporate governance and accounting standards. The Office of Investor Assistance and Education (OIAE), on the other hand, handles investors' complaints, such as those related to the transfer of shares. Corporate governance encompasses the mechanisms, rules and practices by which companies are operated and controlled. It aims to mitigate conflicts of interest between shareholders and promote ethical decision-making, transparency and integrity at the executive level. The role of SEBI in corporate governance is to ensure these rules are implemented and followed by all parties. For example, the organization ensures that companies issuing securities use fair practices and disclose relevant information to the shareholders. It also regulates takeovers, listing agreements of stock exchanges, corporate restructurings and more. SEBI guidelines for corporate governance are designed to provide a safe, transparent environment for investors and prohibit fraudulent or unfair practices, like insider trading. The role of SEBI in ensuring ethical standards among corporations became even more important in 2018 when the organization imposed additional compliance conditions. For instance, big firms will be required to have at least one woman independent director and separate chairpersons and CEOs. Furthermore, listed companies must disclose related-party transactions and hold a specific number of annual general meetings. SEBI initiatives in corporate governance are largely based on the recommendations made by the Kotak committee in March 2018 and aim to enhance transparency. Q8) Write the Key Functions of SEBI.A8) In addition to its role in corporate governance, SEBI has protective, regulatory and developmental functions. The organization protects investors by prohibiting malpractices related to securities and promoting fair trade practices. Additionally, it aims to educate them on money management, trading and finances in general.Its regulatory functions have the role to ensure that corporations and financial intermediaries alike follow its guidelines and code of conduct. The end goal is to keep the financial market running smoothly. The developmental functions of SEBI aim to promote computerized trading and modernize the market infrastructure. These initiatives have led to a reduction in fraud and unfair practices. For example, the organization requires companies that buy or sell stocks to register for a dematerialization (Demat) account online, which helps reduce bureaucracy and simplifies the process of holding investments. The Demat system allows traders to work from anywhere and mitigates the risks associated with paper shares, such as trading delays or thefts. Q9) Explain the Cadbury Committee Report, 1992A9) The chairman's role in securing good corporate governance is crucial. Chairmen are primarily responsible for the working of the board, for its balance of membership subject to board and shareholders' approval, for ensuring that all relevant issues are on the agenda, and for ensuring that directors, executive and non-executive alike, are enabled and encouraged to play their part in its activities. Chairmen should be able to stand sufficiently back from the day-to-day running of the business to ensure that their boards are in full control of the company's affairs and alert to the obligations to their shareholders. It is for chairmen to make certain that their non-executive directors receive timely, relevant information tailored to their needs, and that they are briefed well enough on the issues arising at meetings for them to be effective board members.Given the importance and particular nature of the chairman's role, it should in principle be separate from that of the chief executive.If the two roles are combined in one person, it represents a considerable concentration of power. We recommend, therefore, that there should be clearly accepted division of responsibilities at the head of a company, which will ensure a balance of power and authority, such that no one individual has unfettered powers of decision. THE GENESISThe Cadbury Committee was set up in May 1991 by the Financial Reporting Council, the London Stock Exchange and the accountancy profession to address the financial aspects of corporate governance.Its chairman was Sir Adrian Cadbury. The sponsors were concerned at the perceived low level of confidence both in financial reporting and in the ability of auditors to provide the safeguards which the users of company reports sought and expected.The underlying factors were seen as the absence of a clear framework for ensuring that directors kept under review the controls in their business, together with the looseness of accounting standards and competitive pressures, both on companies and on auditors, which made it difficult for auditors to stand up to demanding boards. These concerns about the working of the corporate system were heightened by some unexpected failures of major companies and by criticisms of the lack of effective board accountability for such matters as directors' pay.Further evidence of the breadth of feeling that action had to be taken to clarify responsibilities and to raise standards came from a number of reports on different aspects of corporate governance which had either been published or were in preparation at that time. SUMMARY OF RECOMMENDATIONSThe boards of all listed companies should comply with the code of best practice set out by the committee.As many companies as possible should aim at meeting its requirements.The listed companies reporting in respect of years ending on or after 31 December, 1992, should make a statement about their compliance with the code in the report and accounts and give reasons for any areas of non-compliance.Companies should publish their statement of compliance only after they have been the subject of review by the auditors.The Auditing Practices Board should consider the extent and form that an endorsement by the auditors could take. Q10) What is the Importance of Workplace EthicsA10) Workplace ethics ensures positive ambience at the workplace. Workplace ethics leads to happy and satisfied employees who enjoy coming to work rather than treating it as a mere source of burden. Employees also develop a feeling of loyalty and attachment towards the organization. Organizations need to have fool-proof systems to measure the performances of individuals. Appraisal system needs to be designed keeping in mind employee’s performance throughout the year and his/her career growth. Periodic reviews are essential. It is mandatory for superiors to know what their subordinates are up to. You need to know who all are going on the right track and who all need that extra push. Workplace ethics ensures management guides and mentors their employees well. Appraisal and salary hikes should not happen just for the name sake. Workplace ethics is important as it enables management to treat all employees as equal and think from their perspective as well. Employees must have a say in their appraisal system. Transparency is essential. An employee is bound to move on after a year or so if he/she is not appreciated and rewarded suitably. It is indeed the organization’s loss when employees after being trained quit and move on. Do you think it is entirely the employee’s fault? Why would an employee move on if he/she is fully satisfied with his /her current assignment? Employees change primarily because of two reasons - Career growth and monetary benefits. Management needs to make employees feel secure about their job and career. Unnecessary favoritism is against workplace ethics. If you favor anyone just because he is your relative, the other team members are bound to feel demotivated and thus start looking for new opportunities. An individual’s output throughout the year should decide his/her increment. Organizations need to stand by their employees even at the times of crisis. You cannot ask your employees to go just because you don’t need them anymore or your work is over. Such a practice is unethical. How can you play with someone’s career? If an individual has performed well all through but fails to deliver once or twice, you just can’t kick him out of the system. Workplace ethics says that organizations need to retain and nurture talents. If you have hired someone, it becomes your responsibility to train the individual, make him/her aware of the key responsibility areas, policies, rules and regulations and code of conduct of the organization. Employees need to be inducted well into the system. They must be aware of the organization’s policies from the very first day itself. Workplace ethics also go a long way in strengthening the bond among employees and most importantly their superiors. Employees tend to lie if you do not allow them to take leaves. If you do not allow an employee to take leave on an important festival, what do you expect the employee to do? What is the alternative left with him? He would definitely lie. Do not exploit your employees and don’t treat them as machines. No employee can work at a stretch without taking a break. It is okay if they talk to their fellow workers once in a while or go out for a smoke break. Understand their problems as well. If you feel the problem is genuine, do not create an issue. It is but natural that once or twice they would definitely call their family members and enquire about their well-being. Superiors should not have a problem with that.It has been observed that organizations which are impartial to employees, lend a sympathetic ear to their grievances and are employee friendly seldom face the problems of unsatisfied employees and high attrition rate.
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