Ethical Performance Management Meaning, Principles

‘Management Ethics’ is related to social responsiveness of a firm. It is “the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation. It is a standard of behaviour that guides individual managers in their works”.

“It is the set of moral principles that governs the actions of an individual or a group.”

Ethics deals with whether to perform certain kinds of action or not in line with what is acceptable to the society as a whole and therefore, ethics is the process of deciding as to what is good for human beings and also of rational thinking aimed at establishing ‘what values to hold and when to hold them’?

The key principles of ethical performance management are as follows:

• This system is designed to make transparency in its operation and all the parties involved in performance management system respect each other’s needs, values, and preoccupations.
• An ethical performance management system directs its employees to respect the core values of the organization. Because the ethics practiced by the organization is in conjunction with its environment. On the other side, the organization respects its employees and provide good working environment so that they will generate the result as per the potential.
• It emphasizes individual responsibility for personal decision making, behaviour, and action rather than collective responsibility.
• This seeks to build or change culture to a state in which the vision of the organization includes its employees, its customers, and the society at large. The values and norms of organization support employee’s decision making, behaviour, and actions consistent with an ‘ethical’ vision.
• This system put emphasis on employees respecting and actively considering the ethical concerns and issues of all stakeholders, rather than focusing merely on shareholders alone.
• This system provides fair and free environment to its employees so that employees can get the opportunity to scrutinize the basis upon which the important decisions were made.

Steps for ethics:

• Develop a code, and make ethical performance a strategic priority. A relevant code of ethics, conduct or similar policy that sets clear objectives, standards and expectations is a key requirement for ethical performance. A code needs to be supported by a focus on ethical performance in wider decision making.
• Engage, communicate and train your staff. Engage staff and other stakeholders such as suppliers, investors, regulators and consumer communities, through effective and informative communication. Good, regular and consistent communication and training will help to embed an ethical culture.
• Set the tone from the top. Senior management teams must show leadership and be seen to live the organization’s ethical values. Only once that happens can employees get in step and ensure the whole organisation lives those values.
• Provide support routes for staff. Organisations need to develop clear routes for reporting suspected fraud and violation of company policies on ethical behaviour. Too many organisations are weak in this regard and must adopt a zero-tolerance approach.
• Measure effectiveness of your ethics programme. To ensure best practice, organisations need both to measure their ethical performance and to foster open discussion.

Code of ethics

Transferring Information

The human resource professionals should ensure truthfulness of communication. It should be in respect of performance feedback and counselling and help top leadership in taking informed personnel decision.

Fairness and Justice

For employee’s work achievements and their contribution in improving organizational competence and performance, there should be fairness and justice in respect of rewards and recognitions.

Human resource professionals are ethically responsible for promoting fairness and justice in the organization and they must enable a culture where ethical behaviour and action is a key performance criterion.

Developing Standards

Human resource professionals must strive to meet the highest standards of competence and ethics. The purpose is to keep abreast of organizational strategy, mission, and objectives on a continuous and consistent basis.

They must drive ethics training of top managers and employees on a wide scale. They have to educate them on the significance of ethics in attaining high-performance standards. The HR professionals shall transmit ethics to employees, managers, and external stakeholders through performance management system.

HR Responsibility

In organizations, the HR professionals are responsible for adding value to by developing HR functions. They are also responsible for maintaining the balance between performance improvement and ethical behaviour in the organization.

The HR professionals shall act as ethics custodians and train and develop human resources for dealing effectively with relationship issues of morality, integrity, and honesty with other stakeholders particularly customer, suppliers, and society at large.

Ethical Leadership

In making performance management a truly business-aligned, transparent, and credible management endeavor, human resource professionals must exhibit individual leadership. They should act as ethics communicator to improve the situation for their organizations.

Conflict Management

They must safeguard the interest of all stakeholders to eliminate the conflict arising between manager-employees, employer-employee and employees-organization on certain issues related to rewards and recognition etc.