Value-based decision-making in employment

Jul 7, 2011

Articles

What impact does management’s actions and employment-related decisions have
on the organisation’s value system? Are management’s actions and decisions
aligned with the organisation’s values, or is their divergence between what the
organisation professes to believe in and what its managers actually do? Are the
organisation’s employment relations practices aligned with its corporate governance
objectives? Do managers advance the interests of the organization (and therefore of
the shareholders) or their own interests only?

Take this all-too-common scenario: suppose that a senior employee is suspected of
dishonesty. Given the potential consequences for the organisation’s public or market
reputation and maybe out of concern for the future of their colleague, senior
management decide to give the wrongdoer an ultimatum: resign or face disciplinary
action. Fortunately for both, he decides to resign rather than face the consequences.
(Fortunately for him because his reputation remains intact; fortunately for the
company because it is able to avoid the reputational fall-out of the senior’s conduct).
A month or so later a more junior employee commits a similar transgression. This
time, however, management decide to show its disapproval and ‘zero tolerance’ of
this type of behaviour and forthwith suspend the employee pending a hearing that
eventually results in the employee’s dismissal. Upon receipt of a letter from the
employee’s lawyer or union complaining about inconsistent treatment of the
employee (for by now news about the senior’s lucky escape has become known),
HR’s advice is urgently sought. Typically, in this situation, management would ask
two questions: have we created some kind of precedent? If so, what’s the worst case
scenario, legally speaking? Upon being informed that the risk of a finding at the
CCMA or bargaining council that management had acted inconsistently, but that the
risk possibly can be limited with an early settlement offer at conciliation,
management heave a sigh of relief at the fact that the risk is under control.

Or perhaps this example: a manager insists that a particular employee, who is
perceived to be an under-performer (but whose performance ratings are average at
worst) should form part of a group of employees targeted for retrenchment. Despite
HR’s protestations that the individual falls outside of the ambit of the company’s
selection criteria, the manager is adamant that the employee must somehow be
brought into the net. While this might make the manager’s life easier, it poses legal
risks for the company. Fortunately, with good advice, the risk could possibly be
limited.

In both examples there is one question that management failed to ask, namely: how
do we justify our actions in terms of the company’s values? Is what we did (by letting
the senior go off virtually scot-free) reconcilable with our values of ‘transparency’,
‘integrity’ and such like? The longer-term damage done by not adhering to the
company’s values far exceeds the price of a risk-limiting settlement at the CCMA.

What does this mean in practice? For HR professionals in organisations, it is
imperative to start promoting compliance with labour law as a matter of good
governance and not merely as a business risk that needs managing. For the line
manager or business owner, it means that one would need to consider not only the
legal risks involved in employment-related decisions, but also how the decisions we
take affect the organisation’s value system and the interests of shareholders.

July 2011
Barney Jordaan, Maserumule Consulting
www.masconsulting.co.za
Tel: +2721 914 3321

This information is published for general information purposes and is not intended to constitute legal advice and should not be construed as such. Specialist legal advice should always be sought in relation to any particular situation. Maserumule will accept no responsibility for any actions taken or not taken on the basis of this publication. Consent must be obtained from Maserumule before the information provided herein is reproduced in any way. No person shall have any claim of any nature whatsoever arising out of, or in connection with, the information provided herein against Maserumule and/or any of its personnel.

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