Business D3
Review attachments.
Each question (2) must be minimum 200 words.
Use only the references attached.
It is important to write concisely, provide the chapter title, chapter heading, page, or paragraph number. Include in-text citations and a reference in a reference list. To see how to cite the eBook, go to Content and view the module, Learn to Use APA. The citation and reference information is on the right-side of the screen.
Discussion #1: Generally speaking, it is illegal to make hiring decisions based on race, color, religion, sex, and national origin. If you are the owner of a restaurant that features Thai food, are you breaking the law by hiring cooks and wait staff who are of Asian descent? Be sure to support your position through the use of course resources.
Discussion #2: Christine Porath, author of the article, “The Silent Killer of Workplace Happiness, productivity, and Health Is a Lack of Basic Civility”, offers advice to leaders and managers who may want to craft more civil cultures. She posits that toxic people should be weeded out before they join the organization by interviewing for civility, using structured interviews with behavioral questions. She also suggests that references be checked thoroughly, but to also go beyond checking provided references and to chase leads and hunches. Develop and discuss a minimum of 3 behavioral questions that you believe might help identify toxic people before they are hired. Be sure to support your response.
Week 3: Ethical Treatment of Employees – Workplace Culture
Theme 1: Safety/Civility
Your Person
·
OSHA’s Wall of Shame: Agency Targets ‘Severe Violators’
·
The Top 10 Bizarre Workers’ Compensation Cases for 2015
Your Psyche
·
Kareem Hunt faces more than baseline six-game suspension
·
The silent killer of workplace happiness, productivity, and health is a lack of basic civility
·
Chris Porath – “Mastering Civility: A Manifesto in the Workplace,” WJLA Interview
Your Money
·
Thinking About Using Payroll Debit Cards? Read This First
·
New Overtime Rules Suspended for Now
·
Are ESOPs Good Retirement Plans?
Theme 2: Freedom From Discrimination
Illegal Discrimination
·
The Pregnancy Discrimination Act and the Supreme Court: A Legal Analysis of Young v. U nited Parcel S ervice
·
Legal discrimination in four letters: BFOQ
·
The strange loophole that lets Hooters hire only female servers
·
Is it okay to hire cooks to match the cuisine? (part I)
·
Resources Legal Alerts Newsletters Articles Blogs Mobile Apps Subject-Matter Booklets State Law Guides Newsletter PDF EEOC Settles Beef With Restaurant
Legal Discrimination
·
The Hidden Obstacle to Great Corporate Culture: Unconscious Bias
·
Former Hooters Waitress Awarded $250,000 in Racial Discrimination Case
·
Lifestyle Discrimination: Is it Legal?
·
8 Ways Employers Can Discriminate Against Workers – Legally
·
Anne Arundel Medical Center Won’t Hire Smokers In The Future
·
Pay Transparency Is The Solution To The Pay Gap: Here’s One Company’s Success Story
·
If a Law Bars Asking Your Past Salary, Does It Help or Hurt?
·
Employers Must Use Caution When Basing Pay Decisions On Prior Salary History
·
Schumpeter: ESOP – When Workers Are Owners
·
Employee Rights When Working for Multinational Employers
·
EU to push for 40% quota for women on company boards
·
EU workplace headscarf ban ‘can be legal’, says ECJ
Chapter8: Manager’s Ethics: Getting, Promoting, and Firing Workers from The Business Ethics
Workshop was adapted by Saylor Academy and is available under a Creative Commons
Attribution-NonCommercial-ShareAlike 3.0 Unported license without attribution as requested by
the work’s original creator or licensor. UMGC has modified this work and it is available under
the original license.
http://www.saylor.org/site/textbooks/The%20Business%20Ethics%20Workshop
https://creativecommon
s.
org/licenses/by-nc-sa/3.0/
https://creativecommons.org/licenses/by-nc-sa/3.0/
Saylor URL: http://www.saylor.org/books Saylor.org
327
Chapter 8
Manager’s Ethics: Getting, Promoting, and Firing
Workers
Chapter Overview
Chapter 8 “Manager’s Ethics: Getting, Promoting, and Firing Workers” examines some ethical decisions
facing managers. It considers the values that underlie and guide the hiring, promoting, and firing of
workers.
Saylor URL: http://www.saylor.org/books Saylor.org
328
8.1 Hiring
L E A R N I N G O B J E C T I V E S
1. Locate ethical tensions affecting the breadth of a hiring search.
2. Define applicant screening and mark its ethical boundaries.
3. Define applicant testing and consider what makes an appropriate test.
4. Draw the lines of an ethical interview process.
Help Wanted, but from Whom?
The Central Intelligence Agency’s hiring practices are widely known and well depicted in the movie The
Recruit. After discretely scouting the special capabilities of a young bartender played by Colin Ferrell, Al
Pacino catches him at work, orders a drink, carries on a one-sided and cryptic conversation, performs a
magic trick with a ripped newspaper, announces that “things are never quite as they appear,” and finally
admits that he’s actually a job recruiter.
Ferrell seems annoyed by the man’s presence.
Pacino returns to the newspaper, pulls out a page covered by an ad announcing “Two Day Specials.” He
circles the letters c, i, and a in “Specials” and walks out. Colin Ferrell follows.
[1]
Actually, that’s not true. The CIA doesn’t hire that way. They advertise on CareerBuilder just like any
other company. You can understand, though, why they wouldn’t mind scouting out their applicants even
before allowing people to apply; they don’t want to end up hiring double agents.
Something like that happened soon after Procter & Gamble grew jealous of a competitor’s hair-care
products. Salon Selective, Finesse, and Thermasilk were all doing so well for Unilever that P&G contracted
people to get hired over at Unilever and bring back secrets of their success. The corporate espionage—
which P&G executives characterized as a “rogue operation”—led to a multimillion-dollar settlement
between the companies and left behind the lesson that when you’re the boss and you’re hiring, you’ve got
to make sure that the people you bring in will be loyal to the company.
[2]
The problem is you’ve also got to make sure that they’re going to do good work, the best work possible.
Between the two requirements there’s a tension stretching through every decision to hire a new worker.
On one side, you want to limit the people you even consider to those few who, for one reason or another,
Saylor URL: http://www.saylor.org/books Saylor.org
329
you know won’t be a total disaster. On the other side, no company can survive playing it safe all the time;
generally, the corporations able to hire the best talent will win over the long run.
And
one way to get the
best talent is to cast as large a net as possible, let a maximum number know that a position is available,
and work through the applications carefully no matter how many pour in.
Conclusion. Hiring employees can be safe or risky depending on how broadly you announce a job opening.
Three Strategies for Announcing a Job Opening: Nepotism, Internal Public
Announcement, Mass Public Announcement
Start on the safe side of hiring. Nepotism is granting favored status to family members. In the case of
hiring, it means circulating information about open jobs only to your relatives. Naturally this happens at
many small businesses. A sales representative at a small firm importing auto accessories meets a woman
at work. She’s also a rep. Marriage follows. A year later he decides to quit his job and strike out on his own
with a new website project that reviews and sells the same kind of car products. Things go well, page hits
climb, sales increase, and soon he needs help so he hires…his wife. They’ve worked together before, and
they both know the field. Most important, the risk is minimal. Since he’s waking up with her in the
morning he can figure she’s not going to skip out on work just because it’s a nice spring day. And is she
going to steal office supplies? A little money from the payroll? An important client? Probably not. This is a
case where nepotism makes sense.
But what about the other way? What if the husband’s solo venture flops, and at the same time, his wife’s
career flourishes. Now he needs a job, and she’s got the power to hire. A job opens up. Probably, she’s got
junior staff ready for the post, but can she push them aside and bring her husband in?
There is some justification: she’s worked with him before, and she knows he performs well. Plus, as a boss
of his own (failed) business, he’s obviously got leadership experience and he has demonstrated initiative.
All that counts for something. But if she goes with him she’s going to breed resentment in her group. You
can hear it:
“Hey, what do you need to get a promotion around here?”
“A last name.”
And
Saylor URL: http://www.saylor.org/books Saylor.org
330
Now you might be asking why nepotism bugs me so much. It’s the presumption. It’s the attitude.
It’s just one more example of how life isn’t fair. Am I jealous? I don’t know. I guess I take
advantage of the company in other ways…LOL. What can I learn from this? That life is good if
you’re born into the right family? That I need to control my attitude and stop letting petty crap
drive me to drink?
[3]
That last paragraph comes from a blog entry titled “Nepotism Sucks.” It does for his company too: few
firms can be successful with employees musing about how they “take advantage of the company” while
they’re punctuating comments about their work with LOL. As for the central issue, he’s right. Basic
fairness isn’t being honored: people are getting considered for a job because of who they’re related to, and
it’s not this blogger’s fault that his last name is wrong.
On the other hand, “Is Nepotism So Bad?” titles an article on Forbes.com that compiles a list of large
companies—including Forbes—where nepotism has been the norm…and successful. According to the
article, experts estimate that executive-level nepotism works out about 40 percent of the time. What are
the advantages to bringing in your own? Familiarity with the business and trust are noted. Another
advantage is also underlined: frequently, relatives don’t want to let their own relatives down. Sons work
harder for fathers, cousins for cousins, brothers for sisters. There’s a productivity advantage in nepotism.
Arguably, that factor weighs more heavily than the bitterness arising when deserving workers already
employed don’t get a chance to apply for a job because it already went to the boss’s sister-in-law.
[4]
Finally, at least theoretically, there’s a creative solution to the bitterness caused by nepotism: make
virtually every post a nepotism-first position. Oil-Dri, a producer of absorbent materials, celebrated its
fiftieth anniversary with a party for all employees. “Would everyone,” the group was asked at one point,
“who is related to someone else in the company please stand up?” Of the seven hundred employees, about
five hundred left their seats.
Internal public job announcements occupy a middle spot on the continuum between playing it safe (only
letting selected people you’re certain will be loyal and at least moderately capable know when a job is
available) and going for the best talent (broadcasting the post as broadly as possible and accepting
applications from anyone).
An example of an internal public job announcement comes from the National Review, a political
magazine and website run by the kind of people who wear suits and ties to baseball games. Their blog is
Saylor URL: http://www.saylor.org/books Saylor.org
331
called The Corner, and the magazine’s editors fill it with thoughts and arguments about the day’s political
debates in Washington, DC. There’s also a bit of insider humor, provocation, and satire tossed back and
forth between posters. If you keep reading for a few weeks, you’ll start to sense an intellectual soap opera
developing along with the libertarian-conservative politics; there’s an undercurrent of shifting alliances,
snarkiness, and thoughtful jabs.
You’ll also notice that National Review places job announcements on The Corner blog. There aren’t a lot
of openings, but every couple of weeks a little announcement appears between posts.
The National Review Online is seeking an editor with web capabilities. Send applications to
____@nationalreview.com.
It’s pretty ingenious. The only people who are going to be reading The Corner are
sincerely interested in the wonkish subjects these guys publish about;
not out there just looking for any job (at the time they see the announcement, they’re not looking for a job
at all because it’s not a job site);
compatible on a personal level with the National Review crew. The posters let personalities shine
through, and if you don’t have chemistry with their style of humor and talk, you’re simply not going to be
reading them.
What an internal public job announcement seeks to do is get the most applications in the hopper as
possible, and so the announcement is published on a free Internet page that anyone can see. That’s the
public part. But because the page is only commonly followed by people who are already inside the world
of public policy defining the employees at National Review, the bosses don’t need to worry about the
wrong kind of people sending in résumés. That’s the “internal” part. Recruiters can get a lot of
applicants—increasing their chances of finding really talented people—without worrying too much about a
bunch of lefties who really prefer websites like Daily Kos trying to fake their way into the organization.
Mass public job announcements are just what they sound like. You need someone and you post the
position at Monster, CareerBuilder, and The Ladders. Here you’re giving up confidence that applicants
will fit into the organization naturally, and you’re even risking corporate spying moles like those that
infested Unilever. In exchange, however, you’re getting the broadest selection possible of people to toss
their hat into the ring, which maximizes your chances of finding stellar work performance.
Saylor URL: http://www.saylor.org/books Saylor.org
332
Beyond the advantage of many applicants, there are good ethical arguments for mass public job
announcements. The simplest is fair play: everyone should get an equal opportunity to take a run at any
job. Just past that, there are concerns about discrimination that are eased by mass announcements. While
there’s no reason to launch charges of inherent racism at nepotistic hiring practices, it might well be true
that if a small business is initiated by an Asian family, and they start hiring relatives, the result at the end
of the day is a racial imbalance in the company. Again, no one is equating nepotism with racism, but the
appearance can develop fairly easily whenever job announcements are not publicized as widely as
possible. The parallel case can be made with respect to internal public job announcements. If 90 percent
of the people who come in contact with the “help wanted” message happen to be women, sooner or later,
there’s going to be some guy out there who complains. So, one argument in favor of mass announcements
is the stand it helps take against illegal and unethical discrimination.
Another argument for mass announcements is reciprocity. If a company is trying to sell a product to the
general public, to anyone who’s willing to pay money for it, then shouldn’t they allow everyone a shot at
becoming an employee? It doesn’t seem quite right to profit from anyone—to try to sell, say, a car to
anyone who walks in the door—and then turn around and not give all those consumers a decent chance at
earning a living there at the dealership.
Conclusion. Announcing a job opening is not automatic. You can announce the spot more publicly or less
so. There are advantages and disadvantages to the various approaches, but there’s always an ethical
responsibility to clearly account for the reasons why one approach is selected over another.
Ethical Perils of Job Announcements
Ethical perils of job announcements include
1. describing a position in ways that don’t correspond with the reality,
2. announcing a post to people who really have no chance for the job.
Once you’ve identified the demographic pool you’d like to recruit from, it’s easy to oversell the job in the
announcement you post. The most blatant cases—You can earn $300 per hour working from home!—are
obvious frauds, but even sincere attempts can cause misunderstandings. Say a job requires “occasional
travel.” Fine, but does that mean occasionally during the year or occasionally during the month?
Saylor URL: http://www.saylor.org/books Saylor.org
333
The much more severe case of insincerity in job announcements is posting one before an audience that
has no reasonable chance of getting the job. When Hooters posts a “server wanted” sign, we all know what
they’re looking for just like when the rough bar next door advertises for a bouncer. But what if it’s a formal
restaurant advertising for a waiter? If the place is across town, you can’t just drop in to check out the kind
of people they hire. So maybe you go through the application process and make the telephone calls and
finally go in for the interview. As you walk through the door, the first thing they check out is your weight
profile. Then your jaw line, haircut, eyes, and the rest. They want to see how you compare with the other
waiters who all look like they model on the side.
If you’re lucky, you see yourself fitting right in, but if you’re like most of us, you know the interview’s over
before it started; the whole thing has been a huge waste of time.
Now put yourself on the other side. As the restaurant manager trying to fill the position, you know
you should put the requirement that applicants be devastatingly handsome into the ad. The duty to be
honest requires it. The duty to treat others as an end and not a means requires it. The idea that our acts
should be guided by the imperative to bring the greatest good to the greatest number requires it. Almost
every mainstream ethical theory recommends that you tell the truth about what you’re looking for when
you announce a job. That way you don’t waste peoples’ time, and you spare them the humiliation of being
treated as irrelevant. So you should want to put in the ad something about how only potential movie stars
need apply.
But the law virtually requires that you don’t put the line in. If you explicitly say you’ll only consider
exceptionally attractive men for your job, you open yourself to a slew of lawsuits for unfair and
discriminatory hiring practices. In fact, even Hooters aren’t safe. In 2009 the chain was sued by a Texas
man named Nikolai Grushevski because they refused to hire servers who looked, well, like him. When it
gets to that point—when hairy guys can get away with calling lawyers because they aren’t hired to serve
food in short shorts and halter tops—you can understand why restaurants don’t want to publicly admit
exactly what they’re looking for.
[5]
Bottom line: if Hooters just comes out and states what it is that makes their kind of employee, they can get
sued. So they’re much better off just making the announcement ambiguous. That way, when it turns out
that no hairy guys ever seem to get hired, they can always say it’s because they didn’t seem so adept at
Saylor URL: http://www.saylor.org/books Saylor.org
334
dodging tables while shooting around with trays of beers and sandwiches. Or whatever. One lie is as good
as another so long as it keeps the restaurant out of the courtroom.
For managers, this is a tight spot. They’re caught between what’s right and the law. In ethical terms,
they’re stretched between two conflicting duties: to tell the truth and to get the famous Hooters Girls into
the restaurant.
Screening
Reducing a large pool of applicants to a manageable selection of people for serious consideration
is applicant screening, sometimes referred to as filtering. Screening begins with the job announcement.
Requirements like “three or more years of experience” and “willingness to work the night shift” go a long
way toward eliminating applicants.
It’s impossible, though, to completely define the perfect applicant beforehand, and even if you could,
there’s almost always going to be someone like Nikolai Grushevski who shows up. So screening continues
as the preliminary review of applications and applicants to see who can be quickly crossed off the list
without any serious consideration.
Legally, who can be crossed out? The default response is no one. In its broadest form, civil rights
employment law guarantees equal opportunity. All applicants deserve to be considered and
evaluated solely on their ability to do the job, and the federal government’s Equal Employment
Opportunity Commission is stocked with lawyers who are out there doing their best to make sure the rules
are upheld. For managers, that means they’ve got to take all applicants seriously; they’ve got to pursue
interview questions about ability, training, experience, and similar. Now, this is where a guy like
Grushevski can come in the door and say, “Look, I can deliver a round of burgers and beer as well as any
woman.” He’s probably right. Still, he’s not the right person for the job; there’s no reason for a manager to
lose valuable time dealing with him.
Similarly, a wheelchair-bound man shouldn’t be a beach lifeguard; an eighty-year-old shouldn’t be flying
commercial jetliners; the seven foot one and 330-pound Shaquille O’Neil isn’t going to be a horse jockey.
There is a legal way for companies to summarily screen out inappropriate applicants: by appealing
tobona fide occupational qualifications (BFOQs). BFOQs are exceptions granted to equal opportunity
requirements. A form of legalized discrimination, they let managers cross off job applicants for reasons
Saylor URL: http://www.saylor.org/books Saylor.org
335
that are normally considered unfair: gender, physical size, religious belief, and similar. (As a note, race
isn’t allowed to be considered a BFOQ.)
When do bosses get this easy way out? When they can show that the otherwise discriminatory practices
are required because of a business’ nature. So while it’s clear that Shaquille O’Neil’s intimidating size
doesn’t mean he’ll be a bad accountant, the nature and rules of horse racing require that riders be
diminutive, and that means Shaq would be a disaster. A horse owner can show that the job requires a
physically little person to be successful. Thus size becomes a BFOQ and a legitimate way of screening
applicants for that particular
job.
A maker of men’s clothes can reasonably screen out women from the applicant pool for models—but they
can’t eliminate female applicants from consideration for a sales position. Or they could, but only if they
could show that maintaining a masculine public image was integral to the success of the company. For
example, you could imagine a company called Manly Incorporated, which sold products based on the
premise that every employee was a quality control officer.
Along similar lines, a Catholic school may screen atheists from the search for a teacher, but it’s harder to
justify that filter for janitors. At the airport security line women can be assigned to pat down women and
men to men, but either may apply for the job to hand check the carry-on bags.
Another common screen is education. Imagine you have just opened a local franchise of Jan-Pro, which
offers commercial cleaning services to car dealerships, gyms, banks, churches, and schools.
[6]
What level
of education will you be looking for in potential employees? Since the job involves mixing chemicals, it
seems like requiring some basic education is a fair demand, but is a college degree necessary for the work?
You may have one as a manager, but that doesn’t mean you should necessarily demand that much from
employees. And on the other side, is it fair to screen out someone who’s got too much education, say a
master’s degree in chemistry? It does seems reasonable to suspect that this kind of person will soon
become bored pushing a vacuum over carpets.
Then again, do you know that will happen? Is it fair to screen based on what you suspect might occur?
Another type of screening catches high-risk lifestyles. Smoking is one of the most often cited, and the
Humana company in Ohio is one of a growing number that’s directly banning smoking—on or off work—
by new employees.
[7]
Saylor URL: http://www.saylor.org/books Saylor.org
336
These healthy lifestyle policies set off firestorms of ethical debates. With respect to smoking and in broad
strokes, the company has an interest in prohibiting smoking because that should mean healthier workers,
fewer sick days, lower health insurance premiums, and higher productivity. In short: better working
workers. On the other side, job applicants (at least the smokers) don’t believe that they’re less productive
than everyone else, and anyway, they resent being excluded for a recreational habit pursued on their own
time. In long discussion boards—there are hundreds online—the debate plays out. Here’s one exchange
from a typical board:
bonos_rama:
I wouldn’t hire anyone that has a habit of leaving their desk every hour to stand outside for
10 minutes. Doesn’t matter if it’s to smoke, drink coke, or pass gas that they’re leaving, it’s
bad for productivity.
Mother of a
Dr.:
But it’s OK to stand by the coffee pot and discuss sports and politics? Productivity actually
improves when you get away from the computer every hour.
matt12341:
Even discounting the productivity argument, smokers tend to have more long-term health
problems, leading to higher insurance premiums so companies end up paying more.
jamiewb:
What if we apply this logic to people who are overweight? What about people who have a
family history of cancer? Or a higher incidence of diabetes? As long as it doesn’t impact job
performance, I don’t think it’s fair to refuse to hire smokers.
happily-
retired:
I think it is a great idea to not hire smokers. Up next should be obesity, as it leads to diabetes,
heart problems, joint problems, etc. Companies following that path would be demonstrating
good corporate citizenship by fostering a healthier America.
Zom Zom:
Yes, the good citizenship of fascism. Now my employer has the right to dictate what I do with
my body? “Land of the free,” unless your boss doesn’t like the choices you make.
[8]
You can see that underneath the back-and-forth, this is ultimately a debate about ethical perspectives.
One side tends toward a utilitarian position: the greater good in terms of health and related issues justifies
the filtering of smokers in hiring decisions. The other side tends toward a fundamental rights position:
what I do with my time and body is my decision only. Both sides have strong arguments.
Saylor URL: http://www.saylor.org/books Saylor.org
337
Criminal record screening is another common filter for job applicants. Most states won’t allow employers
to deny someone fair consideration for a job only because of a prior criminal conviction. There’s wiggle
room, though. In New York, Article 23-A of the correction law certifies that employment may be denied if
there’s a direct relationship between the criminal offense committed and the employment sought,
the applicant would pose an unreasonable risk to property or the safety or welfare of others.
Those are big loopholes. The first one means the Brinks armored car company can legally refuse to
consider ex-bank robbers for a position. It may also apply to the shoplifter who wants to be a cashier or
the drug dealer who wants a job in the pharmacy.
The second exception is still broader and applied in Grafter v. New York City Civil Service
Commission.
[9]
In that case, the Fire Department of New York refused to hire Grafter because he’d been
caught drunk driving on his last job. A potentially drunken fireman does seem like a risk to the welfare of
others. Pushing that further out, the same would probably go if he applied to be a taxi driver. In fact, the
list of jobs that may seem dangerous for others if the worker is drunk extends a long way, probably
everything in construction, transportation, or anything with heavy equipment. So the law does allow
employers to resist hiring convicts across a significant range of wrongdoing.
Finally, the basic ethical tension pulls in three competing directions for any manager facing a criminal
hiring decision:
1. The ethical responsibility to recovering criminals. Rehabilitation (via honest work) is good for ex-
convicts.
2. The manager’s responsibility to the company. Managers need to avoid problems whenever
possible and keep the machine running smoothly so profits flow smoothly too.
3. The company’s responsibility to the general public. If a taxi syndicate is hiring ex-drunk drivers,
you’ve got to figure something’s going to go wrong sooner or later, and when it does, the person who put
the driver behind the wheel will be partially responsible.
Social media is another potential filter. Fifty-six percent of millennial believe that the words and pictures
they put on Facebook and Twitter shouldn’t be allowed to factor into hiring decisions.
[10]
Recruitment
officers, they’re saying, shouldn’t be going through online photo albums to check out the kinds of things
you and your buddies do on Friday nights.
Saylor URL: http://www.saylor.org/books Saylor.org
338
From the employers’ side, however, the argument in favor of checking the pages is simple. If an applicant
is sufficiently incautious to leave pictures of massive beer funnel inhalations available for just anyone to
see—and if they do that while they’re trying to put their best face forward as job seekers—then God knows
what kind of stuff will be circulating once they’ve got a job. As a manager, it’s part of your job to protect
the company’s public image, which means you’ve got to account for clients and others maybe running the
same Google and Facebook searches that you are.
It’s an easy scenario to imagine: you hire someone with a flamboyant online life. Soon after, a client
working with her gets nosey does a Google image search, and what comes in at the top of the list is a
picture of your new employee slamming beers, chain-smoking cigarettes, or maybe inhaling something
that’s not legal. This isn’t good and the person who looks really bad is the supposedly mature manager
who allowed the whole thing to happen by hiring her.
Of course there’s always the standard but still powerful argument that what employees do after hours is
their own business, but one of the realities inherent in the Internet is that there is no such thing as “after
hours” anymore. Once something goes online, it’s there all the time, forever. Managers need to take
account of that reality, which might mean rethinking old rules about privacy.
Testing
Once an ad has been placed, and applicants have been pooled, and the pool has been screened, the real
hard work of hiring begins: choosing from among apparently qualified people. One tool used in the
selection process is applicant testing. There are various sorts of tests, but no matter the kind, for it to be
legitimate; it should itself pass three tests. It ought to be
Valid. The test must measure abilities connected to the specific job being filled. A prospective roadie for
Metallica shouldn’t be asked to demonstrate mastery of Microsoft Excel, just as there’s no reason to ask an
accountant to wire up his cubicle with speakers blasting 115 decibels.
Normalized. The test must be fair in the sense that results are adjusted for the circumstances of the
testing session. If you’re checking to see how frequently applicants for the post of TV weatherman have
predicted sunshine and it turned out to rain, and one woman gets tested in Phoenix while another takes
Seattle, it’s pretty easy to see who’s going to win in terms of raw numbers. Those numbers need to be
adjusted for the divergent levels of difficulty.
Saylor URL: http://www.saylor.org/books Saylor.org
339
Constant. The results any test taker achieves over time should be similar. Just like a broken clock is right
twice a day, an applicant for an interior design job who happens to be color-blind might once in a while
throw together a carpet-sofa combination that doesn’t clash. A good test eliminates the lucky hits, and
also the unlucky ones.
Of the many kinds of hiring tests now in use, the most direct try to measure the exact skills of the
job. Skill tests can be simple. They’re also relatively easy to control for validity, normalization, and
constancy. For example, applicants for a junior-level position in copyediting at a public relations firm may
be given a poorly written paragraph about a fictional executive and asked to fix up the spelling and
grammar.
Psychological and personality tests are murkier; it’s more difficult to show a direct link between the
results and job performance. On one side, you’ve got a test that probes your inspirations and fears, your
tastes and personal demons. On the other side, the test’s goal is to reveal how well you can handle plain
work assignments. Here’s an example of the disconnect. The following is a true-or-false question that
Rent-A-Center placed on one of its employee application tests: I have no difficulty starting or holding my
bowel movement.
[11]
Well, it’s hard to see the link between bathroom performance and the ability to rent washer and drier sets.
Rent-A-Center wouldn’t be asking, though, if they didn’t think the link was there. And they could be right;
there may be some connection. One of the firmest sources of belief in the link between personality profile
and job performance is the very interesting Minnesota Multiphasic Personality Inventory (MMPI). That
specific test is the origin of the bathroom question. Other true-or-false choices on the long test include the
following:
I am very attracted to members of my own sex.
Evil spirits possess me sometimes.
Now, the MMPI is a real test with a long and noble history. One of the things it tries to do is
establish correspondences. That is, if we take a group of successful executives at Rent-A-Center and we
discover that they nearly universally have trouble in the bathroom, then it may make sense to look for
people who suffer this discomfort when looking to recruit future company leaders. As for the why
question—as in why is there a link between bathroom habits and success?—that doesn’t matter for a
Saylor URL: http://www.saylor.org/books Saylor.org
340
correspondence test; all that matters is that some link is there. And if it is, then you know where to look
when you’re hiring.
Theoretically, correspondence testing makes sense. Still, it’s hard to know how applicants are going to
react to questions about sexual attraction and evil spirits. Obviously, some are going to find the whole
thing too weird and not turn in responses that actually match their profile. As for applicants and
employees of Rent-A-Center, they filed a lawsuit.
[12]
Inescapably, correspondence-type personality tests are vulnerable to lawsuits because they’re explicitly
based on the premise that no one knows why the results indicate who is more and less suitable for a post.
The administrators only know—or at least they think they know—that the correspondence is there. It’s not
obvious, however, like it is with a simple skill test, so it makes sense to imagine that some are going to
doubt that the test is valid; they’re going to doubt that it really shows who’s more and less qualified for a
job.
So the problems with psychological tests include validity failure and lawsuits. Problems with constancy
and normalization could also be developed. Added to that, there are invasion of privacy questions that are
going to get raised whenever you start asking perspective employees about their bathroom habits and
bedroom wishes.
On the other hand, it needs to keep being emphasized that the tests do happen, and that’s not a
coincidence. At the Universal Studios Hollywood theme park, recruiter Nathan Giles reports that the tests
he administers—with true-or-false questions including “It’s maddening when the court lets guilty
criminals go free”—actually do produce valuable results. They correlate highly, he says, with personal
interviews: if you do well on the test, you’re going to do well face to face. And though the application and
interpretation of these tests are expensive, in the long run they’re cheaper than interviewing everyone.
Finally, if that’s true, then don’t managers have a responsibility to use the tests no matter how heated the
protests?
[13]
Lie detectors in the Hollywood sense of wires hooked up to the fingers for yes-or-no interrogations are
illegal except in highly sensitive and limited cases, usually having to do with money (bank guards) and
drugs (pharmaceutical distribution). Written honesty tests are legal. Generally, the questions populating
these exams resemble those found on psychological tests, and deciphering the results again works through
Saylor URL: http://www.saylor.org/books Saylor.org
341
correlation. Obviously, the test can’t work directly since both honest and dishonest people will answer
“yes” to the question “are you honest?” Here are some typical questions that do get asked:
I could help friends steal from my company.
I’m not an honest person and might steal.
I return quarters I find on the street to the police station.
Medical tests are generally only considered appropriate when the specific job is labor intensive. As always,
there’s a difference between testing and prying, and it’s your responsibility as a manager to limit the
questioning to specifically work-related information. Questions about past physical problems are
generally considered off limits as are future problems that may be indicated by family health history. A
simple example of an appropriate medical test would be a vision examination for a truck driver.
When Michael Phelps—the thick-grinned Olympic swimming hero—got photographed pulling on a bong,
he immediately failed the drug test with one of his employers: Kellogg’s breakfast cereal. He wouldn’t be
hired again, the company explained, because smoking pot “is not consistent” with the company’s image.
The National Organization for Reform of Marijuana Laws rushed to disagree, insisting that the problem’s
not that the drugs are bad; it’s the law that’s outdated and wrongheaded. They were supported, NORML
claims, by the Washington Post and Wall Street Journal.
[14]
However that might be, it’s seems difficult to object to Kellogg’s argument. The reason they’d hire Michael
Phelps in the first place is to brand their product with the image of beaming, young health, not zoning out
in front of the TV eating Doritos. Whether it’s legal or not, pot smoking is going to clash with the job
description.
But what if he hadn’t been caught by someone with a camera? Would Kellogg’s have the right to demand a
drug test before signing Phelps up as a representative? It depends where you are. Because there’s no
broad federal law on the subject, the rules change depending on your state, even your city. If you’re
looking for a job and you share a pastime with Michael Phelps, you may be in trouble in Alaska where any
employer can test any applicant at any moment. In Arizona, on the other hand, you have to get written
warning beforehand, which might allow for some cleanup. And if you’re applying for a government job in
Berkeley, California, you can party on because a local ordinance prohibits testing.
[15]
Looking at the Berkeley law allows a sense of the central ethical conflict. On one side, the employers’, the
obvious and strong argument is that drug use negatively affects work performance, so evaluating job
Saylor URL: http://www.saylor.org/books Saylor.org
342
prospects in terms of their future productivity implies, it almost requires, making sure they’re not
distracted or disoriented by drug habits. In contrast, the Berkeley ordinance persuasively states that
mandatory drug testing fails two distinct tests:
1. It assumes guilt instead of innocence.
2. It invades the individual’s privacy.
Deciding about drug tests seems to come down to deciding whose legitimate rights deserve higher billing:
the employer’s or the employee’s.
In 1971 the US Supreme Court banned intelligence quotient (IQ) testing except in very limited
circumstances after finding that the tests disparately affected racial minorities. Further, serious IQ tests
(as opposed to seven-question Internet quizzes) are extremely expensive to apply, so even if it were legal,
few employers would use the test with any frequency.
Conclusion. Tests applied by employers to job applicants include those probing skills, psychological
profile, honesty, medical condition, and drug use.
Interviewing
In 1998 the Indianapolis Colts had a very good problem. Holders of the top pick in the National Football
League draft, they had to choose between two exceptional players: two that everyone agreed radiated
Super Bowl talent. Both were quarterbacks. Peyton Manning had a better sense of the field and smoother
control of the ball; Ryan Leaf had a larger frame and more arm strength. Which would make the better
employee? The call was so close that the team with the second choice, the San Diego Chargers, didn’t care
much who the Colts selected; they’d be happy with either one.
The Colts didn’t have the luxury of letting the choice be made for them, and as draft day approached they
studied film of the players’ college games, poured over statistics, measured their size, speed, and how
sharply and accurately they threw the ball. Everything. But they couldn’t make a decision.
So they decided to interview both candidates. The key question came from Colts coach Jim Mora. He
asked the young men, “What’s the first thing you’ll do if drafted by the Colts?” Leaf said he’d cash his
signing bonus and hit Vegas with a bunch of buddies. Manning responded that he’d meet with the rest of
the Colts’ offense and start going over the playbook. Mora saw in Manning a mature football player ready
for the challenges of the sport at its highest level. In Leaf he saw an unpredictable kid.
Saylor URL: http://www.saylor.org/books Saylor.org
343
More than a decade later, Peyton Manning heads into another season as starting quarterback. Having won
the Super Bowl, set countless team and NFL passing records, and assured himself a spot in the NFL Hall
of Fame, you can understand that the Colts are happy with their selection.
Ryan Leaf has recently been indicted on burglary and drug charges in Texas. He got the news while in
Canada at a rehab clinic. As for football, after a rocky first few seasons, his performance collapsed entirely.
He hasn’t been on a field in years.
Interviews matter. Grades, recommendation letters, past successes, and failures on the job—all those
numbers and facts carry weight. But for most hiring decisions, nothing replaces the sense you get of a
candidate face to face; it’s the most human part of the process.
Because it’s so human, it’s also one of the most ethically treacherous. Two factors usually weigh heavily in
deciding which questions should and shouldn’t be asked:
1. Fairness
2. Pertinence
Fair questioning means asking similar questions to all applicants for a post. If the position is entry level,
many candidates will be young, inexperienced, and probably easily flustered. That’s normal. So too there’s
nothing necessarily wrong with trying to knock applicants off rhythm with a surprise or trick question.
The problem comes when one candidate gets pressed while another gets softballs.
What do tough questions look like? One answer comes from Google. There are always blog entries
circulating the Internet from applicants talking about the latest weird questions asked by that successful
and unpredictable company:
How many golf balls can fit in a school bus?
You are shrunk to the height of a nickel and your mass is proportionally reduced so as to maintain your
original density. You are then thrown into an empty glass blender. The blades will start moving in 60
seconds. What do you do?
How much should you charge to wash all the windows in Seattle?
Every man in a village of 100 married couples has cheated on his wife. Every wife in the village instantly
knows when a man other than her husband has cheated, but does not know when her own husband has.
The village has a law that does not allow for adultery. Any wife who can prove that her husband is
unfaithful must kill him that very day. The women of the village would never disobey this law. One day,
Saylor URL: http://www.saylor.org/books Saylor.org
344
the queen of the village visits and announces that at least one husband has been unfaithful. What
happens?
Explain a database in three sentences to your eight-year-old nephew.
[16]
We’re a long way from “why do you want to work at Google?” and even further from “what was your
biggest accomplishment or failure in your last job?” Those are softballs; anyone going into Google for an
interview is going to have prepared answers to those. It’s like reading from a script. But looking at the
hard questions Google actually poses, there is no script, and you can see how things could go south
quickly. You can’t figure out about golf balls and school buses, and you start to get nervous. Next, the
blender question seems odd and threatening, and it’s all downhill from there. Some interviews just don’t
go well and that’s it. As an applicant, you probably don’t have too much to complain about as long as the
next guy gets the same treatment. But if the next guy gets the softballs, the fairness test is getting failed.
As a manager, you can go hard or soft, but you can’t change up.
On the question of pertinent interview questions, the Google queries seem, on the face, to be troublesome.
Is there any job that requires employees to escape from a blender? No. But there are many jobs that
require employees to solve unfamiliar problems calmly, reasonably, and creatively. On that ground, the
Google questions seem perfectly justifiable as long as it’s assumed that the posts being filled require those
skills. By confronting prospective employees with unexpected problems demanding creative solutions,
they are, very possibly, rehearsing future job performance.
When the Colts were interviewing Peyton Manning and Ryan Leaf, something similar happened at the key
moment. At first glance, it seems like the question about the first thing each player would do after draft
day wouldn’t reveal much about all the other days to come. But the guys probably weren’t prepared for the
question, and so they had to reveal how they’d face a rapidly shifting reality that they had no experience in
dealing with, a reality just like the one they’d face the day after the draft when they’d go from being college
students on campus to wealthy adults in the big world. That makes the question pertinent. And that
explains why the answers that came back were telling. They distinguished a great hire from one of the
sports world’s monumental bungles.
On the other side, what kinds of questions reveal employees’ personalities’ but not their job skills?
Interview consultants typically warn managers to avoid asking about these subjects:
Saylor URL: http://www.saylor.org/books Saylor.org
345
Sex life
Opinions about homosexuality
Beliefs about contraception
Personal finances
Religious faith
Political affiliations
Except in special circumstances (a job is with a church, a political party, or similar), these kinds of
questions fall under the category of privacy invasion.
Finally, there are legal red lines to respect. While managers should ensure that applicants are old enough
to work and so can confirm that people are, say, eighteen or older, it’s discriminatory in the legal sense to
hire one person instead of another because of an age difference. This means asking “how old are you?” is
an off-limits question. It’s also illegal to ask about citizenship, though you can ask whether applicants are
legally authorized to work in the United States. It’s illegal to ask about disabilities, except as they relate
directly to the job. It’s illegal to ask about past drug and alcohol use, though you may ask applicants
whether they are now alcoholics or drug addicts.
The interviewer’s fundamental responsibility is to choose the best applicant for the job while giving
everyone a fair shot. Being fair isn’t difficult; all you need to do is just ask everyone the standard
questions: Why do you want to work for our company? What are your strengths? How do you work with
others? Do you stay cool under pressure? The problem here, though, is that it’s easy to get gamed. It’s too
easy for applicants to say, “I love your company, I’m a team player, and I never get mad.” Since everyone
knows the questions and answers, there’s a risk that everything will be fake. And that makes identifying
the best applicant nearly impossible.
One response to this is to junk the standard questions and come up with surprising and (seemingly) crazy
questions like they do at Google. Another strategy is a different kind of interview. A situational or
behavioral interview asks candidates to show how they work instead of talking about it.
Here’s how it goes. Instead of asking an applicant, “Do you stay cool under pressure?” (the correct
response is “yes”), the question gets sharpened this way:
You know how jobs are when you need to deal with the general public: you’re always going to get
the lady who had too much coffee, the guy who didn’t sleep last night and he comes in angry and
Saylor URL: http://www.saylor.org/books Saylor.org
346
ends up getting madder and madder…at you. Tell me about a time when something like this
actually happened to you. What happened? How did you deal with it?
It’s harder to fake this. Try it yourself, try inventing a story. Unless you’re a real good liar, you’re going to
hear the slipperiness in your own voice, the uncertainty and stammering that goes with making things up.
Probably, most people who get hit with situational questions are going to opt for the easiest route, which
is tell the truth and see how it goes. So the advantage to this kind of interview is that it helps sort out
qualified candidates by giving an unvarnished look at how they confront problems. On the other side,
however, there’s also a disadvantage here, one coming from the fairness side. If candidate A has spent
years at the counter of Hertz and candidates B through G have all been working in the Hertz back office, of
course the counter person is going to do better.
K E Y T A K E A W A Y S
In publicizing a job opening, a tension exists between limiting the job announcement to ensure that
applicants are appropriate, and widely publicizing the announcement to ensure that applicants include
highly qualified individuals.
Decisions about how broadly to publicize a job opening can be implemented through nepotism, internal
public job announcements, and mass public job announcements.
Screening job applicants makes the hiring process more efficient but raises ethical
concerns.
Common screening techniques involve BFOQs, educational requirements, high-risk lifestyles, criminal
record, and an applicant’s social media history.
Testing allows applicants’ suitability for a post to be measured but raises ethical concerns.
Common tests include skill tests, psychological and personality tests, honesty tests, medical tests, and
drug tests.
Applicant interviewing provides valuable information for evaluating job candidates, but questions ought to
be fair and pertinent to job-related concerns.
Saylor URL: http://www.saylor.org/books Saylor.org
347
R E V I E W
Q U E S T I O N S
1. Why might an employer opt for nepotism when hiring?
2. What is an advantage of a mass public job announcement?
3. Invent a job description that would allow applicants to be screened by a BFOQ.
4. Why might an applicant pool be screened for use of social media?
5. List the three requirements for a fair and legitimate job-applicant test.
6. How do psychological and personality tests work through correspondence?
7. Imagine a job and then an interview question for applicants that would not be pertinent and one that
would be pertinent.
8. Why might a behavioral interview be used?
[1] R. Donaldson (director), The Recruit (Burbank, CA: Touchstone Pictures, 2003), film.
[2] “Fortune: P&G Admits Spying on Hair Competitors,” Business Courier, August 30, 2001, accessed May 24,
2011,http://cincinnati.bizjournals.com/cincinnati/stories/2001/08/27/daily43.html.
[3] Marti’s Musings, “Nepotism Sucks,” August 30, 2004, accessed May 24,
2011,http://businessethicsworkshop.com/Chapter_8/Nepotism_sucks.html.
[4] Klaus Kneale, “Is Nepotism So Bad?,” Forbes, June 20, 2009, accessed May 24,
2011,http://www.forbes.com/2009/06/19/ceo-executive-hiring-ceonewtork-leadership-nepotism.html.
[5] “Texas Man Settles Discrimination Lawsuit Against Hooters for Not Hiring Male Waiters,” Fox News, April 21,
2009, accessed May 24, 2011,http://www.foxnews.com/story/0,2933,517334,00.html.
[6] “2011 Fastest-Growing Franchise,” Entrepreneur, accessed May 24,
2011,http://www.entrepreneur.com/franchises/fastestgrowing/index.html.
[7] Megan Wasmund, “Humana Enforces Mandatory Stop Smoking Program,” wcpo.com, June 16, 2009, accessed
June 7, 2011,http://www2.wcpo.com/dpp/news/local_news/Humana-Enforces-Mandatory-Stop-Smoking-
Program.
[8] “Humana: We Won’t Hire Smokers,” Newsvine.com, June 16,
2009,http://sorrelen.newsvine.com/_news/2009/06/16/2935298-humana-we-wont-hire-smokers.
[9] Grafter v. New York City Civil Service Commission, 1992.
Saylor URL: http://www.saylor.org/books Saylor.org
348
[10] Wei Du, “Job Candidates Getting Tripped Up By Facebook,” MSNBC.com, August 14, 2007, accessed May 24,
2011, http://www.msnbc.msn.com/id/20202935/page/2.
[11] Martin Carrigan, “Pre-Employment Testing—Prediction of Employee Success and Legal Issues,” Journal of
Business & Economics Research 5, no. 8 (August 2007): 35–44.
[12] Karraker v. Rent-A-Center, 2005.
[13] Ariana Eunjung Cha, “Employers Relying on Personality Tests to Screen Applicants, “Washington Post, March
27, 2005, accessed May 24, 2011,http://www.washingtonpost.com/wp-dyn/articles/A4010-2005Mar26.html.
[14] Paul Armentano, “The Kellogg Company Drops Michael Phelps, The Cannabis Community Drops
Kellogg’s,” NORML (blog), February 6, 2009, accessed May 24, 2011,http://blog.norml.org/2009/02/06/the-
kellogg-company-drops-michael-phelps-the-cannabis-community-drops-kelloggs.
[15] American Civil Liberties Union, “Testing Chart,” aclu.org, accessed May 24,
2011,http://www.aclu.org/FilesPDFs/testing_chart .
[16] Michael Kaplan, “Want a Job at Google? Try These Brainteasers First,”CNNMoney.com, August 30,
2007,http://money.cnn.com/2007/08/29/technology/brain_teasers.biz2/index.htm.
Saylor URL: http://www.saylor.org/books Saylor.org
349
8.2 Wages
L E A R N I N G O B J E C T I V E S
1. Explore the limits of wage confidentiality.
2. Delineate the uses and ethics of wages as a work incentive.
Two Salary Issues Facing Managers
Two salary issues facing managers are wage confidentiality and the use of wages as a work incentive.
Starting with wage confidentiality, in the private sector it’s frequently difficult to discover what an
organization’s workers are paid. Because of freedom of information laws, many salaries in government
operations and contracting are available for public viewing, but in the private sector, there are no laws
requiring disclosure except in very specific circumstances.
The main ethical reason for keeping wage information concealed is the right to privacy: agreements struck
between specific workers and their companies are personal matters and will likely stay that way. Still,
ethical arguments can be mounted in favor of general disclosure. One reason is to defend against
managerial abuse. In a law firm, two paralegals may have similar experience, responsibilities, and
abilities. But Jane is single and living in a downtown apartment while John has just purchased a home
where his wife is living and caring for their newborn. Any boss worth his salt is going to see that Jane’s got
no local commitments and, who knows, she may just up and decide to spend a few months traveling, and
then make a run at living in some different city. Maybe she likes skiing and a few years in Denver don’t
sound bad. John, on the other hand, is tied down; he can’t just walk away from his job. He can always get
a new one, of course, but if money’s tight and a recession is on, there’s an incentive to raise Jane’s salary
to keep her and not worry so much about John who probably won’t be going anywhere anyway. That
seems to be taking unfair advantage of John’s personal situation, and it also seems like paying someone
for something beyond the quality of the work they actually do. But if no one knows what anyone else is
making, the boss may well get away with it.
Stronger, the boss may actually have an obligation to try to get away with it given his responsibility to
help the company maximize its success.
Saylor URL: http://www.saylor.org/books Saylor.org
350
Another argument against confidentiality is the general stand in favor of transparency, and in this case,
it’s transparency as a way of guaranteeing that ethical standards of equality are being met. Since the
signing of the Equal Pay Act in 1963, the ideal of “equal pay for equal work” has become a central business
ethics imperative in the United States. But it’s hard to know whether the equality is really happening
when no one knows how much anyone else is making.
Of course, workers do frequently know how much other people are getting. In an extreme case, if you’re
laboring in a union shop, it’s probable that your wage scale will be set identically to those of your
companions. Even if you’re not unionized, though, people still talk at the water cooler. The result is, in
practice, that some wage transparency is achieved in most places. From there, arguments can be mounted
for the expansion of that transparency, but in most cases, the weight of privacy concerns will carry the
day.
Another wage issue concerns its use to provide a work incentive. Many sales positions have the incentive
explicitly built in as the employees receive a percentage of the revenue they generate. (That’s why
salespeople at some department stores stick so close after helping you choose a pair of pants; they want to
be sure they get credit for the sale at checkout.) In other jobs, generating a motivation to work well isn’t
tremendously important. The late-night checkout guy at 7-Eleven isn’t going to get you out of the store
with cigarettes and a liter of Coke any faster just because his salary has been hiked a dollar an hour.
Between the two extremes, however, there are significant questions.
Probably, the main issue involving the use of wages as a carrot in the workplace involves clarity. It’s quite
common, of course, for managers to promise an employee or a team of workers a pay hike if they win a
certain account or meet productivity goals. Inevitably, the moment of the promise is warm and fuzzy—
everyone’s looking forward to getting something they want, and no one wants to sour things by
overbearingly demanding specifics. The problems come afterward, though, if the terms of the agreement
have been misunderstood and it begins to look like there’s an attempt to worm out of a promised salary
increase. It is management’s responsibility as the proposers of the accord to be sure the terms are clearly
stated and grasped all around:
What, exactly, needs to be accomplished?
How much, exactly, is the wage hike?
Saylor URL: http://www.saylor.org/books Saylor.org
351
The mirror image of promised wage hikes to encourage improved worker performance is the bonus paid
at year’s end to employees marking a job well done. In a letter to the editor of the Greensboro News-
Record in North Carolina, a teacher cuts to the central ethical problem of the bonus: on the basis of what
do some employees receive one while others don’t? Some teachers, the writer states, “at schools with high
‘at-risk’ populations and students coming from homes where education is just not valued, work
themselves into a tizzy every year, but because of the clientele they serve, will never see that bonus money.
Inversely, schools with middle-class clienteles have teachers who work hard, but also others who merely
go through the motions but usually can count on that bonus because their students come from homes that
think education matters. Where is the justice in this?”
[1]
It’s not clear where the justice is, but there’s no doubt that bonuses aren’t serving their purpose. The
problem here isn’t a lack of clarity. No one disputes that the rules for assigning a bonus are clear. The
problem is that the rules don’t seem to account for divergent working conditions and challenges.
The important point, finally, is that even though a bonus is extra money outside the basic salary structure,
that doesn’t mean it escapes the question, “Where’s the justice in this?,” coming with every decision about
who gets how much.
K E Y T A K E A W A Y S
Wage confidentiality pits the right to privacy against the desire for, and benefits of, transparency.
Wages and bonuses are used to provide a work incentive, but problems arise when the pay increments
don’t obviously align well with promises or with job performance.
R E V I E W Q U E S T I O N S
1. Why might a company want to maintain wage confidentiality?
2. What is an example of a payment bonus becoming disconnected from work performance?
[1] Bill Toth, “Entire State ABC Bonus System Unfair,” News-Record.com, Letters to the Editor, August 19, 2008,
accessed May 24, 2011, http://blog.news-record.com/opinion/letters/archives/2008/08/.
Saylor URL: http://www.saylor.org/books Saylor.org
352
8.3 Promoting Employees
L E A R N I N G O B J E C T I V E S
1. Distinguish criteria for promoting employees.
2. Locate and define ethical issues relating to promotion.
The Drinking Strategy
If you want a promotion, does going out for drinks with the crew from work help the cause? Here’s a blog
post; it’s about two uncles—one who goes drinking with the crew and one who doesn’t—and you’ll see why
the answer might be yes:
Look at my uncles, they both work for Ford and one has been in his position for 10-plus years and
still doesn’t have a company car, while my other uncle has a company car, increase salary, paid
training. Even though he comes home to my auntie blinded drunk in the end it’s all worth it if you
want to be noticed.
[1]
Get hammered to get promoted! Too good to be true? Probably.
But not entirely, the Reason Foundation commissioned a report on the question of whether drinkers earn
more money than nondrinkers.
[2]
The title “No Booze? You May Lose” pretty much tells what the study
concluded about the link between social drinking with workmates and promotions. A few things should be
noted, though. Drinking doesn’t mean coming home blind drunk every night; it just means taking down
alcohol in some amount. And the payoff isn’t huge, but it is respectable: about 10 percent pay advantage
goes to the wet bunch compared to those workers who stay dry. The really interesting result, though, is
that guys who drink in bars at least once a month get another 7 percent pay advantage on top of the 10
percent. The bad news for drinking women is that for them, going to the bars doesn’t seem to help.
So there are two findings. First, just drinking is better than not drinking for your wallet. Second, at least
for men, drinking socially at bars is even better. One of the study’s authors, Edward Stringham, an
economics professor at San José State University, comments on the second result: “Social drinking builds
social capital. Social drinkers are networking, building relationships, and adding contacts to their
Blackberries that result in bigger paychecks.”
[3]
Saylor URL: http://www.saylor.org/books Saylor.org
353
Now, going back to the blog comment about the drunken uncle, isn’t this more or less what the blogger
sees too? Here are the next lines from the entry:
No senior management wants to promote a boring old fart. They want outgoing people, in and
outside of work. They want social people. If you can display your social abilities to them, it means
that you want more than the 9am to 5pm, thank God, time to go home. They want people who
enjoy working with the company and the people who they work for.
[4]
That sounds reasonable, and it may explain why there’s some serious scientific evidence that partying
with the workmates does, in fact, lead to promotions in the company.
The link between lifting a glass and moving up may be solid, but is it right? From the worker’s side,
there’s not a lot you can do about the situation so you may want to leave some Thursday and Friday
evenings available for happy hour regardless of whether you think that’s the way promotions ought to be
arranged. From management side, however, there is a stark issue here. When you sit down to look at two
candidates in your company for one promotion, do you have a right to consider how well they mix after
hours? Do you have a duty or responsibility to consider it?
There are two issues:
1. Should you consider a worker’s party aptitude?
2. If you do, how should you manage it?
The reasons for not considering party ability are many. Two stand out. First, workers are being paid for
what they do from nine to five. That’s the job. If you’re going to start considering other things, then why
stop at parties? You could give the promotion to the better player on the company softball team, or the
one who’s got curlier hair, or whatever. Second, workers may not have an equal opportunity to party. The
guy who lives closer to work and isn’t married obviously holds an advantage over the guy who has diabetes
when gin and tonics become job qualifications.
On the other hand, when workmates gather after work to drink, what do they talk about? Well, work.
That’s why people say a new advertising campaign or a fresh product idea got scratched onto a napkin. It’s
not a metaphor. Further, the ability to labor together with others—teamwork—that’s a real job
qualification, and it’s reasonable to suppose that people who get along well drinking will carry the
camaraderie over to the next morning’s breakfast meeting (where coffee and tea are served). This explains
Saylor URL: http://www.saylor.org/books Saylor.org
354
why companies including Deloitte Consulting encourage and even to some extent pressure employees to
socialize outside the office.
[5]
Finally, it’s a hard call—there are reasonable arguments to be made on both sides. It’s also difficult to be
absolutely certain how the party qualification should be managed if it’s included in the performance
evaluation. On one hand, a strong case can be made for transparency and openness, for simply stating
that after-hours socializing is, in fact, a part of the job. To not inform workers, the argument goes, that
hanging out is a job requirement is really a form of lying: it’s dishonest because the default understanding
typical employees are going to have is that what counts in determining the quality of work is the work,
period. Whether the assigned task got outlined in a cubicle or on a bar stool is irrelevant. Therefore, any
manager who secretly totes up the social aptitude of the workers is not being honest about the way
workers are graded. It’s the equivalent of a college teacher assigning grades partially based on class
participation without listing that in the syllabus.
On the other hand, all teachers know that listing class participation as part of a student’s grade can lead to
brown nosing, and there’s a similar threat in the workplace: if employees are told to party, then at least a
few are going to tag along for drinks even when they really don’t want to go and end up souring the
evening for everyone. If you as a manager believe in honesty above all, then you may accept that cost. On
the other hand, if your vision of corporate responsibility dovetails more closely with profit maximization,
you may be able to build an ethical case around the idea that in the name of evaluating employees as
perfectly as possible some elements of that evaluation may have to remain close to the vest.
Three Considerations for Promotion: Work Performance, Seniority, Projected
Work Performance
When managing a promotion, there are three fundamental considerations; work performance is the most
obvious. The person most deserving to step up to a higher level of responsibility is the one who’s best
managed current responsibilities. This may be measured by accounts won, contributions to a larger
group, or some other work-related factor, but the key is that the measured performance be related with
the job.
The problem comes in determining exactly what that word related means. When read narrowly, it means
that the employee who looks best on paper—the one who’s written the best reports, achieved the highest
Saylor URL: http://www.saylor.org/books Saylor.org
355
sales, won the most cases—will be the most deserving. When read broadly, however, the range of
considerations can expand dramatically to include contributions having to do with personality, chemistry,
and other characteristics tangential to nine-to-five tasks. This is where questions about going out for
drinks after work start to gain traction and importance. Finally, it’s not clear that after-hours socializing
should be considered part of work performance, but the fact that it can be included shows how broad this
category is.
The second consideration when weighing a promotion is seniority. Seniority is preference for promotion
granted to the person who’s been with the company the longest. A strong or pure seniority system simply
reduces the choice to comparisons of time with the firm: the promotion goes to the longest-serving
employee. There’s a taste of fairness here since no one will be overlooked for a job because of a personal
conflict with the boss, or because he doesn’t smile enough at work, or because her skirt is too short or his
necktie too absurd or whatever. More, there’s an inherent tranquility in the fact that all employees know
exactly where they stand. The connected problem, obviously, is that good work is not directly rewarded.
This explains why the seniority system seems especially suited to production line jobs or any kind of labor
where experience is more important than analytic skills, high-level training, or creativity. If it’s true that
experience is what matters on a job, then a seniority system should produce promotions that more or less
dovetail with expertise and the ability to do a good job.
A weak seniority system considers time with the company as a positive element, but only as one
component in evaluating candidates for a promotion. The advantage of this kind of system is the
encouraging of worker loyalty. The retention of good workers is nearly the highest human resources
priority of any company, and rewarding seniority plus performance gives good workers a reason to stick
around. Equally important, it helps retain good, loyal workers without forcing the company to promote
old-timers who’ve never really learned to get the job done well.
The third promotion consideration is projected performance, which evaluates candidates in terms of what
they’ll be able to do in the future. A tool used by companies to groom young people for future leadership
roles, the escalation normally goes to highly qualified individuals currently working at a level beneath
their ability. For example, a health insurance company may hire a college graduate with a strong premed
profile and hope to keep that person out of medical school by pulling her up the career ladder at a crisp
rate. She simply doesn’t have the experience, however (no one does), to just start near the top. In order
Saylor URL: http://www.saylor.org/books Saylor.org
356
for her to play a leadership role in the future, she does need to be familiar with how the company works at
every level, including the lowest. That means spending some time on the front lines, say, manning
telephones, answering questions from (frequently frustrated or angry) customers. Of course it’s difficult to
really stand out in this kind of work, so if she’s going to move up, it’s going to have to be because she’s
expected to stand out at something more demanding later on.
Other employees are going to be tempted to resent the rapid ascension since many of them have done just
as well at the same job for a longer time. Within the narrow view of performance evaluation (your job
performance equals how well you do the work) their resentment is justified. The rule of equal treatment is
being severely broken. But if you’re in management, you have a responsibility to the company (and to
shareholders if the company is public) to be successful. And you need to face the problem that highly
educated and qualified young people have options. Arguably, retaining them is a higher priority—not just
financially but also ethically—than keeping more replaceable talent content.
K E Y T A K E A W A Y S
Work performance is defined in diverse ways, and managers may have a right to consider after-hours
activities as part of that definition.
Three common criteria for awarding promotions are seniority, work performance, and projected
performance. Each contains specific ethical tensions.
R E V I E W Q U E S T I O N S
1. Why might someone’s social skills be considered a factor in receiving a promotion?
2. What are some advantages and disadvantages of seniority promotion?
3. Why might a promotion be based on projected performance?
Saylor URL: http://www.saylor.org/books Saylor.org
357
[1] Maya, “Alcohol: Income Booster?,” Monster (blog), September 20, 2006, accessed May 24,
2011, http://monster.typepad.com/monsterblog/2006/09/alcohol_ income_.html.
[2] Bethany L. Peters and Edward Stringham, “No Booze? You May Lose,” Reason Foundation, September 1, 2006,
accessed May 24, 2011,http://reason.org/news/show/127594.html.
[3] Bethany L. Peters and Edward Stringham, “No Booze? You May Lose,” Reason Foundation, September 1, 2006,
accessed May 24, 2011,http://reason.org/news/show/127594.html.
[4] Maya, “Alcohol: Income Booster?,” Monster (blog), September 20, 2006, accessed May 24,
2011, http://monster.typepad.com/monsterblog/2006/09/alcohol_ income_.html.
[5] Deloitte Consulting: WetFeet Insider Guide (San Francisco: WetFeet), accessed May 24,
2011, http://www.wellesley.edu/Activities/homepage/consultingclub/wetfeet%20-%20deloitte_consulting .
Saylor URL: http://www.saylor.org/books Saylor.org
358
8.4 Firing
L E A R N I N G O B J E C T I V E S
1. Define legal guidelines on firing employees.
2. Elaborate justifiable reasons for deciding to fire.
3. Set standards for the actual firing process.
4. Consider ways of limiting the need to terminate employees.
Optimal Level Firing
A study funded by the CATO Institute and titled “The Federal Government Should Increase Firing Rate”
concludes this way: “The rate of ‘involuntary separations’ is only about one-fourth as high in the federal
government as in the private sector. No doubt private-sector firing is below optimal as well since firms are
under threat of expensive wrongful discharge lawsuits.”
[1]
There is, in other words, an optimal level for firing, and in both the public and private sectors it’s not
being met. People aren’t being fired enough.
The strictly economic question here is, “What is the optimal firing level?” No matter the answer, there’s an
ethical implication for the workplace: firing workers is a positive skill. For managers to perform well—for
them to serve the interest of their enterprise by maximizing workplace performance—the skills of
discharging employees must be honed and applied just like those of hiring and promoting.
On the ethical front, these are the basic questions:
When can an employee be fired?
When should an employee be fired?
How should an employee be fired once the decision’s been made?
What steps can management take to support workers in a world where firing is inevitable?
When Can an Employee Be Fired?
In the world of for-profit companies, most work contracts offer at-will employment. Within this scheme, a
clause is written into the contract offering employment only as long as the employer desires. Stated more
Saylor URL: http://www.saylor.org/books Saylor.org
359
aggressively, managers may discharge an employee whenever they wish and for whatever reason. Here’s a
standard version of the contractual language:
This is an “At Will” employment agreement. Nothing in Employer’s policies, actions, or this
document shall be construed to alter the “At Will” nature of Employee’s status with Employer,
and Employee understands that Employer may terminate his/her employment at any time for
any reason or for no reason, provided it is not terminated in violation of state or federal law.
The legal parameters for firing seem clear.
Things blur, however, once reality hits. As the Cato study authors note, simply the fear of a possible
lawsuit does impinge to some extent on the freedom to fire, especially when the discharged worker fits
into a protected group. This means older workers, foreigners, or disabled workers may protest that no
matter what reasons are given for termination—assuming some are given—the real reason is their age,
nationality, or disability. Further, gender protection may be claimed by women fired from largely male
companies and vice versa.
Another round of blurring occurs on the state level where legislation sometimes adds specific employee
protections, and so curtails employers’ rights. In Minnesota, for example, firing may not be based on a
worker’s participation in union activities or the performance of jury duty.
These varied and frequently changing legal protections are the reason managers are typically instructed to
keep detailed records of employee performance. If those can be produced to show a pattern of
incompetence or simply inadequate results, they can justify a dismissal before a judge, if it ever comes to
that.
Even though legal complexities mean managers are well advised to be careful about firing workers, and
it’s prudent to be sure that there are directly work-related reasons for the dismissal, none of that changes
the fact that at-will hiring gives wide latitude to the company, and fired workers are typically left with few
good avenues of protest. One way to see how tilted the table is toward the employer and away from the
employee is to compare the American at-will firing system with the European model, where a reasonable
cause for termination must be demonstrated. In the United States, employers may more or less fire
anyone for any reason, and the burden of showing the termination was illegal or unfair falls entirely on
the worker. In Europe, by contrast, the legal burden falls largely on the employer. Instead of the worker
having to show the firing was wrong, now the company has to show the firing was right. This is a big deal.
Saylor URL: http://www.saylor.org/books Saylor.org
360
It’s like the difference between innocent until proven guilty and guilty until proven
innocent. Just because firing means the company holds the burden of proof: it must demonstrate that the
worker wasn’t holding up his or her end of the employment contract. That’s a lot harder to do than just
producing some work evaluations to buttress the claim that she wasn’t fired because she’s Jewish or he
wasn’t let go because he’s Asian. As opposed to the European reality, the conclusion is, employees in the
United States hired at will have little recourse against a company that wants them out.
Finally, it’s worth noting that elements of just cause law have been working their way into the American
legal system in recent years.
When Should an Employee Be Fired?
Because the legal footing is usually more or less solid for American managers, the real hard questions
about terminating employees aren’t legal ones about what can’t be done but ethical ones about what
should be done.
Sometimes firing is unavoidable. Economic slowdowns frequently bring furloughs and terminations.
When the company’s books turn red, and after the entire easy cost cutting has been done, people need to
be cut. Who? There are three broad philosophies:
1. Inverted seniority
2. Workload
3. Recovery preparation
Inverted Seniority occurs when the last worker hired is the first released. This works especially well for
assembly-line-type labor where one worker can replace another easily. As long as replacement is possible,
dismissing the most recently hired allows clear and impersonal rules to make downsizing orderly.
Workload firings focus the pain of job cuts on that part of the company suffering most directly from a
falloff in business. An office furniture supply company may find its line of hospital products unaffected by
an economic downturn (people keep getting sick even if they don’t have a job) so layoffs are taken from
other divisions. This may mean losing workers with higher seniority or better job performance, but it
minimizes cash-flow disruption.
Recovery preparation takes the long view on an economic slowdown: firings and layoffs are executed not
so much to compensate for the present downturn but to sharpen the company for success when the
Saylor URL: http://www.saylor.org/books Saylor.org
361
economy bounces back. Staying with the office furniture supply company, the owner may see better long-
term opportunities for profits in the nonhospital units, so the downsizing may occur across the board. The
idea is to keep those slow-moving units at least minimally prepared to meet new demand when it
eventually comes.
Sometimes economic slowdowns don’t reflect a problem with the larger economy, they’re the result
of fundamental changes in the market, frequently brought on by technological advance. For example, the
popularization of digital photography has shrunk the market for old fashioned film. Seeing this coming,
what can a company like Kodak do? They’re probably going to let workers from the old film side go to
create room for new hires in the digital division. This is potentially unfair to terminated workers because
they may be doing exemplary work. Still, it would be unfair—and financially disastrous—to the company
as a whole to not change with the times.
Rank and yank is a management philosophy promoted by former General Electric Company CEO Jack
Welch. Every year, he counsels, the entire workforce should be ranked and the bottom 10 percent
(“There’s no way to sugarcoat this,” he says) should be fired to make room for new employees who may be
able to perform at a higher level. Here, the responsibility to the company is being weighed far heavier than
the one to the employee because, theoretically at least, those in the bottom 10 percent may be doing fine
on the job—fulfilling their responsibilities adequately—it’s just that others out there who could be hired to
replace them may do it better. In the hope they will, workers who’ve done nothing wrong are sacrificed.
[2]
There are two main criticisms of this practice. First, it’s a betrayal of employees who are fulfilling their
contractual obligations (they’re just not over performing as well as others). Second, it’s counterproductive
because it lowers morale by drowning workers in the fear that even though they’re doing what’s being
asked, they may end up in that dreaded bottom 10 percent.
Employee misbehavior is the least controversial reason to fire a worker. Here, the ethics are relatively
clear. Employees aren’t being mistreated when they’re dismissed because it’s their own actions that lead
to their end. Standard definitions of misbehavior include
rudeness toward clients or customers,
drinking or drugs on the job,
theft of company property or using company property for personal business,
frequent and unexplained absences from work,
Saylor URL: http://www.saylor.org/books Saylor.org
362
entering false information on records,
gross insubordination,
fighting or other physical aggression,
harassment of others (sexual, sexual orientation, religious, racial, and similar).
How Should an Employee Be Fired Once the Decision’s Been Made?
At the Friday all-staff meeting the office manager stands up to announce, “The good news is the following
people have not been fired!” He reads a list of seventeen names. There are nineteen people at the meeting.
That’s from a (perhaps unemployed) comic’s stand-up routine. Unfortunately, people have written into
the CNNMoney.com with real stories that aren’t so far removed:
An employee received news of her firing in a curt letter delivered to her home by FedEx.
A man tells of being halted at the building door by security and being humiliatingly sent away.
People report that they arrived at their office to find the lock changed and their stuff thrown in a box
sitting on the floor.
[3]
All these are inhumane firings in the sense that no flesh and blood person took the trouble to present the
bad news.
It’s easy to understand why inhumane firings occur: not many people enjoy sitting down with someone
and telling them they’re out. So it’s tempting to yield to cowardice. Instead of facing the worker you’ve
fired, just drop a note, change the lock, and talk to security. On the ethical level, however, firing an
employee is no different from working with an employee: as a manager, you must balance your duties to
the company and the worker.
How can the manager’s duty to the organization be satisfied when terminating a worker? First, to the
extent possible, the fired person should leave with a positive impression of the organization. That means
treating the employee with respect. No mailed notices of termination, no embarrassing lockouts, just a
direct, eye-to-eye explanation are probably the most reliable rule of thumb.
Second, the terminated employee should not be allowed to disrupt the continued work of those who
remain. If deemed necessary, security personnel should be present to ensure the ex-worker leaves the
premises promptly. Also, if the worker is involved in larger projects, a time for severance should be found
when their contribution is minimal so that other members of the team will be able to carry on near
Saylor URL: http://www.saylor.org/books Saylor.org
363
normally. (It may be recommendable to arrange the termination to coincide with the finishing of a larger
project so that everyone may start fresh with the new, substitute employee.)
Third, the financial costs of the termination should be minimized. This means having clear reasons for the
termination and documents (pertaining to worker performance or behavior) supporting the reasons to
guard against lawsuits. Also, there should be clear understandings and prompt payment of wages for work
done, as well as reimbursements for travel expenses and the full satisfaction of all monetary obligations to
the employee. This will allow the human resources department to close the file.
With duties to the company covered, how can the manager’s duty to the employee be satisfied?
Consultants—both legal and ethical—typically share some bullet-point answers. First, the employee
should be addressed honestly and directly with a clear explanation for termination. Speak firmly, the
advice is; don’t waver or provide any kind of false hope. Further, the termination should not come as a
total surprise. Previous and clear indications should have been given concerning employee performance
along with specific directions as to what areas require improvement. Many companies institute a structure
of written warnings that clearly explain what the employee’s job is and why their work is not meeting
expectations.
Second, getting fired is embarrassing, and steps should be taken to minimize the humiliation. The
employee should be the first to know about the discharge. Also, the severance should occur in a private
meeting, not in view of other workers. To the extent possible, the employee should have an opportunity to
say good-bye to workmates or, if this is the preference, to leave discreetly. For this reason, a meeting late
in the day may be chosen as the appropriate time for notice to be given.
Third, to the extent possible and within the boundaries of the truth, an offer should be extended to
provide a recommendation for another job.
Fourth, make sure the employee gets all the money coming for work done, without having to jump
through hoops.
What Steps Can Management Take to Support Workers in a World Where Firing
Is Inevitable?
One response to the inescapable reality that firing happens is preemptive; it’s to reduce the moral
uncertainty and hardship before they arise. Two strategies serve this purpose: actions can be
Saylor URL: http://www.saylor.org/books Saylor.org
364
implemented to minimize the occasions when firing will be necessary, and steps can be taken to reduce
the severity of the firing experience for employees when it happens.
In her book Men and Women of the Corporation, Rosabeth Moss Kanter generates a list of measures that
corporations use to diminish firings, and reduce the professional impact for those who are let go. Here’s
an abbreviated selection of her recommendations, along with a few additions:
Recruit for the potential to increase competence, not simply for narrow skills to fill today’s slots.
Rotate assignments: allow workers to expand their competence.
Retrain employees instead of firing them.
Offer learning opportunities and seminars in work-related fields.
Subsidize employee trips to work-related conferences and meetings.
Provide educational sabbaticals for employees who want to return to school.
Encourage independence and entrepreneurship: turn every employee into a self-guided professional.
Keep employees informed of management decisions concerning the direction of the company: What units
are more and less profitable? Which ones will grow? Which may shrink?
Ensure that pensions and benefits are portable.
[4]
K E Y T A K E A W A Y S
At-will firing grants employers broad legal latitude to discharge employees, but it does not erase ethical
concerns.
Justifiable worker firings include cases where workers bear none, some, or all of the blame for the
discharge.
The act of firing a worker requires managers to weigh responsibilities to the organization and to the ex-
employee.
Steps can be taken to limit the need for, and effects of, employee discharge.
R E V I E W Q U E S T I O N S
1. What’s the difference between at-will and just cause firing?
2. How might fundamental changes in the marketplace require a company to fire workers?
Saylor URL: http://www.saylor.org/books Saylor.org
365
3. What is rank and yank?
4. When managers fire employees, what duties do they hold to the organization, and what are the duties to
the dismissed worker?
5. What are some steps organizations can take to protect their workers from the effects of discharge if firing
becomes necessary?
[1] Chris Edwards and Tad DeHaven, “Federal Government Should Increase Firing Rate,” Cato Institute, Tax and
Budget, no. 10 (November 2002), accessed May 24, 2011,http://www.cato.org/pubs/tbb/tbb-0211-10 .
[2] Allan Murray, “Should I Rank My Employees?,” Wall Street Journal, accessed May 24,
2011, http://guides.wsj.com/management/recruiting-hiring-and-firing/should-i- rank-my-employees.
[3] “Worst Ways to Get Fired,” CNNMoney.com, September 6, 2006, accessed May 24,
2011, http://money.cnn.com/blogs/yourturn/2006/09/worst-ways-to-get-fired.html.
[4] List adapted from Rosabeth Moss Kanter, Men and Women of the Corporation (New York: Basic Books, 1993),
Saylor URL: http://www.saylor.org/books Saylor.org
366
8.5 Case Studies
Fashionable
In her blog Love This, MJ (full name not provided) relates that she’s been an aspiring clothes designer
since she started sewing tops for her Barbie dolls. Things weren’t going well, though, as she tries to break
into the industry. One thing she notices is that there aren’t a lot of female fashion designers out there—
Vera Wang, Betsey Johnson, and a few more. Not many. So she starts trying to figure it out with questions
like these:
Do women want straight guy designers to dress them because they dress to please the men? It could make
sense: what that designer likes, the man in her life is going to love too.
Do women prefer gay men to dress them because gay men are their new girlfriends? Gay men are usually
more receptive to trends and physical appearances too.
Do women prefer women designers because she knows a woman’s body better?
Do men have the same issue? Do some men prefer a lesbian designer? Would they balk at being dressed
by a gay designer?
[1]
Q U E S T I O N S
1. Assume MJ is right when she hypothesizes that most women like straight male designers because straight
guys are the ones they’re trying to impress, so they want clothes straight guys like. Now imagine you’ve
been put in charge of a new line of women’s clothes. Your number one task: sales success. You’ve got five
applicants for the job of designing the line. Of course you could just ask them all about their sexual
Ima
ge re
mov
ed d
ue to
cop
yrig
ht is
sues
.
Saylor URL: http://www.saylor.org/books Saylor.org
367
orientation(s), but that might leave you open to a discrimination lawsuit. So could you devise a test for
new applicants that’s fair—that gives everyone an equal chance—but still meets your requirement of
finding someone who produces clothes that straight guys get excited about?
2. Four standard filters for job applicants are
o education level,
o high-risk lifestyle,
o criminal record,
o flamboyant presence in social media.
Which of these might be used to winnow out applications for a job as a clothes designer? Explain
in ethical terms.
3. MJ wonders whether women might prefer women designers because she knows a woman’s body better. Is
there a bona fide occupational qualification for a women’s fashion company to hire only women
designers? Is there a difference between a BFOQ based on sex and one based on sexual orientation?
4. MJ asks, “Do women prefer gay men to dress them because gay men are their new girlfriends?” Assume
you think there’s something to this. Could you design a few behavioral interview questions that test the
applicants’ ability to become girlfriends (in the sense that MJ means it) with their clients? Would these be
ethically acceptable interviews, or do you believe there’s something wrong and unfair about them?
God at Work
Image
remov
ed due
to cop
yright
issues.
Saylor URL: http://www.saylor.org/books Saylor.org
368
The University of Charleston is a private, nonreligious institution with a very particular job opening: the
Herchiel and Elizabeth Sims “In God We Trust” Chair in Ethics. According to the job description, the
successful candidate for this job as a professor “must embrace a belief in God and present moral and
ethical values from a God-centered perspective.”
[2]
Q U E S T I O N S
1. You’re in charge of getting applicants for this post and you’ve got a small advertising budget. What ethical
responsibilities should you consider when determining where to place the ad? How broadly should you
advertise the position?
2. According to Erwin Chemerinsky, a law professor at Duke University, “The description that
‘candidates must embrace a belief in God and present moral and ethical values from a God-
centered perspective,’ violates the Civil Rights Act as religious discrimination in
employment.”
[3]
Imagine you’re in charge of every step of the process of filling this job. How
could you respond in terms of
o bona fide occupational qualifications (BFOQs),
o testing,
o interviewing?
3. You’re the university president. The person who currently holds the In God We Trust
Professorship has, by all accounts, been doing a mediocre to poor (but not directly unacceptable)
job. One day you happen to trip across the person’s blog page and notice that your professor
claims to be a sadist and practices a mild form of devil worship (also, the prof’s favorite movie
is The Omen). Right now the In God We Trust Professor of ethics is down the hall lecturing to
seventy-five undergrads. You sneak to the door and listen from outside. The professor sounds just
like always: dull and passionless, but the talk is about the Bible, and nothing’s being said that
seems out of line with the job description. Still, you decide to terminate the relationship.
o In a pure at-will working environment, you can just fire the professor. But imagine you want to
demonstrate just cause. How does this change the way you approach the situation? What would
your just causes be?
Saylor URL: http://www.saylor.org/books Saylor.org
369
o The professor’s classes are passionless because he doesn’t believe in what he’s teaching. Still, his
teachings are not directly wrong. Does this case show why a manager may be ethically required in
certain situations to implement a strategy of rank and yank?
Explain.
Testing Baseball Players’ DNA
The New York Times reports that there’s a “huge difference between sixteen and nineteen years old,”
when you’re talking about prospects for professional baseball. A kid whose skills knock your socks off for a
sixteen-year-old just looks modestly good when he practices with nineteen-year-olds.
[4]
This is a significant problem in the Dominican Republic, which produces excellent baseball players but
little in the way of reliable paperwork proving who people really are and when they were born. The
Cleveland Indians learned all about that when they gave a $575,000 bonus to a seventeen-year-old
Dominican named Jose Ozoria, only to later find out he was actually a twenty-year-old named Wally
Bryan.
This and similar cases of misidentification explain why baseball teams are starting to apply genetic tests to
the prospects they’re scouting. Typically, the player is invited to provide a DNA sample from himself and
his parents to confirm that he’s no older than he claims. The player pays for the test and is reimbursed if
the results show he was telling the truth.
Ima
ge r
emo
ved
due
to c
opy
righ
t iss
ues.
Saylor URL: http://www.saylor.org/books Saylor.org
370
Q U E S T I O N S
1. Many experts in genetics consider testing an unethical violation of personal privacy.
o What does it mean to “violate personal privacy”?
o Can a utilitarian argument (the greatest good for the greatest number should be sought) in favor
of DNA testing in the Dominican Republic be mounted? What could it look like?
2. In the baseball world, other tests that clearly are allowed as part of the hiring process include testing a
player’s strength and speed. Is there anything in the fair application of these tests that may ethically
allow—even require—that baseball teams extract DNA to confirm the age?
3. Assume you accept that testing a prospect’s age is a bona fide occupational qualification (after all,
the job is to be a prospect: a developing player, not an adult one). Once you accept that, how do
you draw the line? Couldn’t teams be tempted to use DNA facts for other purposes?
The Times article interviews a coach who puts it this way:
I know [the baseball teams taking the DNA samples] are looking into trying to figure out
susceptibility to injuries, things like that. If they come up with a test that shows someone’s
connective tissue is at a high risk of not holding up, can that be used? I don’t know.
[5]
Can you formulate an ethical argument in favor of teams secretly using DNA tests to do just that,
check for as many yellow and red flags as possible in the young prospect’s genetic code?
4. Baseball scouting—the job of hiring excellent future players and screening out mediocre ones—is very
competitive. Those who do it well are paid well; those who don’t are cycled out quickly to make room for
someone else. You have the job, you have the DNA sample. What do you do? Why?
5. You decide to do the test in question four. The problem is people aren’t trees; you can’t age them
just by counting genetic rings—you also need to do some cross-testing with the parents’ DNA. You
do that and run into a surprise: it turns out that the young prospect’s father who’s so proud of his
athletic son isn’t the biological dad. Now what?
o Is there an argument here against DNA testing, period? What is it?
o Remember, the family paid for the test. Do you have a responsibility to give them these results?
Explain.
Saylor URL: http://www.saylor.org/books Saylor.org
371
6. Lou Gehrig was the first athlete ever to appear on a box of Wheaties. From 1925 to 1939 he played for the
Yankees in every game: 2,130 straight appearances, a record that lasted more than fifty years. He was
voted into the baseball Hall of Fame in 1939. He died in 1941 from a genetic disorder—yes, Lou Gehrig’s
disease—that today’s DNA tests would identify. Is there an ethical argument here against DNA testing of
prospects or one in favor? Or is the argument about this more theoretical—should the rules be decided
regardless of what has actually happened at some time or place? Explain.
7. In a different sport, the sprinter Caster Semenya won the world eight-hundred-meter challenge in 2009
with a time that few men could equal. She looked, in fact, vaguely like a man, which led the International
Athletics Federation to run a genetic gender test. She is, it turns out, neither a woman nor a man; she’s a
hermaphrodite: a little bit of both. Does the fact that genetic tests don’t always return clean, black-and-
white results make their use less advisable from an ethical perspective? Why or
why not?
Windfall at Goldman
Goldman Sachs is an expansive financial services company. Many clients are institutional: private
companies and government organizations wanting to raise cash seek Goldman’s help in packaging and
then selling stock or bonds. On the other side, private investors—wealthy individuals wanting to multiply
their riches—receive a hearty welcome at Goldman because they have the cash to purchase those stocks
and bonds. Ultimately, Goldman Sachs is a hub where large companies, governmental powers, and
wealthy people come and do business together.
Imag
e rem
oved
due
to c
opyr
ight
issue
s.
Saylor URL: http://www.saylor.org/books Saylor.org
372
Executives at Goldman Sachs are among the world’s highest paid. According to a New York Times article,
“At the center of Goldman’s lucrative compensation program is the partnership. Goldman’s partners are
its highest executives and its biggest stars. Yet while Goldman is required to report compensation for its
top officers, it releases very little information about this broader group, remaining tightlipped about even
basic information like who is currently a partner.”
[6]
The rest of the article investigates this shadowy partnership. The conclusions: “Goldman has almost 860
current and former partners. In the last 12 years, they have cashed out more than $20 billion in Goldman
shares and currently hold more than $10 billion in Goldman stock.”
This tally of accumulated wealth in Goldman stock doesn’t even include the standard salary and cash
bonuses the partners receive, but leaving that aside, here’s the math: $30 billion divided by 860 divided
by 12 should give some sense of the wealth each of these corporate stars is accumulating over the course of
a year. To give a provisional idea of how large the number of dollars is here, when you try plugging $30
billion into an iPhone calculator, you find the screen can’t even hold a number that long. Using a different
calculator yields this result: $2.9 million per partner every year.
The 2.9 million can be compared with the salary earned by the average American: $50,000 a year. The
Goldman partner gets that in less than a week. This huge money explains the clawing fight that goes on
inside Goldman to become a partner. The odds are long. Each time the books are opened to admit a new
class, only 1 of 330 Goldman employees makes the cut. It is, in the words of one former partner, “a very
Darwinian, survival-of-the-fittest firm.”
In the public comments section of the New York Times story about Goldman, a person identified as GHP
picks up on the firm’s characterization as a “Darwinian, survival-of-the-fittest” place. He wrote, “The
French revolution was also very Darwinian, let’s give that a try.” During the French Revolution, the
wealthy and powerful were rewarded with a trip to the guillotine.
Probably, GHP isn’t just annoyed about how much money executives at Goldman make, he, like a lot of
people, is peeved by the fact that the company was bailed out by the federal government during the 2008–
9 financial crisis. Had the taxpayers (people making $50,000) not kicked in, Goldman might’ve gone
bankrupt, and all that money its partners accumulated in stock would’ve vanished. As it happens, the US
government’s bailout was masterminded by US Treasury Secretary Henry Paulson. His previous job was
CEO (and partner) at Goldman.
Saylor URL: http://www.saylor.org/books Saylor.org
373
Q U E S T I O N S
1. Goldman is dominated by a “Darwinian, survival-of-the-fittest” mentality. What does that mean?
o In ethical terms, how can this mentality be justified?
o Would a company dominated by this mentality, whether it’s Goldman or not, be more likely to
announce job openings to a limited public, or as a massive public announcement? Why?
2. Describe the advantages of a “behavioral interview.” If you were in charge of hiring for a company seeking
employees who flourish in a survival-of-the-fittest environment, what kind of question might you ask in a
behavioral interview? Why?
3. One contributor to the New York Times comments section writes, “There are sure to be lots of
pointed, angry posts about how unfair it is that these guys make so much money etc. But if we are
honest, there is a fair amount of envy and pure remorse that we weren’t bright enough to go
down that path! And these guys are very bright.”
How could these comments be construed to explain why high wages and big bonuses are used by
Goldman to motivate its workers? What is it that makes big money (or the possibility of big
money) function as a powerful motivator to encourage employees to work hard and well?
Ethically, how can this use of big money be justified?
4. One difference between offering an employee a wage increase and offering a bonus is that the
latter doesn’t come automatically the next year. The employee has to earn it from scratch all over
again.
o Why might managers at Goldman award their best workers with a bonus instead of a wage
increase?
o By appeal to an ethical theory, could you make the case that, in general, employees should be
paid mainly through a bonus system? How would the theory work at two extremes: wealthy
Goldman executives and waitresses at a corner diner?
5. Given the kind of work that’s done at Goldman—bringing wealthy people and powerful organizations
together to make deals—why might party aptitude (the ability to mix socially after hours) be considered
when deciding who does and who doesn’t make partner at Goldman? How could that decision be justified
ethically? How could it be criticized ethically?
Saylor URL: http://www.saylor.org/books Saylor.org
374
6. Make the case that in theoretical terms, managers at Goldman have an ethical responsibility to institute
the process of rank and yank.
The Five O’Clock Club
A Washington Post story about firing employees relates that some companies use “the surgical method:
terminations that last about 15 seconds, after which former employees are ushered off company
property.”
[7]
It doesn’t have to be that way, though. For about $2,000 per fired employee, the outplacement company
Five O’Clock Club will help employers manage the actual termination moment more compassionately.
Later on, the fired worker receives a year of career coaching to help get back on track.
What do the Five O’Clock Club recommend managers do at the critical moment when giving the bad
news? To answer, according to the Post, they offer a booklet titled How to Terminate Employees While
Respecting Human Dignity, which “asks managers to approach layoffs with the understanding that,
‘unlike facilities and equipment, humans have an intrinsic worth beyond their contribution to the
organization.’”
[8]
Then some catchphrases are provided for managers to use:
George, you’ve been a trooper. I’m sorry that this organization has moved in a different direction.
George, you have made many good friends here. We hope those friendships will continue.
George, you have made considerable and long-lasting contributions and they are acknowledged and
appreciated.
[9]
Imag
e rem
oved
due
to c
opyr
ight
issue
s.
Saylor URL: http://www.saylor.org/books Saylor.org
375
Five O’Clock Club vice president Kim Hall—who downs a lot of Tylenol and coffee on the job—relates
several other phrases that may be helpful:
I know this is hard, but you’ll get back on your feet.
The timing could actually work in your favor. A lot of people take vacation in the summer. There’s no
competition for job hunters.
Maybe this is a chance to begin your dream career. Follow your heart.
[10]
In sum, the Five O’Clock Club helps workers feel better when they’re fired, and helps them get on with
their lives. Meanwhile, employers get a hedge against lawsuits. The outplacement service, according to the
Five O’Clock Club literature, “can redirect anger or anxiety away from the organization and…encourage
the newly-fired to sign their severance agreements so they can get on with their lives.”
[11]
Q U E S T I O N S
1. The Five O’Clock Club charges $2,000 per firing. If you were fired, would you prefer to receive the
compassionate end the Five O’Clock Club provides, or just get shown the door but also get to keep
that $2,000 for yourself?
o If you’re the boss, do you have the right to decide this for the fired employee? Why or why not?
o If you’re the boss, do you have the responsibility to decide this for the fired employee? Why or
why not?
2. According to the Five O’Clock Club, “Unlike facilities and equipment, humans have an intrinsic
worth beyond their contribution to the organization.”
o Does this sound like utilitarian ethical thinking to you, or is it more in line with the notion of an
ethics guided by basic duties and rights? Why?
o Probably, everyone agrees that humans aren’t just machines that can be installed and replaced.
But can an ethical argument be made to treat people in the workplace as machines—that is, to
abruptly hire them when they’re useful and fire them when they’re not? What ethical theory (or
theories) could help you make the case?
3. In general terms, here are three firing situations:
Saylor URL: http://www.saylor.org/books Saylor.org
376
o an economic downturn (good workers are sacked because the company can’t afford to keep
them)
o rank and yank (workers are fulfilling their duties but not as well as most of the others)
o misbehavior (a worker is fired directly because of something done or not done)
Looking at these three contexts and the Five O’Clock Club, do you think their services should be
hired in all three situations? Do the ethics of firing change depending on why the person is being
fired? Explain.
4. Recall some of the Five O’Clock Club’s pre-packed firing sentences:
o George, you’ve been a trooper. I’m sorry that this organization has moved in a different direction.
o George, you have made many good friends here. We hope….
o George, you…are acknowledged and appreciated.
o Maybe this is a chance to begin your dream career. Follow your heart.
The contrasting method of firing employees—the surgical method—is to look the person in the
eye, say you’re fired, and have security march the ex-employee out the door, all in less than a
minute.
o Is it possible to make the case that the surgical method is actually more compassionate and
respectful?
o Is there a place for compassion in business? From a manager’s perspective, how should
compassion be defined within a business context?
5. Maybe the Five O’Clock Club gets hired because a company really wants to help and support fired
employees. Or maybe the company doesn’t really care about them; all they want is to avoid wrongful
termination lawsuits. Ethically, does it matter why the company contracts the Five O’Clock Club? Explain.
[1] “Sexual Orientation in the Fashion Industry,” Love This! (blog), accessed May 24,
2011,http://lovethis.wordpress.com/2007/07/28/sexual-orientation-in-the-fashion-industry.
[2] Rob Capriccioso, “Divinely Inspired Bias?,” Higher Ed, March 1, 2006, accessed May 24,
2011, http://www.insidehighered.com/news/2006/03/01/charleston.
Saylor URL: http://www.saylor.org/books Saylor.org
377
[3] Rob Capriccioso, “Divinely Inspired Bias?,” Higher Ed, March 1, 2006, accessed May 24,
2011, http://www.insidehighered.com/news/2006/03/01/charleston.
[4] Michael S. Schmidt and Alan Schwarz, “Baseball’s Use of DNA Raises Questions,” New York Times, July 21, 2009,
accessed May 24, 2011,http://www.nytimes.com/2009/07/22/sports/baseball/22dna.html?hp.
[5] Michael S. Schmidt and Alan Schwarz, “Baseball’s Use of DNA Raises Questions,” New York Times, July 21, 2009,
accessed May 24, 2011,http://www.nytimes.com/2009/07/22/sports/baseball/22dna.html?hp.
[6] Susanne Craig and Eric Dash, “Study Points to Windfall for Goldman Partners,” New York Times, January 18,
2011, accessed May 24, 2011,http://dealbook.nytimes.com/2011/01/18/study-points-to-windfall-for-goldman-
partners/?hp.
[7] Eli Saslow, “The Art of Letting Employees Go,” Washington Post, August 9, 2009, accessed May 24,
2011, http://www.washingtonpost.com/wp-
dyn/content/article/2009/08/08/AR2009080802659.html?hpid=topnews.
[8] Eli Saslow, “The Art of Letting Employees Go,” Washington Post, August 9, 2009, accessed May 24,
2011, http://www.washingtonpost.com/wp-
dyn/content/article/2009/08/08/AR2009080802659.html?hpid=topnews.
[9] Eli Saslow, “The Art of Letting Employees Go,” Washington Post, August 9, 2009, accessed May 24,
2011, http://www.washingtonpost.com/wp-
dyn/content/article/2009/08/08/AR2009080802659.html?hpid=topnews.
[10] Eli Saslow, “The Art of Letting Employees Go,” Washington Post, August 9, 2009, accessed May 24,
2011, http://www.washingtonpost.com/wp-
dyn/content/article/2009/08/08/AR2009080802659.html?hpid=topnews.
[11] Eli Saslow, “The Art of Letting Employees Go,” Washington Post, August 9, 2009, accessed May 24,
2011, http://www.washingtonpost.com/wp-
dyn/content/article/2009/08/08/AR2009080802659.html?hpid=topnews.
- Structure Bookmarks
Chapter 8: Manager’s Ethics: Getting, Promoting, and Firing Workers
Chapter 8: Manager’s Ethics: Getting, Promoting, and Firing Workers
Chapter 8: Manager’s Ethics: Getting, Promoting, and Firing Workers
Chapter 8: Manager’s Ethics: Getting, Promoting, and Firing Workers
from The Business Ethics Workshop was adapted by Saylor Academy and is available under a
Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported
Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported
license without attribution as requested by the work’s original creator or licensor.
Chapter 7: Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5 from
The Business Ethics Workshop was adapted by Saylor Academy and is available under a
Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported license without
attribution as requested by the work’s original creator or licensor. UMGC has modified this work
and it is available under the original license.
http://www.saylor.org/site/textbooks/The%20Business%20Ethics%20Workshop
https://creativecommon
s.
org/licenses/by-nc-sa/3.0/
https://creativecommons.org/licenses/by-nc-sa/3.0/
Saylor URL: http://www.saylor.org/books Saylor.org
277
Chapter 7
Employee’s Ethics: Making the Best of the Job You
Have as You Get from 9 to 5
Chapter Overview
Chapter 7 “Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5” examines
some ethical decisions facing employees. It considers the values guiding choices made over the course of a
workday.
Saylor URL: http://www.saylor.org/books Saylor.org
278
7.1 Taking Advantage of the Advantages: Gifts, Bribes, and
Kickbacks
L E A R N I N G O B J E C T I V E S
1. Define a conflict of interest.
2. Show how gifts in the business world may create conflicts of interest.
3. Delineate standard practices for dealing with gifts.
4. Consider how receiving gifts connected with work may be managed ethically.
5. Define bribes and kickbacks in relation to gifts.
6. Show how the ethics of bribes and kickbacks can be managed inside the ethics of gifts.
Living the High Life
If you’re young, looking for work, and headed toward a big city (especially New York), then you could do a
lot worse than landing a job as a media buyer for an advertising agency. According to an article in New
York magazine, it’s working out well for twenty-four-year-old Chris Foreman, and it’s working out despite
a salary so measly that he can’t afford his own place, a ticket to a movie, or even to add meat to his
homemade spaghetti.
[1]
This is what makes the job click for Foreman: as a media buyer, he oversees where big companies like
AT&T place their advertisements. And because those ads mean serious money—a full page in a glossy,
top-flight magazine costs about five times what Foreman earns in a year—the magazines line up to throw
the good life at him. Thanks to the generosity of Forbes magazine, for example, Foreman spends the
occasional evening on the company’s vast Highlander yacht; he drinks alcohol almost as old as he is,
munches exquisite hors d’oeuvres, and issues orders to white-suited waiters. While guests arrive and
depart by helicopter, Foreman hobnobs with people the rest of us see only on movie screens. A scan of the
Highlander guest book turns up not just celebrities but serious power too: Margaret Thatcher was a guest
once.
A night on the Highlander is a good one, but it’s far from the only event lighting up Foreman’s glitzy life. A
few of his other recent outings are listed in the article, with some estimated cash values attached: An all-
Saylor URL: http://www.saylor.org/books Saylor.org
279
expenses-paid ski weekend (worth almost $1,000, in Foreman’s estimation); tickets to see Serena
Williams at the US Open ($75 each); invites to the Sports Illustrated Swimsuit Issue party, where he
chatted with Heidi Klum and Rebecca Romijn-Stamos; prime seats for sold-out Bruce Springsteen
concerts ($500 each); dinners at Cité, Sparks, Il Mulino, Maloney & Porcelli, and Monkey Bar, to name a
few of his favorites ($100 a pop).
Foreman observes the irony of his life: “It’s kind of crazy, I had dinner at Nobu on Monday [the kind of
restaurant few can afford, even if they’re able to get a reservation], but I don’t have enough money to buy
socks.”
[2]
The Highlander’s spectacularly wealthy owner is Steve Forbes. If he invites former British Prime Minister
Margaret Thatcher aboard for a holiday weekend, you can understand why: she’s not just an interesting
person; she’s living history. Serena Williams would be an interesting guest, too, in her way. The same goes
for Heidi Klum and Ms. Romijn-Stamos, in a different way. What they all have in common, though, is that
you know exactly what they’ve got, and why a guy with a big bank account would treat them to an evening.
But what, exactly, does Mr. Forbes expect to get in return for inviting media buyer Chris Foreman? The
answer: “We media buyers are the gatekeepers—no one at AT&T actually purchases the ads. If at the end
of a buying cycle, your budget has an extra $200,000, you’ll throw it back to the person who treated you
best.”
[3]
The answer, in a word, is money.
What’s Wrong with Gifts and Entertainment?
The fundamental problem with the gifts Foreman received and the free entertainment he enjoyed is that
they create a conflict of interest, a conflict between professional obligations and personal welfare. As a
paid media buyer, it’s Foreman’s job and obligation to buy ads in the magazines that will do his clients the
most good, that’ll deliver the biggest bang for the buck. But against that, as a single twenty-four-year-old
guy in New York City, it’s in his personal interest to purchase ads in Forbes magazine since that probably
gets him invited back to the Highlander with its free drinks, exquisite dinners, and, if he’s lucky, some face
time with women he’s already seen quite a bit of in Sports Illustrated. This is a tough spot, and there are
two broad ways it can play out:
Saylor URL: http://www.saylor.org/books Saylor.org
280
1. Foreman can do the parties at night, go home, sleep, wake up with a clear head, and buy the best ads for
his client. Let’s say the advertising money he’s spending belongs to AT&T and they’re trying to attract new
clients in the forty-five to fifty-five demographic of heavy cell phone users. He takes that target, checks to
see what magazine those people like to read more than any other, and buys a full pager there. If the
magazine happens to be Forbes, great, if not, then Forbes doesn’t get anything back for its party. In this
case, Foreman knows he’s done right by AT&T and his employer. To the best of his ability, he guided
advertising money to the spot where it’ll do the most good. There remains a potential problem here,
however, which is the appearance of a conflict of interest. Even though Foreman didn’t let the parties
affect his judgment, someone looking at the whole thing from outside might well suspect he did if it
happens that Forbes gets the ad buy. This will be returned to later on in this chapter.
2. The darker possibility is that Forbes isn’t the best media buy, but they get the ad anyway because
Foreman wants to keep boarding the Highlander. In this case, Foreman is serving his own interest but
failing his obligations to his employer and to his client.
In pure ethical terms, the problem with the second possibility, with selling out the client, can be reduced
to an accusation of lying. When Foreman or any employee signs up for a job, shows up for work, and then
accepts a paycheck, they’re promising to be an agent for the organization, which is formally defined in
commercial law as someone acting on behalf of the organization and its interests. In some situations it
can be difficult to define exactly what those interests are, but in Foreman’s it’s not. He does well for his
employer when he gives the clients the best advice possible about spending their advertising dollars.
That’s his promise and he’s not fulfilling it.
Redoubling the argument, in the case of the typical media buyer, there’s probably also an explicit clause in
the employment contract demanding that all media advice be objective and uncorrupted by personal
interest. Even without that formal step, however, the shortest route to an ethical condemnation of buying
ads because a night on the Highlander (or some other gift) has been received is to underline that the act
turns the media purchaser into a liar. It makes him or her dishonest every time they come into work
because they’re not providing the objective and impartial advice they promise.
In discussing conflicts of interests, it’s important to keep in mind that those who find themselves caught
up in one haven’t necessarily been corrupted. Just because Foreman finds himself torn between giving
impartial advice to his client and giving the advice that gets him good parties doesn’t mean his judgment
Saylor URL: http://www.saylor.org/books Saylor.org
281
is poisoned. That said, it’s extremely difficult to walk away from a conflict of interest unstained: any time
serious gifts or rich entertainment gets injected into a business relationship, suspicious questions about
professionalism are going to seep in too.
Finally, there are two broad ways of dealing with gifts, especially those creating conflicts of interest. They
can be flatly refused, or rules can be formulated for accepting them responsibly.
Refusing Gifts and Entertainment
One way to avoid the gift and conflict of interest problem altogether for Chris Foreman or anyone in a
similar situation is to simply refuse any gifts from business partners. Far more frequently than private
businesses, government organizations take this route. The approach’s advantage, obviously, is that it
wipes out the entire question of wrongdoing. The disadvantage, however, is that it dehumanizes work; it
seems to forbid many simple and perfectly appropriate gestures of human interaction.
Here’s an example of what can happen when efforts to eradicate conflicting interests go to the extreme:
it’s from a New York Times front-pager about the state governor:
Governor David A. Paterson violated state ethics laws when he secured free tickets to the opening
game of the World Series from the Yankees last fall for himself and others, the New York State
Commission on Public Integrity charged on Wednesday.
[4]
So, the governor is in trouble because he got some tickets to watch his home team play in the baseball
championship? That’s going to make Chris Foreman’s head swim. Without getting into the details of the
Paterson case, accepting these tickets doesn’t seem like a huge transgression, especially for someone
whose job pays well and is already packed with gala events of all kinds. It’s not as though, in other
words,
Peterson’s going to be blown away by the generosity or become dependent on it. In the case of Foreman
who could barely afford to eat, it’s reasonable to suspect that he may come to rely on his occasional trip to
the Highlander, but it just doesn’t seem likely that the governor’s judgment and ability to fulfill
professional obligations are going to be distorted by the gift provided by the New York Yankees baseball
club. More, as the state’s elected leader, a case could probably be made that the governor actually had a
professional responsibility to show up and root for the home team (as long as the visitors aren’t the Mets).
As a final note, since the now former governor is legally blind, the value of the gift seems limited since he
couldn’t actually see the game he attended.
Saylor URL: http://www.saylor.org/books Saylor.org
282
Despite this case’s apparent frivolity, the general practice of eliminating conflict of interest concerns by
simply banning gifts can be justified. It can be because so many gifts, just by existing, create the
appearance of a conflict of interest. An appearance of conflict exists when a reasonable person looking at
the situation from outside (and without personal knowledge of anyone involved) will conclude from the
circumstances that the employee’s ability to perform his or her duties may be compromised by personal
interest. This is different from an actual conflict because when there’s really conflict, the
individual feels torn between professional obligations and personal welfare. Almost certainly, Foreman
was tempted to help out Forbes because he really liked the parties. But the case of Governor Paterson
presents only the appearance of a conflict of interest because we don’t know whether he even wanted the
tickets to the Yankees game. Given the fact that he’s blind, he may well have preferred staying home that
night. Still, for those of us who can’t know his true feelings, it does seem as though there might,
potentially, be some incentive for Paterson to return the Yankee favor and provide them some special
advantage. It’s almost certain that at some time in the future, the baseball club will have an issue up for
debate by the state government (perhaps involving the construction of a stadium or maybe just a license
to sell beer inside the one they currently have), and as soon as that happens, the appearance of conflict is
there because maybe Paterson’s response will be colored by the tickets he got.
Conclusion. Refusing to accept any gifts from business associates is a reasonable way of dealing with the
ethical dilemma of conflicting interests. By cutting the problem off at the roots—by eliminating not only
conflicts but the appearance of them—we can go forward with confidence that a worker’s promise to
represent the organization faithfully is uncorrupted by the strategic generosity of others.
What Other Remedies Are Available for Conflict of Interest Problems Stemming
from Gifts?
Categorically refusing gifts may be recommendable in some cases, but in most economic situations a total
ban isn’t realistic. People make business arrangements the same way they make friendships and romance
and most other social things—that mean invitations to the Highlander if you’re lucky, or just to a few
Budweiser’s in the hotel bar. And if you turn everyone down every time, it’s probably going to dampen
your professional relationships; you may even lose the chance to get things done because someone else
will win the contract between drinks.
Saylor URL: http://www.saylor.org/books Saylor.org
283
So where does the line get drawn for accepting gifts with ethical justification? Whether you happen to be a
renowned politician in a large state or someone just out of school trying to make a go of it in the world,
there are a number of midpoints between Governor Paterson’s obligation to refuse tickets to a game he
couldn’t see anyway and Chris Foreman’s raucous partying on the Highlander. Three of the most common
midpoints are
1. transparency,
2. recusal,
3. organizational codes.
Transparency, as the word indicates, manages the acceptance of gifts by publicly recognizing their
existence. The idea is that if Foreman is willing to openly acknowledge exactly what he’s getting
from Forbes magazine, then we can trust that there’s nothing underhanded going on, no secret
agreements or deals. Of course the gifts may still influence his judgment, but the fact that they’re public
knowledge at least removes the sense that he’s trying to get away with something.
Recusal is abstaining from taking part in decisions contaminated by the appearance of a conflict of
interest. Foreman could, for example, keep going to Highlander parties but not manage any media buying
for the demographic that reads Forbes. It’s fairly easy to imagine a team of media buyers working together
on this. Every time something comes up that might be right for Forbes, Foreman passes the decision on to
Sam Smith or whoever and so removes himself from the conflict.
In the public sphere, especially politics and law, it’s common for judges and legislators to remove
themselves from considering issues bearing directly on their welfare. A judge who owns stock in the
Omnicom communications group may recuse herself from hearing a civil case brought against the
company. Legislators deciding what the salary should be for legislators may ask for recommendations
from an independent panel.
Organizational codes are one of the theoretically easiest but also one of the more practically difficult
ways to handle gifts. The advantage of a code is that it can provide direct responses for employees trying
to decide whether they can accept a gift. In Oregon, for example, legislators are prohibited from accepting
gifts valued at more than fifty dollars. Assuming the code is reasonable—and in this case it was judged so
Saylor URL: http://www.saylor.org/books Saylor.org
284
by the state’s supreme court—legislators may assert that by implication accepting a gift valued under that
amount is, in fact, ethical.
[5]
However, the problem with codes is that, like laws, they frequently leave gray areas. That’s especially true
in a media buyer’s world where so much is spent on entertaining. In that kind of reality, it’s very difficult
to put a specific price on everything. A night on the Highlander, obviously, is worth a lot to Foreman, but
how does it appear in the accounting books of dollars and cents? Because it’s hard to know, monetary
limits provide only vague ethical guidance for those in Foreman’s line of work.
The broader lesson is that gifts come in so many forms—and with values that can be so difficult to
accurately measure—that it’s virtually impossible to write something encompassing all the specific
possibilities. Many codes of conduct, therefore, end up sounding noble but are really just saying, “Figure it
out for yourself.” Take a look at the last lines from the Code of Conduct from Omnicom, a massive group
of companies including many leading advertising firms that purchase ads in Forbes:
We expect each employee to exercise good judgment and discretion in giving or accepting any
gift. No set of specific rules can anticipate or capture every possible instance in which an ethical
issue may arise. Instead, all of us must be guided by the overarching principle that we are
committed to fair and honest conduct and use our judgment and common sense whenever
confronted with an ethical issue.
[6]
Questions to Ask before Accepting a Gift
In their book Moral Issues in Business, authors William Shaw and Vincent Barry formulate a list of
questions that, when answered, can provide support and clarity for making decisions about whether a gift
may be accepted. They’re not going to tell you what to do—there’s no magic guide—but they can help you
see things more clearly. In modified form and with some additions and subtractions, here’s the list.
[7]
Is there a conflict of interest, or the appearance of a conflict, that arises because of the
gift? Not every gift raises conflict of interest concerns. Maybe a marketer at Forbes gets a late
cancellation for a Highlander night and can’t find any targeted media buyer to fill the spot, so the invite
gets handed off to a buyer specializing in purchasing ads for young teenagers. Why not? It’d just go to
waste otherwise. And should that lucky media buyer say yes? It’s difficult to find an ethical reason not to
since no conflict of interest concerns seem to arise.
Saylor URL: http://www.saylor.org/books Saylor.org
285
What’s the gift’s value? This can be an easy one. When Foreman was invited to a Springsteen concert
he could just look at the tickets and see that he’d been offered something worth $500. On the other hand,
getting the chance to chat up a Sports Illustrated swimsuit model on the Highlander is going to be harder
to quantify. In those cases where a value can be set, the number allows a clean dividing line: anything
above the a specified amount gets categorized as potentially influencing a decision and so causing a
conflict of interest, while any gift worth less may be considered nominal, too small to threaten
professionalism. What’s the magic number? That depends on who’s involved and the general context, but
many organizations are currently setting it at $25, which is, not incidentally, the limit the IRS sets for
business deductions for gifts to any single person during one year.
Is the gift provided out of generosity or for a purpose? No one can peer into the soul of another,
but something offered during the holiday season may be more acceptable than the same thing offered just
before a major advertising buy is being made.
What’s the gift’s purpose? Just because a gift isn’t an outpouring of generosity so much as an
expression of self-interest doesn’t mean there’s a corrupting intent. For example, if Forbes magazine
sends Foreman a free copy of each issue, that’s more like advertising for themselves than an attempt to
buy the guy off. Almost all of us have had the same experience: we’ve received calendars or notepads in
the mail from a local real estate agent or insurance seller. These aren’t attempts to buy us, just ways to
present their services. On the other hand, it’s hard to see how tickets to a Springsteen concert given by a
magazine can be anything but an attempt to induce the receiver to give a gift back by throwing some ad
money the publication’s way.
Is it a gift or entertainment? Traditionally, a distinction has been drawn between giving gifts and
paying for entertainment. As a rule of thumb, the former is something you can take home and the latter is
enjoyed on the spot. Presumably, entertainment raises fewer ethical concerns because it isn’t a payoff so
much as a courtesy extended to a media buyer in exchange for hearing a pitch. If someone
from Forbes wants to convince Foreman that her magazine is the best place for advertising dollars, then it
doesn’t seem so bad, buying him a lunch or a few beers while he hears (endures) the pitch. After all, it’s
her job to sell the magazine and it’s his to know the advantages all the magazines offer. This is just normal
business. Gifts, on the other hand, seem much more like bribes because they don’t exist in the context of
normal business conversations. Take the tickets to a Springsteen concert; they have nothing to do with
Saylor URL: http://www.saylor.org/books Saylor.org
286
business and can’t be justified as a courtesy extended within the boundaries of normal exchanges between
magazines and ad buyers. Finally, with respect to the parties on the Highlander, those are technically
entertainment since Foreman can’t take the yacht home afterward. It doesn’t sound, though, like a lot of
business talk was going on.
What are the circumstances? There’s a difference between Forbes magazine handing concert tickets
to media buyers to mark the launching of a new column in the magazine and their constant, ongoing
provisioning. As part of the launch campaign, it’s much easier for Foreman to accept the gift without
feeling trapped by an obligation to throw business Forbes’ way since he can respond to the gesture simply
by being aware that the new column is there and taking it into account when he makes future buying
decisions.
What power do I have to bestow favors in return for gifts? Foreman’s job title is assistant media
buyer, meaning he probably doesn’t actually decide which magazine gets the business. He just gathers
research data and makes a recommendation to the boss. Does this free him to enjoy the Highlander
night’s guilt free? Hard to be sure, but it definitely helps him fulfill his professional obligations: it’s just
much easier to do the data mining and recommendation writing in the back office than it is to be the guy
sitting out front telling Forbes magazine the answer’s “no,” even though the parties were great. If that’s
the way things go, Foreman may be a coward for letting his boss deliver the bad news to Forbes, but that’s
a personal ethical failure, not a business one.
What’s the industry accepted practice? In New York state government, as the Paterson case shows,
the accepted practice is no gifts, period. In the looser world of Manhattan media business, New York
magazine sums things up: “Everybody in our industry is guilty of it. Many of those who travel for work
take their boyfriends and call it a vacation.”
[8]
Care should be taken here to avoid the conclusion that
whatever everyone else is doing is OK. That’s not it at all. But it is true that if everyone’s guilty—if all the
magazines are lavishing gifts on media buyers, and all the buyers are accepting—it’s going to be much
easier for Foreman to satisfy his professional obligations. It’s going to be easier for him to tell Forbes “no”
(assuming the demographic facts recommend that) when all the magazines are gifting about equally and
everyone’s accepting than it would be if Forbes were the only magazine giving the gifts and he was the
only one accepting.
Saylor URL: http://www.saylor.org/books Saylor.org
287
What’s the organization’s policy? As the Omnicom Code of Conduct illustrates, sometimes policy
provides words but no guidance. As the New York government policy (which prohibits all gifts) shows,
however, sometimes there is guidance. When true guidance is provided, an employee may fairly reason
that following it is fulfilling professional obligations to the employer.
What’s the law? Generally, laws on gift giving and receiving apply to public officials and those working
with them (politicians, judges, lawyers, businesses doing work for the government). As is always the case,
the legal right doesn’t in itself make ethical right. It can, however, provide the foundation for making an
ethically recommendable decision, assuming other factors—many of which will come up through the set of
questions just listed—have not been ignored.
Conclusion. Gifts cause a conflict of interest when they threaten to corrupt an employee’s judgment on
business matters related to the interests of the person or organization providing the gift. Sometimes gifts
are given with that intention, sometimes not. Regardless, and no matter what the law or corporate
philosophy may be, it’s frequently the employee who ends up deciding whether a gift will be accepted. If it
is, a responsibility follows to justify accepting it.
What’s the Difference among Gifts, Bribes, and Kickbacks?
One advantage of the developed framework for thinking ethically about gifts in the midst of advertising
business relationships is that it provides a compact way to manage the ethics of bribes and kickbacks.
Bribes are gifts—everything from straight cash to entertainment—given to media buyers with the direct
purpose of corrupting their professional judgment by appealing to their personal welfare. When a
representative from Forbes magazine gives Chris Forman tickets to the Springsteen show with the
intention of spurring Foreman to consider buying ad space in Forbes, that’s a gift; it’s left to Foreman to
decide whether he can accept it without betraying his obligation to serve his employer’s interests. When,
on the other hand, the rep gives the same tickets with the intention of getting Forman to directly buy the
space, that’s a bribe. A bribe, in other words, is an extreme conflict of interests where the individual’s
personal interest completely overwhelms the professional responsibilities implied by his job. If Foreman
accepts this kind of gift—one where he knows the intention and accepts that the objectivity of his
judgment will be blinded—then he’s crossed into the zone of bribery. Receiving bribes, finally, seems
Saylor URL: http://www.saylor.org/books Saylor.org
288
unethical for the same reason that accepting gifts can be unethical: it’s betraying the promise to act as an
agent for the organization.
Kickbacks resemble bribes except that instead of the gift or entertainment being given over first and then
the ad space getting purchased, the ad space is purchased and then a portion of that revenue is sent back
to the media buyer as cash or Springsteen tickets or whatever. Regardless of whether the media buyer gets
his reward first and then buys the ad space, or buys the space and then gets rewarded, what’s happening
on the ethical level doesn’t change. Personal interest is being exploited to corrupt professional judgment.
That means accepting the reward becomes a form of lying since it’s a betrayal of the implicit promise
made to do the job right when you sign the contract.
In the Real World, What’s the Difference among Gifts, Bribes, and Kickbacks?
In actual day-to-day business it can be extremely difficult to distinguish among gifts, bribes, and
kickbacks because at bottom all of them spark conflicts of interest. All of them, consequently, are also
going to incite at least remote suspicions of corruption. Of course it’s always easy to find examples at one
extreme or the other. On the safe side, if a woman seeking your business pays for one cup of coffee for you
once, it’s unlikely that you’ll give her proposal any special consideration, and it’s doubtful that she’d
expect it. If she offers to make your car payments on the other hand, it’s pretty clear something’s going on.
Usually, however, the lines are blurry and the reality more like the one Foreman lived through. The exact
monetary value of what he received wasn’t certain. Did he get the invitations with the intention of having
his judgment tainted or were they extended as a courtesy and in accordance with the industry’s common
practice? Would he get more and better invitations if he sent Forbes magazine some extra dollars? While
these questions don’t have certain answers, the ethics can be rendered in straightforward form. Agents of
an organization have a duty to act in favor of the organization’s interests regardless of what happens after
hours.
K E Y T A K E A W A Y S
Conflicts of interest arise when an individual’s professional judgment is challenged by an appeal to
personal interest, as occurs when a prospective client offers a gift.
Saylor URL: http://www.saylor.org/books Saylor.org
289
Because suspicions of unethical practices arise almost immediately when a conflict of interest exists, even
appearances of a conflict of interest present problems in business.
Standard practices for dealing with gifts include outright refusal, acceptance of gifts with only nominal
value, acceptance in accord with industry practices, and good sense within a clearly understood situation.
In certain contexts, gifts of significant value may be accepted ethically, as long as they don’t corrupt
professional judgment.
Bribes and kickbacks can be managed ethically within the framework constructed for gifts. Both bribes and
kickbacks function as gifts that do, in fact, corrupt an employee’s professional judgment.
R E V I E W
Q U E S T I O N S
1. Why do gifts create conflicts of interest?
2. What is the main advantage and disadvantage of dealing with gifts and conflicts of interest by prohibiting
the acceptance of gifts?
3. What questions could you ask yourself to help frame the question as to whether you can ethically accept a
business-related gift?
4. What’s the difference between a conflict of interest and the appearance of a conflict?
5. What’s the difference between a gift and a bribe?
6. What’s the difference between a bribe and a kickback?
[1] Sarah Bernard, “Let Them Eat Crab Cakes,” New York, accessed May 19,
2011,http://nymag.com/nymetro/news/media/features/2472.
[2] Sarah Bernard, “Let Them Eat Crab Cakes,” New York, accessed May 19,
2011,http://nymag.com/nymetro/news/media/features/2472.
[3] Sarah Bernard, “Let Them Eat Crab Cakes,” New York, accessed May 19,
2011,http://nymag.com/nymetro/news/media/features/2472.
[4] Nicholas Confessor and Jeremy “Paterson’s Ethics Breach Is Turned Over to Prosecutors,” New York Times,
March 3, 2010, accessed May 19, 2011,http://www.nytimes.com/2010/03/04/nyregion/04paterson.html?hp?hp.
Saylor URL: http://www.saylor.org/books Saylor.org
290
[5] Bill Graves, “Oregon Supreme Court Upholds $50 Gift Limit for Legislators, Public Officials,” OregonLive.com,
December 31, 2009, accessed May 19,
2011,http://www.oregonlive.com/news/index.ssf/2009/12/oregon_supreme_court_upholds_5.html.
[6] “Code of Conduct,” Omnicom Group, last updated October 16, 2008, accessed May 19,
2011, http://www.omnicomgroup.com/corporategovernance/codeofconduct.
[7] William Shaw and Vincent Barry, Moral Issues in Business (Belmont, CA: Thomson Wadsworth, 2007), 398–99.
[8] Sarah Bernard, “Let Them Eat Crab Cakes,” New York, accessed May 19,
2011,http://nymag.com/nymetro/news/media/features/2472.
Saylor URL: http://www.saylor.org/books Saylor.org
291
7.2 Third-Party Obligations: Tattling, Reporting, and Whistle-
Blowing
L E A R N I N G O B J E C T I V E S
1. Define third-party obligations.
2. Elaborate three standard responses to third-party obligations.
3. Define whistle-blowing.
4. Consider justifications and requirements for whistle-blowing.
Caught in the Crossfire
A hypothetical situation. You work at Omnicom, at the desk next to Chris Foreman. Like him, you’re an
assistant media buyer. Though your area of concentration is distinct (you’re in charge of placing ads on
radio stations) you team up with him from time to time to run numbers, and you know enough about how
it all works to recognize when something’s going wrong. In your opinion, it is. Chris is sending ads
to Forbes that would deliver more for the client if they’d been placed in Business Week. Further, you
believe he’s doing it in exchange for the gifts. You can’t prove that but you do know this: he’s occasionally
supplementing his lousy income by selling some of what he’s receiving—concert tickets, vouchers for limo
service, things like that—on eBay. You’ve tried talking about it, bringing the subject up one way or
another, but he doesn’t want to talk back. And when you say it directly, when you ask whether it’s right to
accept gifts from Forbes and convert them to money, he laughs. “Everyone does it,” he says.
This situation is different from most of those discussed so far for an important reason: you’re not directly
faced with an ethical dilemma; you’re not the one placing the ads or accepting the gifts. Still, you do work
with Chris, sometimes even sending over marketing data that he uses for his accounts. You’re a
third party, which in this situation means you’re not directly responsible for what’s going on but you’re
caught in the cross fire between Foreman and Forbes magazine.
There are infinite variations on this kind of predicament. The financier-fraudster Bernie Madoff asked his
secretary to cover up his affairs by answering his wife’s phone calls and saying he was in a meeting and
couldn’t be interrupted. In the student union of your campus, maybe the breakfast menu offers omelets
cooked with fresh eggs, but you work there and know the manager occasionally messes up the stocking
Saylor URL: http://www.saylor.org/books Saylor.org
292
order and so ends up selling omelets made from a preordered mix of egg-like chemicals. What do you do?
It can be a hard call and at least two questions arise on the way to making it:
1. You need to decide if something truly unacceptable is happening.
2. You’ve got to determine whether it’s any of your business.
If, finally, something unacceptable is happening and you should do something about it, you’re facing
a third-party obligation. This is an ethical responsibility to correct something you’re not actually doing.
Why Should I Get Involved? Ethics and Self-Interest
When confronted with a third-party obligation, employees may get involved for a number of reasons. One
is as a response to an ethical responsibility. Another: as an opportunity to benefit themselves.
Tattling, as any child knows, is revealing an ethical transgression involving others, and revealing it for
your own benefit. Take the case of assistant media buyer Chris Foreman and another assistant media
buyer who learns that Foreman is shortchanging the ad agency’s client for personal benefit. If you’re that
other assistant media buyer and you’re crafty, you may see not only an ethical lapse here but also your
own personal chance. Every senior media buyer has several assistants underneath, and when the time
comes for promotion, there’ll be space, presumably, for only one assistant to advance. Getting Foreman
out of the way may not be a bad career move.
It’s an extremely ambiguous ethical move, however. On one hand, there’s solid justification for getting the
truth known about Foreman. He’s clearly not fulfilling his professional obligations to the company.
However, if you turn him in because that’ll give you a leg up on the promotion ladder, you can hardly say
that ethical righteousness has driven your action. On the other side, this should also be noted: the fact
that you may benefit from revealing unethical behavior probably can’t justify keeping everyone in the
dark.
Typically, we think of ethical restrictions as painful, as obstacles you put between yourself and what you
really want. That’s not always the case, though; they don’t necessarily make you suffer, they may make
others suffer and serve your interests. When they do, you have weaponries ethics—that is, perfectly
reasonable moral dictates used to attack others and benefit yourself. Tattling, finally, is the use of
weaponries ethics; it’s doing the right thing for selfish reasons.
Saylor URL: http://www.saylor.org/books Saylor.org
293
Responding to a Third-Party Obligation: Reporting
Regardless of the motivation for responding to a third-party obligation, there are two broad paths the
response can take: reporting and whistle-blowing.
Reporting ethical transgressions means bringing them to light, but only within the organization. In most
situations, this route is the most direct way for third parties to balance their basic and immediate
obligations. Staying with the advertising scenario where you believe Foreman is essentially accepting
bribes from Forbes, you have an obligation not only to halt the bribery but also to protect the agency’s
interests. Obviously, a noisy public blowup about Foreman misspending a client’s money is going to
damage the advertising company’s business. Reporting—because it stays inside agency walls—promises to
rectify the bribery without causing larger publicity problems.
Bringing this into the real world, because reporting ethical problems does allow them to be addressed
without harming the agency, the Omnicom Code of Conduct includes this:
All reports of possible violations about which management becomes aware will be promptly
considered. We will not punish any employee or representative for making any report in good
faith.
[1]
It’s in Omnicom’s interest to get ethical dirty laundry washed in-house.
Up to here, the situation’s resolution has come easily. But there’s another, potentially complicating,
obligation to consider: the human link to Chris Foreman. Almost all organizations rely on and seek to
nurture bonds of shared responsibility and dependence between employees: in working life, when
someone’s sick or just having a bad day, the others have to pick up the slack. That nurturing explains why
anyone who’s entered a fast-food restaurant knows the workers aren’t “coworkers” but “teammates.” In
most organizations, some form of the camaraderie holds, and you can’t just break those bonds from one
moment to the next. That means if you’re working with Foreman and you know he’s doing wrong, you
may well feel an obligation to not report anything because you don’t want to cause him problems.
Reporting, the conclusion is, a coworker for ethical lapses is easy. But in the real world there are no
coworkers; there are only flesh and blood people.
Next, even if those human connections to others don’t move you, you also have obligations to yourself and
your own welfare to consider, and turning others in to company authorities can ultimately come back
Saylor URL: http://www.saylor.org/books Saylor.org
294
against you. By giving rise to distrust and possibly resentment among other colleagues who fear they may
be the next ones to get reported, you may be in essence isolating yourself in your own cubicle.
In the end, seeing what Foreman is doing and stretching ethical obligations through the situation, you
may find yourself torn between reporting him and not. There’s no automatic resolution to this dilemma,
only the attempt to weigh the obligations and get a sense of which outweigh the others.
Responding to a Third-Party Obligation: Whistle-Blowing
Whistle-blowing is bringing ethical transgressions to light publicly outside the organization. A recent case
involved one of the many advertising agencies gathered under the Omnicom umbrella, Leo Burnett. Two
employees—Vice President Greg Hamilton and Comptroller Michelle Casey—alleged, and a subsequent
federal investigation backed them up, that Leo Burnett was overbilling the government for their work on
the US Army’s “Army of One” recruiting campaign.
The agency was supposed to calculate its hourly rate with a formula dividing charges between the more
expensive work done directly in Leo Burnett’s offices and the less costly hourly labor performed by
subcontractors. What Leo Burnett did was simple: they billed subcontractor work at the higher in-house
rate. The accounting in these massive campaigns—TV, radio, and prints ads as well as sponsorships and
events—is so knotted that a virtual army of accountants is required to keep track of where all the money is
going. In that kind of numerical chaos, the agency could expect that switching a few hours from one
column to another deep inside the mountain of paperwork would go unnoticed by outside auditors. It did
go unnoticed—until Hamilton and Casey told the government what was going on.
Almost inevitably a lot of dust gets kicked up when employees turn on their employers noisily and
publicly. In this case, the US Justice Department lawyers rode in, and they probably wanted a scalp on
their wall: they have limited resources, limited time and money, and when they take something on they
want to win, and they want people to know about it. Back on the agency’s side, they’re going to defend
themselves, and that typically entails attacking their accusers, maybe labeling them disgruntled,
incompetent, or worse. In this case, there was also a tug-of-war over money. The agency obviously wanted
to keep as much as it could, the government wanted money back, and thanks to the False Claims Act,
Hamilton and Casey also demanded their share, which came to almost $3 million.
Saylor URL: http://www.saylor.org/books Saylor.org
295
The False Claims Act is a federal law designed to encourage whistle-blowing on private contractors who
are attempting to defraud the government. Whistle-blowers are entitled, under the law, to 30 percent of
the damages the government obtains. The incentive doesn’t apply to situations involving only private
companies, but even there whistle-blowers may encounter suspicions that ulterior motives—not a
dedication to doing the right thing—finally spurred their loud assertions about misdeeds.
Finally, with respect to the Leo Burnett fraud, the full details will never be known. Because the case never
went to trial, there was little public exhibition of evidence and testimony. To head the whole mess off, Leo
Burnett agreed to settle. In the words of a published report, “Leo Burnett denied any wrongdoing and said
in a statement that it agreed to the settlement ‘to avoid the distraction, burden and expense of
litigation.’”
[2]
Every case of whistle-blowing is different, but a few questions get to the heart of most instances:
What, exactly, is whistle-blowing?
What justifies whistle-blowing?
What weighs against whistle-blowing?
Can the whistle-blower expect protection?
Is whistle-blowing morally required?
What Is Whistle-Blowing?
Whistle-blowing is bringing an organization’s ethical transgressions to public light. Spilling the beans to
the family over dinner, however, doesn’t count; the truth must be exposed to an authority or institution
capable of taking action. In the case of the advertising agency, Hamilton and Casey took their information
to the federal government. They also could have selected one of the important industry publications—
say, Advertising Age magazine. Any information published there would draw attention from those
involved and give the client (in this case the US Army) the opportunity to act on behalf of its own
interests. The news media—a newspaper, a TV station—may have been a possibility in this case, given the
large scope of the fraud and the national interest underneath it. Other possibilities could be listed, but
what’s important is that the report of misdeeds goes to someone who can do something about it (or at
least provoke others to do something). Finally, whistle-blowing may be anonymous. However, in practical
terms, that’s frequently not a real option because government authorities, like private ones (editors of
Saylor URL: http://www.saylor.org/books Saylor.org
296
industry publications and so on), are far less likely to spend time tracking down the truth about
accusations when even the accuser is unwilling to stand behind them.
What Justifies Whistle-Blowing?
Whistle-blowing needs careful justification because it requires violating the obligation any employee has
to protect the interests of the employer. Here are five items that could be checked before publicly lighting
up an organization’s misdeeds from the inside. Importantly, the fact that the items may all be
checked doesn’t oblige action, but it does raise the possibility as ethically justifiable.
1. There is clear evidence of continuing wrongdoing by the organization or continuing effects of past
wrongdoing. In the business world, actions that are entirely locked in the past are the subject of history,
not ethics.
2. The wrongdoing must be serious. In the case of Leo Burnett, the case wouldn’t cross this threshold if only
one hour of labor had been attributed to the higher-cost office. But the threshold would be crossed if the
agency significantly overcharged many hours for years, bleeding the account of its resources and
ultimately damaging the army’s ability to recruit new, top-flight soldiers.
3. The organization’s established, internal channels for reporting and correcting problems have been
exhausted. Most organizations provide clear ways for employees to voice concerns internally. A
conversation with a supervisor is an obvious example. At larger organizations, sometimes an entire
internal department has been mounted to receive and act on the concerns of employees. Here’s the web
page of a typical example; it links to Wal-Mart’s internal department for
ethics:http://ethics.walmartstores.com/Statementofethics/RaiseAConcern.aspx. Whether, finally, there’s
a clear, formal route for internal reporting or not, employees have a responsibility to try to resolve
problems in ways that benefit—or do the least possible damage to—the organization, and therefore the
possibility of raising concerns internally needs to be explored fully. (As always, there are special cases. If,
for example, the CEO of a small advertising company is robbing its client’s money, there may be no
internal route to resolution, leaving external whistle-blowing as the only moral corrective. Also, though
whistle-blowing is defined as taking action outside the organization, the definition could be stretched to
include the act of bringing wrongdoing to light directly before high officials within an organization by
skipping over the normal chain of authority.)
Saylor URL: http://www.saylor.org/books Saylor.org
297
4. There’s unmistakable and convincing evidence of misconduct. The evidence must be unmistakable in the
sense that it clearly indicates wrongdoing; it can’t be that an innocent explanation seems as likely as a
guilty one. In the Leo Burnett accounting books, if it turns out that on one page all the internal hours are
in the external hour’s column and vice versa, that may be an attempt to defraud the government, or it may
just be that the data-entry guy came to work one morning hung over and ended up confusing the
numbers. Further, the evidence must also be compelling in the sense that there’s enough of it for a
reasonable person to conclude the misdeeds are actually occurring. So even if you’re certain numbers are
being entered incorrectly intentionally, but it turns out that the difference—the amount of extra money
Leo Burnett is making—is trivial, then it’s going to be hard to justify creating a stink. It may be, for
example, that someone in the accounting department is making small adjustments in order to balance
errors found elsewhere in the giant balance sheet.
5. There’s reason to believe that whistle-blowing will resolve the problem. In the case of Leo Burnett—or
any business that’s overcharging a client—you can be pretty sure that bringing the fraud to light will spark
action, at least by the defrauded client. On the other hand, if you’re in the production department of the
advertising agency (in other words, you’re actually filming commercials) and you regularly get shipped
down to Mexico to shoot campaigns because everything’s cheaper down there and you learn that some of
the extras in the commercial’s background are working longer hours than local regulations allow, you
might reasonably figure that you can talk all you want in public, but it’s not going to make any difference.
What Weighs against Whistle-Blowing?
The three heaviest arguments against whistle-blowing are
1. legal requirements for confidentiality,
2. prudential concern for one’s career and personal welfare,
3. an employee’s sense of loyalty to the organization.
A legal requirement for confidentiality may weigh against whistle-blowing by binding employees to not
share a company’s internal information. The requirement traces back to a section contained in many work
contracts. Called a confidentiality clause, here’s a basic version:
Employees may have access to records and other information about customers and other
employees, including proprietary information, trade secrets, and intellectual property to which
Saylor URL: http://www.saylor.org/books Saylor.org
298
the Company holds rights. Employee agrees to keep all such information strictly confidential and
to refrain from discussing this information with anyone else without proper authority.
While this is most directly aimed at protecting consumer information (say, credit card numbers) and
company trade secrets (Coke’s secret formula), it may also be read as safeguarding the kind of information
a whistle-blower wants to make public. In the case of the Leo Burnett agency, what Vice President
Hamilton and Comptroller Casey told the government did, in fact, involve “records and other information
about customers.”
The second major argument against whistle-blowing, self-interest operates in both the professional and
personal sense. Turning against the company may be the right thing to do, but it’s almost inevitably a
painful thing to do, at least according to a survey published in the New York Times. What condition, the
study sought to determine, do whistle-blowers find themselves in a few years afterward?
One hundred percent who worked for private business were fired.
Twenty percent could still not find work at the time this survey was taken.
Seventeen percent lost their homes.
Fifty-four percent had been harassed by peers at work.
Fifteen percent viewed their subsequent divorce as a result of whistle-blowing.
Eighty percent suffered physical deterioration.
Eighty-six percent reported significant emotional stress (depression, anxiety).
Ten percent reported having attempted suicide.
[3]
It doesn’t sound good. Of course every case is different, and if you look on the other side of these numbers,
they leave room for the possibility that at least some people do the right thing and get on with their lives
just fine. Still, there are no guarantees and ethics isn’t only about duties to others and the world outside,
all of us have equal duties to ourselves: duties to maximize our potential, protect those nearest to us, and
defend our own welfare.
Finally, the values and reasons supporting loyalty as a reason for not blowing the whistle will be
considered in their own section further on.
Saylor URL: http://www.saylor.org/books Saylor.org
299
Protecting the Whistle-Blower
As the survey data about whistle-blowers reveal, there’s not a lot of protection for them. That isn’t for a
lack of trying, however. At both the state and federal levels, reams of laws have been enacted to protect
those who expose wrongdoing organizations. Perhaps the most notable is the Sarbanes-Oxley Act. Passed
in 2002 by the federal government as a response to a series of disastrous accounting frauds at large
companies, Sarbanes-Oxley is a massive piece of legislation intervening in many parts of the business
world, and especially in aspects connecting to an organization’s finances and transparency.
Specifically with respect to whistle-blowers, the law attempts to encourage it by protecting whistle-
blowers at publicly traded companies that report activities to government agencies. (The act doesn’t apply
to privately held firms dealing exclusively with other private firms.) Employers are prohibited from taking
retaliatory action (firing, demoting, harassing), and whistle-blowers are provided clear avenues for
lawsuits should such retaliation occur. Here’s the legislative language: “In order to establish a case under
Sarbanes-Oxley, an employee must prove that she (1) reasonably believed that her employer was breaking
the law; (2) engaged in whistle blowing activity as defined by the statute; (3) suffered an adverse
employment action; and (4) that there was a causal connection between the whistle blowing activity and
the adverse employment action.”
[4]
The problem is that last clause. Everyone who’s ever had a job knows that mistakes happen every day.
Deadlines are missed, projects contain errors, and goals aren’t met. Bosses who have it in for you aren’t
going to have many difficulties converting those mishaps into reasons for denying wage hikes and even
outright firing. In your heart you may know—everyone may know—that you’re suffering retaliation for
reporting the company, but proving it can be difficult.
The bottom line is—and as the previous survey shows—if you publicly divulge information seriously
damaging your employer, you’re probably going to be gone. And even if you find some protection in one or
another law, it’s difficult to imagine that your career is going anywhere inside the company. Worse still,
prospective new employers are, very likely, going to hesitate before extending a job to someone who has
already caused serious problems for a former employer. Taken all together, the bleak reality is that in
most cases whistle-blowers can’t count on getting back the life they had before they publicly disclosed
their organization’s misdeeds.
Saylor URL: http://www.saylor.org/books Saylor.org
300
Is Whistle-Blowing Morally Required?
Given the abundant reasons—financial, professional, emotional, and ethical—against whistle-blowing, are
there any cases where a moral argument can be formed to require publicizing an organization’s unethical
actions? Probably, but they’re few. Here’s a possible rule of thumb: whistle-blowing is required when the
act can prevent harm to others in ways that are serious and go beyond the bottom line. If someone is
getting ripped off, the reasoning goes—if an advertising company is overcharging its clients—whistle-
blowing may be justified, but not required. All that’s at stake is money. On the other hand, if a nuclear
power plant is being constructed near a residential area and you learn the contracting company you work
for is using cheap cement to boost the profit margin, it seems as though you have little choice—the weight
of elementary personal integrity in the face of potentially lethal wrongdoing probably requires personal
sacrifice.
What about the hypothetical Chris Foreman situation? You’re working with him and have acquired
sufficient evidence to know that he’s selling out his client by sending their ad dollars to Forbes magazine
in exchange for Highlander nights. You’ve reported the matter internally and received no response. Do
you go public? You’d certainly be justified in taking the story to Ad Age magazine. Just running down the
list of conditions justifying whistle-blowing, they all get checked:
1. There’s clear evidence of continuing wrongdoing by the organization.
2. The wrongdoing is serious (at least in the world of advertising).
3. The organization’s established, internal channels for reporting and correcting problems have been
exhausted.
4. There’s unmistakable and convincing evidence of misconduct.
5. There’s reason to believe that whistle-blowing will resolve the problem.
The question remains, however, whether the issue affects life beyond business and the bottom line. It
doesn’t appear to. At bottom, this is the case of a client—AT&T mobile phone services—getting poor
service from an Omnicom company. That should be corrected, and presumably market forces will correct
it sooner or later, but whether they do or don’t, there’s no requirement here to seriously jeopardize your
own financial, professional, and emotional welfare.
What about the case of Leo Burnett? Again here a client is getting a raw deal, but there’s an important
difference: this is the army, not a telephone company. If it’s true that the recruiting budget is being
Saylor URL: http://www.saylor.org/books Saylor.org
301
seriously hindered, the situation may be crossing the line from justified whistle-blowing to justified and
required. If it does cross that line, the reason will be that protecting your own financial and emotional
welfare is trumped by the responsibility to help soldiers in war resist mortal danger as totally as possible.
The fact that the army isn’t getting the best recruits possible doesn’t just affect people in the pocketbook,
it threatens those on a live battlefield. Faced with that reality, it will be hard for individuals including
Burnett employees Hamilton and Casey to keep quiet just because they don’t want to lose their jobs.
K E Y T A K E A W A Y S
Third-party obligations arise when you know of wrongdoing by an organization or by individuals within it,
and though you aren’t directly at fault, you’re in a position to correct the problem.
In some cases, third-party obligations can be opportunities to sabotage a fellow worker for personal gain.
Responses to third-party obligations include reporting the problem inside the organization for correction
and publicizing the problem, also known as whistle-blowing.
Because whistle-blowing harms the organization, employees must take into account their responsibility to
defend the organization’s interests before publicly decrying the wrongdoing.
In some cases whistle-blowing is not justified, in some it is, and in some extreme cases, whistle-blowing
may be ethically required.
In practical terms, whistle-blowing can be devastating for the employee.
R E V I E W Q U E S T I O N S
1. Create a hypothetical third-party obligation involving an employee of a major company.
2. What does it mean to deploy weaponries ethics?
3. What questions can be asked to help determine whether whistle-blowing is justified?
4. What questions can be asked to help determine whether whistle-blowing is ethically required?
5. Why might an employee hesitate before whistle-blowing?
6. The Sarbanes-Oxley Act tries to protect whistle-blowers. Why is it not very effective?
[1] “Code of Conduct,” Omnicom Group, last updated October 16, 2008, accessed May 19,
2011, http://www.omnicomgroup.com/corporategovernance/codeofconduct.
Saylor URL: http://www.saylor.org/books Saylor.org
302
[2] Mehhen Streit, “Leo Burnett Settles Suit for $15.5 Million,” Chicago Business, January 6, 2009, accessed May
19, 2011, http://www.chicagobusiness.com/cgi-bin/news.pl?id=32498.
[3] Survey cited in Manuel Velasquez, Business Ethics: Concepts and Cases, 6th ed. (Upper Saddle River, NJ:
Pearson, 2006), 378.
[4] Welch v. Cardinal Bankshares Corp., 2003-SOX-15 at 35 (ALJ 2004).
Saylor URL: http://www.saylor.org/books Saylor.org
303
7.3 Company Loyalty
L E A R N I N G O B J E C T I V E S
1. Define company loyalty.
2. Elaborate three degrees of company loyalty.
Two Kinds of Loyalty
There is narrow company loyalty and broad company loyalty. The narrow definition pertains to
employment: the loyal employee sticks with the company instead of looking for work elsewhere, especially
during economic booms when jobs are plentiful and moving on is easy.
This kind of loyalty, however, is in trouble according to an article from the Harvard Business School: “The
very nature of the relationship between employers and employees has undergone a fundamental shift:
Today, workers not only don’t expect to work for decades on end for the same company, but they don’t
want to. They are largely disillusioned with the very idea of loyalty to organizations.”
[1]
Part of the reason for the shift—and part of the reason employees don’t stay at companies for decades—is
that many employers don’t hesitate to fire their workers at the drop of the hat when it serves the
company’s interest. On the other side, according to the article, it’s also true that today’s workers don’t
hesitate to move on to a new job when a better one, or maybe just a different one, comes along. Regardless
of who went first, the fact is company loyalty—whether it’s going from the company to the worker or the
worker to the company—isn’t what (we are told) it once was.
The broad definition of company loyalty goes beyond employment questions and measures an employee’s
willingness to sacrifice income, leisure time, personal relationships, family responsibilities, and general
life aspirations in the name of the organization. To create this dynamic of sacrifice, two distinct kinds of
relationships with the organization are required:
1. Attachment to the organization that is non-instrumental. This means the attachment isn’t maintained
only because it serves the employee’s concrete interests, such as the need for a salary to pay the rent and
grocery bills.
2. A deposited value in the organization that goes beyond any individual and their attachment; the
organization’s value continues even without those who currently feel it.
Saylor URL: http://www.saylor.org/books Saylor.org
304
Probably, there’s not a lot of this kind of deep loyalty in the advertising field. Agencies are constantly
stalking new clients, even trying to steal them from others. For their part, most clients are constantly
looking for better deals and ways to refresh their image, and they are usually open to proposals from new
firms interested in handling their communication. More, companies that employ advertising agencies
constantly “put their account up for review,” which means the current account holder has to compete with
new entrants just to maintain the business. There are exceptions, of course, but for the most part
advertising agencies are constantly clinging to the business they have, seeking new opportunities, and
always on the lookout for fast money. In that kind of cutthroat environment—one where it’s your job to
sing the praises of Burger King one day and McDonald’s the next—it’s going to be difficult for workers to
feel as though they should (or even can) be true to their current employer.
Other kinds of organizations seem more likely to instill feelings of loyalty. A religious hub—a church, a
synagogue, a mosque—is one obvious example. Most priests are attached to, and deeply concerned by, the
welfare of their church; they serve their institution and aren’t working there for the money (which
probably isn’t great). Further, most also believe their institution has value beyond them: the importance
was there before they arrived (or were even born) and will continue after they leave. Taken together, these
elements create space for true employee loyalty to the organization. Something similar—the existence of a
space for labor that’s not about money and similar rewards—could be found surrounding many who work
for Greenpeace, Doctors Without Borders, political parties, the CIA, the United Nations.
Other professions open on both sides of the line—that is, there’s ample space for an instrumental
relationship (I keep this job because it makes me happy) and one based on broad loyalty. Some medical
doctors are in it for the money but others for the care, for the principle that bringing health to others is a
good cause. Law is another example. Ambulance-chasing lawyers just want payoffs, but some judges
believe in the law as something larger than themselves and a basic force for civilization that’s worth
serving. Moving down to street level, there are police officers who just like a steady paycheck and others in
the field to serve and protect: they see their work as improving the lives of others and the general
community.
Saylor URL: http://www.saylor.org/books Saylor.org
305
Three Degrees of Loyalty
Within a dynamic of employee loyalty, there are three levels of dedication: obedience loyalty, balanced
loyalty, and free agency.
Obedience loyalty, which is an extreme case, works from the idea that the organization is worthy and the
employee is comparatively worthless or only worthwhile to the extent he or she serves the organization.
This extreme will be reached only rarely, but there are glimmers of it in some professional activities. One
quick way to identify these kinds of labors is to check whether the truly dedicated are willing to sacrifice
even their lives for the cause their organization embodies. The armed forces come to mind here. Some
political organizations command this devotion, especially in revolutionary times. Some workers’ devotion
to their labor union has been sufficient to put their lives in danger. The exploring scientist Charles Darwin
believed in accumulating knowledge and put his life at risk in the field as he tracked rare species and
ecosystems.
Not so dramatic or extreme, some professions and organizations can suck the emotional life out of
employees. Or they may take vast chunks of the employee’s time. Undercover police work exemplifies by
requiring a loyalty reflected as self-sacrifice to an extent few of us would contemplate. April Leatherwood,
for instance, went undercover in Memphis for an entire year. Almost entirely separated from family and
friends, she lived on the street, wore the same clothes every day, went without brushing her teeth, and
rarely bathed. That was an ugly year of her life, one sacrificed for the job.
[2]
Balanced loyalty is a situation where both the employee and the organization recognize in each other an
independent value. In this case, the employee can be expected to make sacrifices—possibly even do things
he or she would normally consider unethical—in the name of serving the larger organization. One example
would be a lawyer working in a public defender’s office, one who believes that the system of law and the
rules of its enforcement are noble and should be respected to some important extent that is independent
of the particular lawyer’s welfare and beliefs. The loyalty can be reflected in a number of ways. First, it’s
simply the case that most public defender positions don’t pay as well as similar posts in private firms.
Pushing further, the public defender may be asked to represent and defend a client she knows
(or strongly suspects) is guilty. In this case, presumably, she’s being asked to do something she wouldn’t
do in her day-to-day life—that is, serve the interests of a guilty man. More, presenting a full-blown legal
Saylor URL: http://www.saylor.org/books Saylor.org
306
case for the defendant’s innocence would essentially be lying and, again, something the lawyer might not
typically do.
At the same time, this lawyer probably won’t be sacrificing everything; she’ll recognize that her life and
aspirations have value also, and there may come a point where she decides the sacrifices demanded by the
job are too great to bear. Perhaps she’s just had a child and needs to up her income, or, maybe a man she
helped set free has committed a gruesome crime. However the situation might be, when the lawyer leaves
the office of the public defender for a higher paying job at a large private firm, she has demonstrated a
balanced sense of loyalty. She’s willing to sacrifice in the name of a larger organization she respects. But
only up to a point.
Other demonstrations of balanced loyalty to the organization could include
buying the company’s products (though they aren’t the personal preference),
evangelizing in public life (telling your friends how great the company or its products are),
voting for the political candidate the company affirms will best serve its interests,
moving for the company.
Free agency is the extreme on the bottom end: the absence of loyalty. Some theorists propose that this
should be the default state for most employees for this reason: it’s ultimately impossible to be loyal to a
typical company because profit-making institutions just aren’t the kinds of things that can properly
demand or receive any loyalty. The entire idea of loyalty, the argument goes, only exists in a reality where
individuals stand by others to some extent without conditions (example: parents who love each other and
their children unconditionally). Money-making businesses, on the other hand, are incapable of that kind
of unconditional fidelity. On the contrary, the only desire most private enterprises know is the one to
serve its own interests by making more profits. If that’s right—if companies have no loyalty to give—then
its employees can’t enter into that kind of relationship. Instead, in the business world at least, you and I
are forced to pursue our own interests—a higher salary or whatever—just as the larger company pursues
its own.
Translating this into the working world, the absence of company loyalty is the idea that workers find value
in their organization only because it serves their own interests. Of course it’s impossible to know the souls
of others, or exactly what their deepest values are, but there might be a hint of this free-agent loyalty in
the Leo Burnett case. Two high-level and highly paid workers served the company well—and were
Saylor URL: http://www.saylor.org/books Saylor.org
307
compensated well—until they turned whistle-blower against the firm. When vice president Hamilton and
comptroller Casey alleged that Leo Burnett was overbilling the government for their work for the US
Army, they weren’t just doing the right thing, they were doing a lucrative thing for themselves since the
False Claims Act promised 30 percent of damages the government obtained. If the money is
the reason they turned on the agency, they exemplify free-agent loyalty. They worked hard for the
organization because the pay was good, but the moment they saw the chance to get even more money by
turning against it, they jumped. At bottom, that means, their loyalty is only to themselves.
K E Y T A K E A W A Y S
Company loyalty defined narrowly concerns employees sticking with the organization instead of looking
for work elsewhere.
Company loyalty defined broadly emerges from the idea that the organization possesses nobility that’s
worth serving, even if employees don’t benefit personally from the contribution.
The three degrees of company loyalty are obedience loyalty (the worker exists to serve the organization’s
interests), balanced loyalty (workers and organizations share interests), and free agency (the organization
exists to serve the worker’s interests).
R E V I E W Q U E S T I O N S
1. Name an organization that might inspire obedience loyalty. Why is obedience inspired? What does the
loyalty look
like?
2. Name an organization that might inspire balanced loyalty. Why is it inspired? What does the loyalty look
like?
3. Name an organization that might inspire an attitude of free agency. Why is it inspired? What does the free
agency look like?
4. Take a career you’re (considering) pursuing. On the scale from obedience loyalty to free agency, where do
you imagine most employees in that line of work are located? Why?
5. [1] Lauren Keller Johnson, “Rethinking Company Loyalty,” Harvard Business School Working Knowledge,
September 19, 2005, accessed May 19, 2011,http://hbswk.hbs.edu/item/5000.html.
Saylor URL: http://www.saylor.org/books Saylor.org
308
6. [2] Kristina Goetz, “A Year of Living Dangerously Takes a Toll on Undercover Memphis
Officer,” Commercial Appeal, August 30, 2009, accessed May 19,
2011,http://www.commercialappeal.com/news/2009/aug/30/year-of-living-dangerously-takes-its-toll.
Saylor URL: http://www.saylor.org/books Saylor.org
309
7.4 Stress, Sex, Status, and Slacking: What Are the Ethics of Making It through the
Typical Workday?
L E A R N I N G O B J E C T I V E
1. Consider ethical questions attached to several issues commonly arising during the workday.
Bringing the Office Home: High-Stress Work
No book can cover the ethics of everything happening on every job, but four issues arising in most
workplaces sooner or later are stress, sex, status, and slacking off. Starting with stress, what happens if
the workday doesn’t end when the workday ends? For those enduring—or choosing—high-stress jobs,
there’s no five o’clock whistle; even if they’re shopping or watching a baseball game, the job’s effects hum
in the background. One simple example—and also one all of us see on the street every day—come from an
article in the USA Today. It recounts an academic journal’s finding that overweight people pack on still
more pounds when their work continually produces serious anxiety. If you’re overweight, the study shows,
and you’re stressed in the office, there’s a high likelihood your stomach or your thighs are going to keep
growing.
[1]
One of the central arguments Aristotle made in ancient Greece was that doing right isn’t the highest goal
of ethics. The careful understanding of our values and purposes centers on, ultimately, living a good life.
Doing the right thing is part of that goodness, but happiness is there too, so one of the issues stress at
work brings forward is this: how is my decision to accept stressful employment affecting my happiness
and the happiness of those around me? Here are some more specific questions that could be asked on the
way to pinning down the ethics of stress:
What positive returns, exactly, am I getting from my stressful job?
Are there prospects for reduced stress in the future?
What are the costs of the stress? Is it affecting my weight, my leisure time, my friends, my marriage and
family?
Who is affected? Is anyone else suffering stress because I’m stressed out? Are people suffering from my
stress in other ways?
Saylor URL: http://www.saylor.org/books Saylor.org
310
Stress at work isn’t only a psychological problem or a medical one—it’s also laced with questions about
value. It’s the most fundamental ethics: what’s worth doing and what isn’t? It’s impossible to know, of
course, exactly where the line should be drawn and when stress is worth accepting. Any answer that will
be justifiable, however, will have to begin with a clear understanding of exactly what the costs and benefits
are.
Office Romance
Hooking up at work is one eternal way of making the time fly, but what’s going on in today’s offices is
somewhat different from the past. An article from the Wall Street Journal indicates how the meaning of
sex in the office is shifting: “Marriage is a priority for most Americans—more than 90 percent of American
adults eventually marry—but these days it may not happen, as it so often did before, in the immediate
post-high-school or post-college years. The truth is that we’re marrying later.”
[2]
When marriages were typically celebrated at the end of the schooling years, work-related romances went
hand in hand with infidelities. In that environment, questions arose about the organization’s role in any
affair that may be occurring during company time.
The entire context of discussion changes, however, when a large number of people flowing into the
workforce are unmarried and are looking to wed. Inevitably, the office is going to become a mating
ground—people pass eight hours a day there—and one of the questions young workers are going to start
asking when they think about jobs and careers is, will I be able to meet someone if I get into one or
another line of work?
The aspiration to connect introduces a thorny dimension to employment decisions made by young people
(and some older ones too). If you’re a guy working on a heavy construction job, the pay may be good, but
there’s probably not going to be a woman in sight. On the other hand, doing the coursework to earn
paralegal certification may be a headache, but getting into the field isn’t a bad way to meet successful and
interesting women.
What’s going on here is that as society changes—as marriage and family life get pushed back into time that
used to be reserved for work—the factors shaping the way we think about which jobs are more desirable
than others simply on a day-to-day basis are changing, and part of your responsibility to yourself is to
keep track of what you really want from your 9 to 5 time. One of the standard moral obligations we share
Saylor URL: http://www.saylor.org/books Saylor.org
311
is the responsibility to be sincere not only with others but also with ourselves about important decisions
touching the business part of life. And if romance is part of what you want from work, then the
possibilities have to be taken into account just like salary and other benefits.
Status
Chris Foreman, the media buyer who enjoyed yacht evenings on the Highlander and tickets to all kinds of
major events, received a piddling salary. He thought about changing jobs but decided not to. One reason
was that all the entertainment added a lot of indirect money to his income. There was another reason
too—the special, VIP privileges he constantly received from his benefactors: “There’s a feeling of
superiority. When you pass by a line at a screening because you’re on the list you do get that ego boost.
You’re thinking, Ha, ha! I’m not a chump.”
[3]
Status on the job makes a difference in quotidian working life, but it’s hard to quantify; it’s not like a
salary, which is an objective number and can be directly compared with others on a pay scale. How much
is it worth, the question is, to wing by others forced to stand in line?
Knotting matters further, defining exactly what counts as status isn’t easy, and any answer is going to
move and slide depending on who you talk to. For some, being a lawyer is impressive and lucrative, for
others it’s dirty and, well, lucrative. For some, being a test pilot is exciting and respectable, for others it’s
scary and weird. Many people seated in first class on an airplane rush to get on early so that all the
economy travelers get to see them as they file past. Some of those people headed toward the back of the
plane see the first-class passengers as legitimate power elites, but others get the feeling that most of them
are really chumps: the reason they’re in first class is because they used frequent-flyer miles to bump up,
and the reason they have a lot of those is because their bosses always make them take the trip to see
clients instead of bothering to do it themselves.
More generally, in the world of New York City media buyers, status seems linked with superiority, with
being visibly more privileged than those forced to stand in lines. For others, however, status will be
quieter. The teacher, the nurse—they find status not as superiority but as social importance.
Conclusion. Status means different things to different people, but anyone looking to get it from a job
should ask how much is really there, and how much is it going to help me get out of bed in the morning
and want to go to work?
Saylor URL: http://www.saylor.org/books Saylor.org
312
Slacker’s Paradise
Typical ways of getting through the day include throwing yourself into your work (frequently with the
hope of a promotion or pay raise), firing up an office romance, and enjoying the status a post allows.
Another way of making it from 9 to 5 is by trying to avoid doing work, by working to do as little as
possible. This is the slacker reality, and there are two routes into it: Personal slackers adopt the attitude
for their own private reasons. The context slacker is dedicated to not working because the incentive
system of the labor contract—or some other external factor—encourages slacking off.
Beginning with the personal slacker, the attitude starts with a decision: You take a typical job and make it
your project to expend as little effort as possible. The reasons for adopting this stance depend on the
person. Maybe there’s a passive-aggressive element, some personal frustration with life or perhaps a
somewhat idealistic attempt to make a statement. In any case, the motives behind this kind of behavior
should be pursued in a psychology course. Here all that matters is that for one reason or another the
private decision gets made to get through the day by working to not work.
The second slacker pathway starts with a context. Here’s an example from an online discussion board:
“Haha I worked in a union job and they were there to punch in…take a lunch…take 2 15min breaks…and
punch out. They had n0 incentive to work hard because they would get a 0 dollar raise.”
[4]
The key here is the incentive, the idea that working hard doesn’t benefit the worker because labor
agreements are so protective and constricting that, on one side, it’s almost impossible to fire a worker, and
on the other, it’s nearly impossible to reward one for superior performance. That means there are islands
in the general economy where the traditional rule regarding performance and reward—the rule that doing
well gets you ahead—doesn’t apply very well.
One of the curiosities of these islands is that it’s not right to conclude that there’s no incentive to do
anything. Actually, there is an incentive system in place even when, as the discussion board poster writes
it, “hard work gets a 0 dollar raise.” In this case, the incentive is negative. If union rules (or whatever rules
happen to be in effect) mean workers can’t compete against each other with the best performer winning a
better post, the workers can still compete. It’s just that since wages are fixed, the competition turns
negative: the most successful worker is the one who manages to do the least work. It makes perfect sense:
if you do less work than anyone else, and you’re paid the same amount as everyone else, you have, in fact,
found a way to win. You get the highest salary; you’re the one paid most for the least work.
Saylor URL: http://www.saylor.org/books Saylor.org
313
Is slacking ethically acceptable? Whether someone is a contextual or personal slacker, when success is
defined not as how well you do but how little you do, two basic questions arise:
1. Is someone or some organization being cheated?
2. Is there something fundamentally unethical about being a slacker?
The first question applied to those trapped—willingly or not—in contextual slackerism leads quickly to the
conclusion that the organization bears at least as great a burden of responsibility as the employee for
deficient work motivation. Applied to the personal slacker, the question about whether an employer was
cheated becomes more difficult. There does seem to be an element of reneging on implicit or explicit
pledges to fulfill responsibilities here, but it’s also true that most employment contracts in the United
States (though not so much in Europe where this question would require more prolonged consideration)
leave the organization broad latitude for dismissing workers whose performance is inadequate.
Next, is there something fundamentally unethical about slacking off? Most basic ethical theories are going
to return some form of a yes verdict. From a utilitarian perspective—one trying to maximize the common
good and happiness—it seems like problems are going to arise in most workplaces when coworkers are
forced to pick up assignments the slacker was supposed to complete or could have completed easily with
just a bit more effort. Similarly, basic ethics of duties include the one we all have to maximize our own
potential and abilities, and rigorously avoiding work seems, in most cases, to run against that aspiration.
Probably, a satisfying ethical defense of the slacker lifestyle would need to be founded on a personal
project going well beyond the limited economic world. Slacking off, in other words, would need to be part
of someone’s life ambition, and therefore its questions belong to general ethics, not the more limited field
of economic values treated here.
K E Y T A K E A W A Y S
Stress at work invites ethical considerations of workers’ obligations to their own happiness.
Office romance may broaden the range of values applying to career choices.
Status deriving from one’s work can be an important compensation, but it is difficult to quantify.
Slacking off—working to not work—may result from an employee’s work environment or it may be a
personal choice.
Saylor URL: http://www.saylor.org/books Saylor.org
314
R E V I E W Q U E S T I O N S
1. What are some of the ways stress at work can cause unhappiness in life?
2. Why the office is an important scene of romance in today’s world?
3. What do you imagine the rewards of status to be?
4. What kind of work contract would encourage slackerism?
5.
6. [1] Nanci Hellmich, “Study: Overweight People Gain More When Stressed by Work,” USA Today, July 8,
2009, accessed May 19, 2011,http://www.usatoday.com/news/health/weightloss/2009-07-08-obesity-
stress_N.htm.
7. [2] Christine Whelen, “Older but Wiser,” The Wall Street Journal, November 3, 2006.
8. [3] Sarah Bernard, “Let Them Eat Crab Cakes,” New York, accessed May 19,
2011,http://nymag.com/nymetro/news/media/features/2472.
9. [4] Eazy E, “IS it me or are most Union workers lazy?,” Yahoo! Answers, accessed May 19,
2011, http://answers.yahoo.com/question/index?qid=20081008004353AAn1iL7.
Saylor URL: http://www.saylor.org/books Saylor.org
315
7.5 Case Studies
Payola and the iPhone App
The word payola traces back to rock and roll’s early days, back when the only large-scale way new acts
could get their name and music out was on the radio. Deejays in the 1960s controlled their own playlists
much more than today, so a band could drive into town, play a few concerts, and pay off a few deejays to
get their songs into the rotation. When they rolled out toward the next stop, they left behind the
impression that they were the next big thing.
It’s not illegal for a deejay, radio station, or anyone at all to accept money in exchange for playing
someone’s music, but US law does make pay for play illegal if the sponsorship isn’t openly divulged, if the
song isn’t treated, in other words, as a commercial.
Today’s media world provides almost infinite ways for musicians, video commentators, moviemakers, and
iPhone app developers to get word out about what they’re doing. Anyone can post a video on YouTube or
give away software on a web page. Payola is still out there, though. Wired magazine ran a story about it in
the world of iPhone apps.
It works like this. You invent an iPhone app but can’t get anyone to notice. What do you do? One
possibility is offer money to one of the well-known iPhone app review sites in exchange for a review of
your creation. That gets the word out pretty well, so developers are starting to pay up. This modern payola
scheme is enraging the iPhone community, however. Jason Snell, who works for Apple’s own app-review
Imag
e rem
oved
due
to c
opyr
ight
issue
s.
Saylor URL: http://www.saylor.org/books Saylor.org
316
website complains, “Readers need to know that true editorial reviews are fair, and aren’t the product of
any quid pro quo involving money or any other favors.”
[1]
Michael Vallez, owner of the app-review site Crazy Mike’s Apps, disagrees. He charges for reviews without
disclosing that to his readers, but he doesn’t guarantee a positive report. If he thinks the app isn’t worth
buying, he sends the money back and cancels the review.
The Wired article concludes with an opinion from Kenneth Pybus, a professor of journalism and mass
communication: “Undisclosed paid reviews are indisputably unethical because they manipulate the
public. That’s an easy call to say it’s ethically wrong because that is a disservice to readers. It ought to be
information that applies to readers and not information that advances you financially.”
Q U E S T I O N S
1. Professor Pybus believes there’s a conflict of interest operating when Vallez accepts money to write
reviews for his website Crazy Mike’s Apps. What, exactly, is the conflict?
2. Vallez says that his actions do not cause a conflict of interest, only the appearance of a conflict.
o What’s the difference between a conflict of interest and the appearance of a conflict of interest?
o How could Vallez argue that in his case there’s only an appearance, and, on close inspection, there
really is no conflict here?
3. Three standard strategies for alleviating ethical concerns surrounding conflicts of interest are
o transparency,
o recusal,
o organizational codes.
How could each of these strategies be applied to the conflict-of-interest issue at Crazy Mike’s
Apps?
4. You develop an iPhone app and you pay Vallez to review it. He tries the app, likes it, and writes up
a positive paragraph.
o Make the case to defend the payment as an ethically acceptable gift. Are there limits to how much
you could give before it would shift from a gift to a bribe? If there is a limit, how was the number
chosen?
Saylor URL: http://www.saylor.org/books Saylor.org
317
o Vallez says that if he doesn’t like an app he returns the money and refuses to review it. Does this
fact interfere with the possibility of justifying the payments as a standard, business-type gift?
5. Old style payola—paying to get a rock band on the airwaves isn’t dead. According to a story from
ABC News, the practice is alive and well; the only difference is that it’s no longer the deejays who
get the cash, it’s high-level executives because they’re the ones who set today’s playlists. Here’s a
comment from Foo Fighters drummer Taylor Hawkins: “I think back in the ’70s they used to pay
people with hookers and cocaine, and now they’re just doing it with straight-up money. So they
can all go out and buy their own hookers and cocaine.”
[2]
There’s a difference in the business world between providing entertainment and giving gifts. What
is the distinction?
o Why might entertainment be considered less ethically objectionable than gifts?
o Leaving aside moral concerns about hookers and drugs, ethically, is there a difference between a
rock group’s manager inviting radio executives out on a hooker and cocaine evening on one side
and just sending those cash on the other? If there’s a difference, what is it? If not, why not?
The Decorator’s Kickback
On a message board, Ms. G. C. from Miami writes,
Here’s the problem: an interior decorators bid is broken down into two parts-(A) the decorator’s
services and (B) the cost of labor and supplies. Most customers think (B) is a fixed cost-they forget
Imag
e rem
oved
due
to c
opyr
ight
issue
s.
Saylor URL: http://www.saylor.org/books Saylor.org
318
it’s not the decorator’s fault if cabinetmakers charge an arm and a leg. So, where do customers
look the closest when they’re comparing costs? That’s right, (A)-the decorator’s fee.
Well, decorators are creative people and for years they’ve been doing some very creative bidding.
They’ve been low balling (A) and padding (B), expecting the laborers to kick back a percentage of
their inflated fees to the decorator. Surprised? Everyone’s doing it. Everyone, that is, except me.
It’s deceptive. And as a Christian, I think it’s just plain wrong.
The customer’s final cost is about the same either way you cut it, so most decorators don’t feel
they’re doing anything wrong. Are they right?
Needless to say, “blowing the whistle” on such a widespread and accepted practice would only
damage my professional reputation.
[3]
Q U E S T I O N S
1. Mrs. G. C. confronts a third-party obligation. What is it?
2. Ethics can be weaponries—that is, used in your personal interest. Show how this could be the case here.
Does the fact that she would benefit by getting these kickbacks eliminated somehow make her position
less morally respectable? Why or why not?
3. Typically, according to Mrs. G. C, a client contracts an interior decorator. Later that decorator hires a
laborer, and the laborer gives the designer a kickback. There’s a conflict of interest here, what is it? What
is the ethical case against this kickback scheme?
4. Consequence theories of ethics represent the point of view that acts themselves are not good or
bad; all that matters are the consequences. Therefore, lying isn’t bad if it happens that a fleeing
criminal is asking you which way is the best escape route, and you point him down the street
leading to the police station. Duty theorists, by contrast, believe that certain acts including lying
and stealing are wrong regardless of the context and consequences.
o Do you suppose Mrs. G. C. adheres to a consequence ethics or a duty ethics? Why?
o Could you use the idea of consequence ethics to try to convince her to simply join the crowd and
do what everyone else is doing? What would that case look like?
5. If you wanted to put an end to this pervasive kickback practice in the interior decorating world
and only had time to present one argument, which of the following would you choose?
Saylor URL: http://www.saylor.org/books Saylor.org
319
o The practice should be stopped because it involves unethical kickbacks.
o It should be stopped because it’s dishonest in the sense that consumers are misled.
o It should be stopped because the straight shooter is getting the shaft.
Why did you choose that argument and how could it be elaborated more fully?
6. Imagine that Mrs. G. C. from Miami reveals her name and makes a whistle-blowing cause out of
her unhappiness with the standard practice in her profession.
o What kind of reprisals and negative effects might she expect?
o Do you believe whistle-blowing is justified in this situation? Why or why not?
o Is it required? Why or why not?
Sex, Money, and Whistle-Blowing
Like all recent NBA All-Star players, Kevin Johnson made a lot of money during his pro basketball career.
It drained out fairly quickly too. A few hundred-thousand went to the family of a sixteen-year-old high-
school girl in Phoenix after a he-said, she-said sex accusation. A decade later, a similar story emerged, but
at a different place: this time it was three girls in Sacramento, California, who attended St. Hope
Academy. They took their stories—each told of a similar incident involving Johnson—to the recruitment
advisor, Jacqueline Wong-Hernandez. Soon after, Ms. Wong-Hernandez was gone. Her resignation was a
protest over the way the complaints were handled internally at the school, which was by dismissing them.
Not only did St. Hope Academy take no action, the local police also decided not to press any charges in a
case that essentially came down to one person’s word against another’s.
Imag
e rem
oved
due
to c
opyr
ight
issue
s.
Saylor URL: http://www.saylor.org/books Saylor.org
320
St. Hope Academy, as it happens, wasn’t a public school but a private business, and Kevin Johnson was
the founder and CEO. A lot of the money flowing into the young institution came from the federal
government as grants from the AmeriCorps program. After accusations surfaced that the grant money
wasn’t spent appropriately, the school agreed to pay back $423,836.50 to the government (about half of
what the school had received). The first payment, about $73,000, was made by Kevin Johnson himself.
So things probably would have ended, except for an AmeriCorps inspector general named Gerald Walpin.
He believed Johnson had gotten way too good a deal: the school should have been forced to pay back
much more of the grant money it had received. On May 5, 2009, he took the accusation to a California
congressman who in turn brought public attention to the issue. On June 10, Mr. Walpin was fired. In an
editorial statement, the Washington Times complained, “Mr. Walpin was fired with no explanation and
no warning to Congress; even though the act governing inspectors general says IGs can be removed only
after the president gives Congress 30 days’ notice and a reason for the firing. Rather than investigate the
IG’s serious complaints, Mr. Obama fired him. In short, he snuffed out the whistleblower rather than heed
the whistle.”
[4]
A local Sacramento TV station doing some follow-up uncovered a report detailing hush money payments
at St. Hope and noted that the former NBA All-Star “often described himself as a personal friend” of
another avid basketball player, President Obama.
[5]
Q U E S T I O N S
1. How were the following two faced with a third-party obligation?
o Jacqueline Wong-Hernandez
o Gerald Walpin
2. In general, there are three possible responses to third-party obligations, do nothing, report the
problem, become a whistle-blower. How would you categorize the response made by
o Wong-Hernandez?
o Walpin?
3. What questions can be asked to help determine whether whistle-blowing is justified? How might
they be answered in the case of
Saylor URL: http://www.saylor.org/books Saylor.org
321
o Wong-Hernandez?
o Walpin?
4. What questions can be asked to help determine whether whistle-blowing is ethically required?
How might they be answered in the case of
o Wong-Hernandez?
o Walpin?
Loyal to the Badge
When police officer April Leatherwood went undercover in Memphis, she changed her name to Summer
Smith. She didn’t change her socks for a year—no showers or brushing her teeth either.
Her daily routine was to hang out on the street smoking and trying to befriend drug addicts. They’d take
her to their dealers, where she’d make a buy and then try to find out who was the next person up the
ladder. Her work resulted in about three hundred arrests, everyone from two-bit drug sellers to major
movers who organized the street-level crime from luxury apartments.
Why’d she do it? According to the newspaper article relating her story, she loved the camaraderie of the
department and its protect-and-serve mission.
When she emerged from the undercover program, she was promoted to detective. Unfortunately, her
three-year romantic partner had moved on, and it was difficult to get the bad memories out of her mind.
Still, when the reporter asked whether she’d do it again, she said, “Yeah.”
[6]
Imag
e rem
oved
due t
o cop
yrigh
t issu
es.
Saylor URL: http://www.saylor.org/books Saylor.org
322
Q U E S T I O N S
1. The two ideas on which company loyalty—or organizational loyalty to broaden the title—is built
are the following:
o An attachment to the organization that is non-instrumental, meaning the attachment is not
maintained only because it serves the employee’s concrete interests, such as the need for a
salary.
o A deposited value in the organization that goes beyond any individual and their attachment: the
organization’s value continues even without those who currently feel it.
How are these ideas manifested in the case of April Leatherwood?
2. Three measures on the scale of loyalty intensity are obedience loyalty, balanced loyalty, and free agency.
Given what you’ve read about Leatherwood, where would you put her on this scale? Why?
3. Think about one of the career lines you’re considering, or the one you’re currently on, and
imagine your company loyalty was similar to Leatherwood’s.
o What kinds of sacrifices do you imagine you’d make for the organization?
o Thinking about yourself, really, would you be able to make those sacrifices?
4. Leatherwood’s pay is not high, about $50,000 a year. That works out to about $7 an hour for the
twelve undercover months. Obviously she enjoyed no status while she was undercover. Now,
however, she has appeared in the newspaper and made detective grade in the department. In
your opinion from what you’ve read, do you believe she has acquired a level of status through her
work?
o If she has acquired a status, how would you describe it, what is it based on, how is it different
from the status enjoyed by, say, a senator or a movie star?
o Does this status—assuming she’s acquired it—compensate what she suffered? Explain.
Saylor URL: http://www.saylor.org/books Saylor.org
323
The Gawker Sex Tape
All kinds of things happen in advertising agencies. Part of the reason is the diversity: a typical medium-to-
large agency requires many different kinds of work, and that brings together a rainbow of people. There
are suited, business types in the client services section. They work with budgets and bulleted lists and
connect the agency with the corporate client. Down the hall the planners dress more casually and study
demographics and culture. They invent market segments with names like soccer moms and then devise
strategies for appealing to soccer moms’ distinct interests and tastes. Further down the hall, there are the
agency’s actual commercial makers. They call themselves creative talent and are free to appear for work
in jeans and ratty t-shirts. For their paycheck, they plan the short films the rest of us call TV commercials.
The typical large agency also needs some HR people, accountants, computer techs, and lawyers.
Most advertising agencies have a pretty good mix of men and women, and in general, there are a lot of
young people in the field because the long hours and short deadlines tend to lead workers to seek
employment elsewhere eventually.
Most agencies are good places for romance. The chemicals are right: young workers, long hours, the
excitement of million-dollar accounts, and lots of different types of people for different tastes. Those are
also, as it happens, good ingredients for sex, as people at BBDO (an Omnicom agency) in New York City
discovered when a grainy cell phone movie went viral. Shot by a guy in the creative department, he stuck
his camera over the top of a cubicle and caught a nude couple wedged into the back corner.
As far as the scandal went, it didn’t take long for industry insiders to figure out who’d been caught, and
from there, the information spread that they were both married to other people. The website Gawker.com
followed the action closely, posting the original film and then running follow-ups. In a nutshell, this is
Image
remo
ved d
ue to
copyr
ight is
sues.
Saylor URL: http://www.saylor.org/books Saylor.org
324
what happened. The romantic couple continued at their jobs. No word about how their marriages are
doing. The filmer got fired. He downloaded the footage onto his computer and then sent it around to a few
friends. He had nothing to do—he says—with the fact that a few weeks later it was all over the web. In his
words,
It ended up on Gawker and Media bistro and then the word got back to me that all the creative’s
were sending it around. I freaked. I thought it was amazing how something could go viral and
end up online so quickly when I had nothing to do with it really.
[7]
Well, he was the one who filmed and originally distributed it.
The discussion posted on the Gawker web page is probably hotter than the sex that got everything going.
Many issues come up, including: Why did the filmer get fired while the adulterers got to keep their
jobs? One answer someone wrote in is that filming and distributing a sex tape is unethical (and possibly
illegal if minors end up seeing it). A poster who calls himself BritSwedeGuy responds:
How could you be sacked for filming something you could see at work?
Would he have been sacked if he’d taken the video to HR?
Probably not.
So is he being sacked for withholding evidence then?
That only makes sense if the evidence was of a sackable offence.
Has he been sacked for passing the video on? Surely he’s a whistle-blower in that case and ought
to be protected.
This is his argument. First, it doesn’t make sense to fire the filmer for recording the sex, since the act took
place in public, and anyone (tall) could’ve seen it. The perpetrators couldn’t reasonably object to being
filmed if they were exhibiting themselves so openly. Second, if the filmer had taken the film to HR to
report the fact that sex was going on, he probably wouldn’t have been fired, and the entire episode
would’ve been managed internally (and quietly) inside the agency. That means the only justifiable reason
for firing the guy was that he digitalized the video and, in essence, made it possible for others to beam it
across the Internet. If that’s what he did, though, then he’s a whistle-blower and should be protected.
Saylor URL: http://www.saylor.org/books Saylor.org
325
Q U E S T I O N S
1. If the filmer did take the video to the human resources department, what would he be reporting?
What ethical misdeeds are happening?
o With respect to those misdeeds, where does the line get drawn between flirting for a second and
stripping down for a fifteen-minute frolic?
2. On the question of whistle-blowing—and the possibility that the filmer’s action was ethically
justifiable as a form of whistle-blowing—a poster named Bad Uncle isn’t buying it. He writes, “OK,
I’ll be less glib. I don’t see how f***ing someone is a major ethical violation worthy of whistle-
blowing (fnar)…it’s hardly damaging to a company, its clients, or its employees. Wake me when
their monotonous thrusting implants the seed of fraud into an earnings statement.”
Bad Uncle doesn’t think the filmer could defend himself by claiming to be a whistle-blower. In
your own words, why not? Do you agree? Explain.
3. Do you believe the filmer sensed a company loyalty? Would a stronger sense of company loyalty have
encouraged him to erase the tape instead of disseminating it? Why or why not?
4. Advertising agencies are notorious for fast money and little loyalty to their employees. Many agencies, if
they lose an account, straight off fire many of those who worked on the account even if the loss had
nothing to do with the employee’s work performance (the client may have discontinued a line of products,
for example, and for that reason discontinued the advertising). Given that business attitude, does the
company have a right to demand that employees think of the agency’s interests when doing things like
filming? Why or why not?
5. Work in advertising—especially in the creative department where people often have to actually make ads
for air right now—is very stressful. There’s a lot of money involved and a lot of competition among
creative’s. Do you believe sex at work is an ethically defensible way of alleviating the stress comparable
with taking a cigarette break or just a quick walk around the block? How could the argument be made in
favor?
6. If someone told you they wanted to work in advertising because it’s a good spot to meet someone and get
married (which is probably true at most agencies), do you believe that’s a reasonable decision, one in
harmony with the ethical responsibility to pursue one’s happiness and welfare? Why or why not?
Saylor URL: http://www.saylor.org/books Saylor.org
326
7. If someone told you they were going to work in advertising because they’d heard it’s a good place for fast,
cheap sex (which it probably is at most agencies), do you believe that’s a reasonable decision, one in
harmony with the ethical responsibility to pursue one’s happiness and welfare? Why or why not?
[1] Brian X. Chen, “Fallout from Wired.com’s iPhone App Payola Story,” Wired, Gadget Lab, March 24, 2010,
accessed May 19, 2011, http://www.wired.com/gadgetlab/2010/03/app-review-payola-reaction.
[2] Brian Ross, Richard Esposito, and Vic Walter, “Pay to Play: Music Industry’s Dirty Little Secret,” ABCNews.com,
February 8, 2006, accessed May 19, 2011,http://abcnews.go.com/Primetime/story?id=1591155&page=1.
[3] Ms. G. C. from Miami, “The Case of the Casual Kickback,” Urbana.org.
[4] “Editorial: Stonewalling on Walpin-gate,” The Washington Times, July 10, 2009, accessed May 19,
2011,http://www.washingtontimes.com/news/2009/jul/10/stonewalling-on-walpin-gate.
[5] “Report: Johnson Offered to Pay Accuser,” KCRA.com, November 20, 2009, accessed May 19,
2011, http://www.kcra.com/news/21679385/detail.html.
[6] Kristina Goetz, “A Year of Living Dangerously Takes a Toll on Undercover Memphis Officer,” Commercial Appeal,
August 30, 2009, accessed May 19, 2011,http://www.commercialappeal.com/news/2009/aug/30/year-of-living-
dangerously-takes-its-toll.
[7] Hamilton Nolan, “The Cameraman Speaks: He’s Fired but the Sex Tape Couple Keep Their Jobs,” Gawker,
November 26, 2008, accessed May 19, 2011,http://gawker.com/5099143/the-cameraman-speaks-hes-fired-but-
the-sex-tape-couple-keep-their-jobs.
- Structure Bookmarks
Chapter 7: Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5
Chapter 7: Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5
Chapter 7: Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5
Chapter 7: Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5
from The Business Ethics Workshop was adapted by Saylor Academy and is available under a
Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported
Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported
license without attribution as requested by the work’s original creator or licensor.
It is important to write concisely, provide the chapter title, chapter heading, page, or paragraph number. Include in-text citations and a reference in a reference list. To see how to cite the eBook, go to Content and view the module, Learn to Use APA. The citation and reference information is on the right-side of the screen.
Discussion #1: Generally speaking, it is illegal to make hiring decisions based on race, color, religion, sex, and national origin. If you are the owner of a restaurant that features Thai food, are you breaking the law by hiring cooks and wait staff who are of Asian descent? Be sure to support your position through the use of course resources.
Discussion #2: Christine Porath, author of the article, “The Silent Killer of Workplace Happiness, productivity, and Health Is a Lack of Basic Civility”, offers advice to leaders and managers who may want to craft more civil cultures. She posits that toxic people should be weeded out before they join the organization by interviewing for civility, using structured interviews with behavioral questions. She also suggests that references be checked thoroughly, but to also go beyond checking provided references and to chase leads and hunches. Develop and discuss a minimum of 3 behavioral questions that you believe might help identify toxic people before they are hired. Be sure to support your response.
Week 3: Ethical Treatment of Employees – Workplace Culture
Theme 1: Safety/Civility
Your Person
·
OSHA’s Wall of Shame: Agency Targets ‘Severe Violators’
·
The Top 10 Bizarre Workers’ Compensation Cases for 2015
Your Psyche
·
Kareem Hunt faces more than baseline six-game suspension
·
The silent killer of workplace happiness, productivity, and health is a lack of basic civility
·
Chris Porath – “Mastering Civility: A Manifesto in the Workplace,” WJLA Interview
Your Money
·
Thinking About Using Payroll Debit Cards? Read This First
·
New Overtime Rules Suspended for Now
·
Are ESOPs Good Retirement Plans?
Theme 2: Freedom From Discrimination
Illegal Discrimination
·
The Pregnancy Discrimination Act and the Supreme Court: A Legal Analysis of Young v. U nited Parcel S ervice
·
Legal discrimination in four letters: BFOQ
·
The strange loophole that lets Hooters hire only female servers
·
Is it okay to hire cooks to match the cuisine? (part I)
·
Resources Legal Alerts Newsletters Articles Blogs Mobile Apps Subject-Matter Booklets State Law Guides Newsletter PDF EEOC Settles Beef With Restaurant
Legal Discrimination
·
The Hidden Obstacle to Great Corporate Culture: Unconscious Bias
·
Former Hooters Waitress Awarded $250,000 in Racial Discrimination Case
·
Lifestyle Discrimination: Is it Legal?
·
8 Ways Employers Can Discriminate Against Workers – Legally
·
Anne Arundel Medical Center Won’t Hire Smokers In The Future
·
Pay Transparency Is The Solution To The Pay Gap: Here’s One Company’s Success Story
·
If a Law Bars Asking Your Past Salary, Does It Help or Hurt?
·
Employers Must Use Caution When Basing Pay Decisions On Prior Salary History
·
Schumpeter: ESOP – When Workers Are Owners
·
Employee Rights When Working for Multinational Employers
·
EU to push for 40% quota for women on company boards
·
EU workplace headscarf ban ‘can be legal’, says ECJ
Chapter8: Manager’s Ethics: Getting, Promoting, and Firing Workers from The Business Ethics
Workshop was adapted by Saylor Academy and is available under a Creative Commons
Attribution-NonCommercial-ShareAlike 3.0 Unported license without attribution as requested by
the work’s original creator or licensor. UMGC has modified this work and it is available under
the original license.
http://www.saylor.org/site/textbooks/The%20Business%20Ethics%20Workshop
https://creativecommon
s.
org/licenses/by-nc-sa/3.0/
https://creativecommons.org/licenses/by-nc-sa/3.0/
Saylor URL: http://www.saylor.org/books Saylor.org
327
Chapter 8
Manager’s Ethics: Getting, Promoting, and Firing
Workers
Chapter Overview
Chapter 8 “Manager’s Ethics: Getting, Promoting, and Firing Workers” examines some ethical decisions
facing managers. It considers the values that underlie and guide the hiring, promoting, and firing of
workers.
Saylor URL: http://www.saylor.org/books Saylor.org
328
8.1 Hiring
L E A R N I N G O B J E C T I V E S
1. Locate ethical tensions affecting the breadth of a hiring search.
2. Define applicant screening and mark its ethical boundaries.
3. Define applicant testing and consider what makes an appropriate test.
4. Draw the lines of an ethical interview process.
Help Wanted, but from Whom?
The Central Intelligence Agency’s hiring practices are widely known and well depicted in the movie The
Recruit. After discretely scouting the special capabilities of a young bartender played by Colin Ferrell, Al
Pacino catches him at work, orders a drink, carries on a one-sided and cryptic conversation, performs a
magic trick with a ripped newspaper, announces that “things are never quite as they appear,” and finally
admits that he’s actually a job recruiter.
Ferrell seems annoyed by the man’s presence.
Pacino returns to the newspaper, pulls out a page covered by an ad announcing “Two Day Specials.” He
circles the letters c, i, and a in “Specials” and walks out. Colin Ferrell follows.
[1]
Actually, that’s not true. The CIA doesn’t hire that way. They advertise on CareerBuilder just like any
other company. You can understand, though, why they wouldn’t mind scouting out their applicants even
before allowing people to apply; they don’t want to end up hiring double agents.
Something like that happened soon after Procter & Gamble grew jealous of a competitor’s hair-care
products. Salon Selective, Finesse, and Thermasilk were all doing so well for Unilever that P&G contracted
people to get hired over at Unilever and bring back secrets of their success. The corporate espionage—
which P&G executives characterized as a “rogue operation”—led to a multimillion-dollar settlement
between the companies and left behind the lesson that when you’re the boss and you’re hiring, you’ve got
to make sure that the people you bring in will be loyal to the company.
[2]
The problem is you’ve also got to make sure that they’re going to do good work, the best work possible.
Between the two requirements there’s a tension stretching through every decision to hire a new worker.
On one side, you want to limit the people you even consider to those few who, for one reason or another,
Saylor URL: http://www.saylor.org/books Saylor.org
329
you know won’t be a total disaster. On the other side, no company can survive playing it safe all the time;
generally, the corporations able to hire the best talent will win over the long run.
And
one way to get the
best talent is to cast as large a net as possible, let a maximum number know that a position is available,
and work through the applications carefully no matter how many pour in.
Conclusion. Hiring employees can be safe or risky depending on how broadly you announce a job opening.
Three Strategies for Announcing a Job Opening: Nepotism, Internal Public
Announcement, Mass Public Announcement
Start on the safe side of hiring. Nepotism is granting favored status to family members. In the case of
hiring, it means circulating information about open jobs only to your relatives. Naturally this happens at
many small businesses. A sales representative at a small firm importing auto accessories meets a woman
at work. She’s also a rep. Marriage follows. A year later he decides to quit his job and strike out on his own
with a new website project that reviews and sells the same kind of car products. Things go well, page hits
climb, sales increase, and soon he needs help so he hires…his wife. They’ve worked together before, and
they both know the field. Most important, the risk is minimal. Since he’s waking up with her in the
morning he can figure she’s not going to skip out on work just because it’s a nice spring day. And is she
going to steal office supplies? A little money from the payroll? An important client? Probably not. This is a
case where nepotism makes sense.
But what about the other way? What if the husband’s solo venture flops, and at the same time, his wife’s
career flourishes. Now he needs a job, and she’s got the power to hire. A job opens up. Probably, she’s got
junior staff ready for the post, but can she push them aside and bring her husband in?
There is some justification: she’s worked with him before, and she knows he performs well. Plus, as a boss
of his own (failed) business, he’s obviously got leadership experience and he has demonstrated initiative.
All that counts for something. But if she goes with him she’s going to breed resentment in her group. You
can hear it:
“Hey, what do you need to get a promotion around here?”
“A last name.”
And
Saylor URL: http://www.saylor.org/books Saylor.org
330
Now you might be asking why nepotism bugs me so much. It’s the presumption. It’s the attitude.
It’s just one more example of how life isn’t fair. Am I jealous? I don’t know. I guess I take
advantage of the company in other ways…LOL. What can I learn from this? That life is good if
you’re born into the right family? That I need to control my attitude and stop letting petty crap
drive me to drink?
[3]
That last paragraph comes from a blog entry titled “Nepotism Sucks.” It does for his company too: few
firms can be successful with employees musing about how they “take advantage of the company” while
they’re punctuating comments about their work with LOL. As for the central issue, he’s right. Basic
fairness isn’t being honored: people are getting considered for a job because of who they’re related to, and
it’s not this blogger’s fault that his last name is wrong.
On the other hand, “Is Nepotism So Bad?” titles an article on Forbes.com that compiles a list of large
companies—including Forbes—where nepotism has been the norm…and successful. According to the
article, experts estimate that executive-level nepotism works out about 40 percent of the time. What are
the advantages to bringing in your own? Familiarity with the business and trust are noted. Another
advantage is also underlined: frequently, relatives don’t want to let their own relatives down. Sons work
harder for fathers, cousins for cousins, brothers for sisters. There’s a productivity advantage in nepotism.
Arguably, that factor weighs more heavily than the bitterness arising when deserving workers already
employed don’t get a chance to apply for a job because it already went to the boss’s sister-in-law.
[4]
Finally, at least theoretically, there’s a creative solution to the bitterness caused by nepotism: make
virtually every post a nepotism-first position. Oil-Dri, a producer of absorbent materials, celebrated its
fiftieth anniversary with a party for all employees. “Would everyone,” the group was asked at one point,
“who is related to someone else in the company please stand up?” Of the seven hundred employees, about
five hundred left their seats.
Internal public job announcements occupy a middle spot on the continuum between playing it safe (only
letting selected people you’re certain will be loyal and at least moderately capable know when a job is
available) and going for the best talent (broadcasting the post as broadly as possible and accepting
applications from anyone).
An example of an internal public job announcement comes from the National Review, a political
magazine and website run by the kind of people who wear suits and ties to baseball games. Their blog is
Saylor URL: http://www.saylor.org/books Saylor.org
331
called The Corner, and the magazine’s editors fill it with thoughts and arguments about the day’s political
debates in Washington, DC. There’s also a bit of insider humor, provocation, and satire tossed back and
forth between posters. If you keep reading for a few weeks, you’ll start to sense an intellectual soap opera
developing along with the libertarian-conservative politics; there’s an undercurrent of shifting alliances,
snarkiness, and thoughtful jabs.
You’ll also notice that National Review places job announcements on The Corner blog. There aren’t a lot
of openings, but every couple of weeks a little announcement appears between posts.
The National Review Online is seeking an editor with web capabilities. Send applications to
____@nationalreview.com.
It’s pretty ingenious. The only people who are going to be reading The Corner are
sincerely interested in the wonkish subjects these guys publish about;
not out there just looking for any job (at the time they see the announcement, they’re not looking for a job
at all because it’s not a job site);
compatible on a personal level with the National Review crew. The posters let personalities shine
through, and if you don’t have chemistry with their style of humor and talk, you’re simply not going to be
reading them.
What an internal public job announcement seeks to do is get the most applications in the hopper as
possible, and so the announcement is published on a free Internet page that anyone can see. That’s the
public part. But because the page is only commonly followed by people who are already inside the world
of public policy defining the employees at National Review, the bosses don’t need to worry about the
wrong kind of people sending in résumés. That’s the “internal” part. Recruiters can get a lot of
applicants—increasing their chances of finding really talented people—without worrying too much about a
bunch of lefties who really prefer websites like Daily Kos trying to fake their way into the organization.
Mass public job announcements are just what they sound like. You need someone and you post the
position at Monster, CareerBuilder, and The Ladders. Here you’re giving up confidence that applicants
will fit into the organization naturally, and you’re even risking corporate spying moles like those that
infested Unilever. In exchange, however, you’re getting the broadest selection possible of people to toss
their hat into the ring, which maximizes your chances of finding stellar work performance.
Saylor URL: http://www.saylor.org/books Saylor.org
332
Beyond the advantage of many applicants, there are good ethical arguments for mass public job
announcements. The simplest is fair play: everyone should get an equal opportunity to take a run at any
job. Just past that, there are concerns about discrimination that are eased by mass announcements. While
there’s no reason to launch charges of inherent racism at nepotistic hiring practices, it might well be true
that if a small business is initiated by an Asian family, and they start hiring relatives, the result at the end
of the day is a racial imbalance in the company. Again, no one is equating nepotism with racism, but the
appearance can develop fairly easily whenever job announcements are not publicized as widely as
possible. The parallel case can be made with respect to internal public job announcements. If 90 percent
of the people who come in contact with the “help wanted” message happen to be women, sooner or later,
there’s going to be some guy out there who complains. So, one argument in favor of mass announcements
is the stand it helps take against illegal and unethical discrimination.
Another argument for mass announcements is reciprocity. If a company is trying to sell a product to the
general public, to anyone who’s willing to pay money for it, then shouldn’t they allow everyone a shot at
becoming an employee? It doesn’t seem quite right to profit from anyone—to try to sell, say, a car to
anyone who walks in the door—and then turn around and not give all those consumers a decent chance at
earning a living there at the dealership.
Conclusion. Announcing a job opening is not automatic. You can announce the spot more publicly or less
so. There are advantages and disadvantages to the various approaches, but there’s always an ethical
responsibility to clearly account for the reasons why one approach is selected over another.
Ethical Perils of Job Announcements
Ethical perils of job announcements include
1. describing a position in ways that don’t correspond with the reality,
2. announcing a post to people who really have no chance for the job.
Once you’ve identified the demographic pool you’d like to recruit from, it’s easy to oversell the job in the
announcement you post. The most blatant cases—You can earn $300 per hour working from home!—are
obvious frauds, but even sincere attempts can cause misunderstandings. Say a job requires “occasional
travel.” Fine, but does that mean occasionally during the year or occasionally during the month?
Saylor URL: http://www.saylor.org/books Saylor.org
333
The much more severe case of insincerity in job announcements is posting one before an audience that
has no reasonable chance of getting the job. When Hooters posts a “server wanted” sign, we all know what
they’re looking for just like when the rough bar next door advertises for a bouncer. But what if it’s a formal
restaurant advertising for a waiter? If the place is across town, you can’t just drop in to check out the kind
of people they hire. So maybe you go through the application process and make the telephone calls and
finally go in for the interview. As you walk through the door, the first thing they check out is your weight
profile. Then your jaw line, haircut, eyes, and the rest. They want to see how you compare with the other
waiters who all look like they model on the side.
If you’re lucky, you see yourself fitting right in, but if you’re like most of us, you know the interview’s over
before it started; the whole thing has been a huge waste of time.
Now put yourself on the other side. As the restaurant manager trying to fill the position, you know
you should put the requirement that applicants be devastatingly handsome into the ad. The duty to be
honest requires it. The duty to treat others as an end and not a means requires it. The idea that our acts
should be guided by the imperative to bring the greatest good to the greatest number requires it. Almost
every mainstream ethical theory recommends that you tell the truth about what you’re looking for when
you announce a job. That way you don’t waste peoples’ time, and you spare them the humiliation of being
treated as irrelevant. So you should want to put in the ad something about how only potential movie stars
need apply.
But the law virtually requires that you don’t put the line in. If you explicitly say you’ll only consider
exceptionally attractive men for your job, you open yourself to a slew of lawsuits for unfair and
discriminatory hiring practices. In fact, even Hooters aren’t safe. In 2009 the chain was sued by a Texas
man named Nikolai Grushevski because they refused to hire servers who looked, well, like him. When it
gets to that point—when hairy guys can get away with calling lawyers because they aren’t hired to serve
food in short shorts and halter tops—you can understand why restaurants don’t want to publicly admit
exactly what they’re looking for.
[5]
Bottom line: if Hooters just comes out and states what it is that makes their kind of employee, they can get
sued. So they’re much better off just making the announcement ambiguous. That way, when it turns out
that no hairy guys ever seem to get hired, they can always say it’s because they didn’t seem so adept at
Saylor URL: http://www.saylor.org/books Saylor.org
334
dodging tables while shooting around with trays of beers and sandwiches. Or whatever. One lie is as good
as another so long as it keeps the restaurant out of the courtroom.
For managers, this is a tight spot. They’re caught between what’s right and the law. In ethical terms,
they’re stretched between two conflicting duties: to tell the truth and to get the famous Hooters Girls into
the restaurant.
Screening
Reducing a large pool of applicants to a manageable selection of people for serious consideration
is applicant screening, sometimes referred to as filtering. Screening begins with the job announcement.
Requirements like “three or more years of experience” and “willingness to work the night shift” go a long
way toward eliminating applicants.
It’s impossible, though, to completely define the perfect applicant beforehand, and even if you could,
there’s almost always going to be someone like Nikolai Grushevski who shows up. So screening continues
as the preliminary review of applications and applicants to see who can be quickly crossed off the list
without any serious consideration.
Legally, who can be crossed out? The default response is no one. In its broadest form, civil rights
employment law guarantees equal opportunity. All applicants deserve to be considered and
evaluated solely on their ability to do the job, and the federal government’s Equal Employment
Opportunity Commission is stocked with lawyers who are out there doing their best to make sure the rules
are upheld. For managers, that means they’ve got to take all applicants seriously; they’ve got to pursue
interview questions about ability, training, experience, and similar. Now, this is where a guy like
Grushevski can come in the door and say, “Look, I can deliver a round of burgers and beer as well as any
woman.” He’s probably right. Still, he’s not the right person for the job; there’s no reason for a manager to
lose valuable time dealing with him.
Similarly, a wheelchair-bound man shouldn’t be a beach lifeguard; an eighty-year-old shouldn’t be flying
commercial jetliners; the seven foot one and 330-pound Shaquille O’Neil isn’t going to be a horse jockey.
There is a legal way for companies to summarily screen out inappropriate applicants: by appealing
tobona fide occupational qualifications (BFOQs). BFOQs are exceptions granted to equal opportunity
requirements. A form of legalized discrimination, they let managers cross off job applicants for reasons
Saylor URL: http://www.saylor.org/books Saylor.org
335
that are normally considered unfair: gender, physical size, religious belief, and similar. (As a note, race
isn’t allowed to be considered a BFOQ.)
When do bosses get this easy way out? When they can show that the otherwise discriminatory practices
are required because of a business’ nature. So while it’s clear that Shaquille O’Neil’s intimidating size
doesn’t mean he’ll be a bad accountant, the nature and rules of horse racing require that riders be
diminutive, and that means Shaq would be a disaster. A horse owner can show that the job requires a
physically little person to be successful. Thus size becomes a BFOQ and a legitimate way of screening
applicants for that particular
job.
A maker of men’s clothes can reasonably screen out women from the applicant pool for models—but they
can’t eliminate female applicants from consideration for a sales position. Or they could, but only if they
could show that maintaining a masculine public image was integral to the success of the company. For
example, you could imagine a company called Manly Incorporated, which sold products based on the
premise that every employee was a quality control officer.
Along similar lines, a Catholic school may screen atheists from the search for a teacher, but it’s harder to
justify that filter for janitors. At the airport security line women can be assigned to pat down women and
men to men, but either may apply for the job to hand check the carry-on bags.
Another common screen is education. Imagine you have just opened a local franchise of Jan-Pro, which
offers commercial cleaning services to car dealerships, gyms, banks, churches, and schools.
[6]
What level
of education will you be looking for in potential employees? Since the job involves mixing chemicals, it
seems like requiring some basic education is a fair demand, but is a college degree necessary for the work?
You may have one as a manager, but that doesn’t mean you should necessarily demand that much from
employees. And on the other side, is it fair to screen out someone who’s got too much education, say a
master’s degree in chemistry? It does seems reasonable to suspect that this kind of person will soon
become bored pushing a vacuum over carpets.
Then again, do you know that will happen? Is it fair to screen based on what you suspect might occur?
Another type of screening catches high-risk lifestyles. Smoking is one of the most often cited, and the
Humana company in Ohio is one of a growing number that’s directly banning smoking—on or off work—
by new employees.
[7]
Saylor URL: http://www.saylor.org/books Saylor.org
336
These healthy lifestyle policies set off firestorms of ethical debates. With respect to smoking and in broad
strokes, the company has an interest in prohibiting smoking because that should mean healthier workers,
fewer sick days, lower health insurance premiums, and higher productivity. In short: better working
workers. On the other side, job applicants (at least the smokers) don’t believe that they’re less productive
than everyone else, and anyway, they resent being excluded for a recreational habit pursued on their own
time. In long discussion boards—there are hundreds online—the debate plays out. Here’s one exchange
from a typical board:
bonos_rama:
I wouldn’t hire anyone that has a habit of leaving their desk every hour to stand outside for
10 minutes. Doesn’t matter if it’s to smoke, drink coke, or pass gas that they’re leaving, it’s
bad for productivity.
Mother of a
Dr.:
But it’s OK to stand by the coffee pot and discuss sports and politics? Productivity actually
improves when you get away from the computer every hour.
matt12341:
Even discounting the productivity argument, smokers tend to have more long-term health
problems, leading to higher insurance premiums so companies end up paying more.
jamiewb:
What if we apply this logic to people who are overweight? What about people who have a
family history of cancer? Or a higher incidence of diabetes? As long as it doesn’t impact job
performance, I don’t think it’s fair to refuse to hire smokers.
happily-
retired:
I think it is a great idea to not hire smokers. Up next should be obesity, as it leads to diabetes,
heart problems, joint problems, etc. Companies following that path would be demonstrating
good corporate citizenship by fostering a healthier America.
Zom Zom:
Yes, the good citizenship of fascism. Now my employer has the right to dictate what I do with
my body? “Land of the free,” unless your boss doesn’t like the choices you make.
[8]
You can see that underneath the back-and-forth, this is ultimately a debate about ethical perspectives.
One side tends toward a utilitarian position: the greater good in terms of health and related issues justifies
the filtering of smokers in hiring decisions. The other side tends toward a fundamental rights position:
what I do with my time and body is my decision only. Both sides have strong arguments.
Saylor URL: http://www.saylor.org/books Saylor.org
337
Criminal record screening is another common filter for job applicants. Most states won’t allow employers
to deny someone fair consideration for a job only because of a prior criminal conviction. There’s wiggle
room, though. In New York, Article 23-A of the correction law certifies that employment may be denied if
there’s a direct relationship between the criminal offense committed and the employment sought,
the applicant would pose an unreasonable risk to property or the safety or welfare of others.
Those are big loopholes. The first one means the Brinks armored car company can legally refuse to
consider ex-bank robbers for a position. It may also apply to the shoplifter who wants to be a cashier or
the drug dealer who wants a job in the pharmacy.
The second exception is still broader and applied in Grafter v. New York City Civil Service
Commission.
[9]
In that case, the Fire Department of New York refused to hire Grafter because he’d been
caught drunk driving on his last job. A potentially drunken fireman does seem like a risk to the welfare of
others. Pushing that further out, the same would probably go if he applied to be a taxi driver. In fact, the
list of jobs that may seem dangerous for others if the worker is drunk extends a long way, probably
everything in construction, transportation, or anything with heavy equipment. So the law does allow
employers to resist hiring convicts across a significant range of wrongdoing.
Finally, the basic ethical tension pulls in three competing directions for any manager facing a criminal
hiring decision:
1. The ethical responsibility to recovering criminals. Rehabilitation (via honest work) is good for ex-
convicts.
2. The manager’s responsibility to the company. Managers need to avoid problems whenever
possible and keep the machine running smoothly so profits flow smoothly too.
3. The company’s responsibility to the general public. If a taxi syndicate is hiring ex-drunk drivers,
you’ve got to figure something’s going to go wrong sooner or later, and when it does, the person who put
the driver behind the wheel will be partially responsible.
Social media is another potential filter. Fifty-six percent of millennial believe that the words and pictures
they put on Facebook and Twitter shouldn’t be allowed to factor into hiring decisions.
[10]
Recruitment
officers, they’re saying, shouldn’t be going through online photo albums to check out the kinds of things
you and your buddies do on Friday nights.
Saylor URL: http://www.saylor.org/books Saylor.org
338
From the employers’ side, however, the argument in favor of checking the pages is simple. If an applicant
is sufficiently incautious to leave pictures of massive beer funnel inhalations available for just anyone to
see—and if they do that while they’re trying to put their best face forward as job seekers—then God knows
what kind of stuff will be circulating once they’ve got a job. As a manager, it’s part of your job to protect
the company’s public image, which means you’ve got to account for clients and others maybe running the
same Google and Facebook searches that you are.
It’s an easy scenario to imagine: you hire someone with a flamboyant online life. Soon after, a client
working with her gets nosey does a Google image search, and what comes in at the top of the list is a
picture of your new employee slamming beers, chain-smoking cigarettes, or maybe inhaling something
that’s not legal. This isn’t good and the person who looks really bad is the supposedly mature manager
who allowed the whole thing to happen by hiring her.
Of course there’s always the standard but still powerful argument that what employees do after hours is
their own business, but one of the realities inherent in the Internet is that there is no such thing as “after
hours” anymore. Once something goes online, it’s there all the time, forever. Managers need to take
account of that reality, which might mean rethinking old rules about privacy.
Testing
Once an ad has been placed, and applicants have been pooled, and the pool has been screened, the real
hard work of hiring begins: choosing from among apparently qualified people. One tool used in the
selection process is applicant testing. There are various sorts of tests, but no matter the kind, for it to be
legitimate; it should itself pass three tests. It ought to be
Valid. The test must measure abilities connected to the specific job being filled. A prospective roadie for
Metallica shouldn’t be asked to demonstrate mastery of Microsoft Excel, just as there’s no reason to ask an
accountant to wire up his cubicle with speakers blasting 115 decibels.
Normalized. The test must be fair in the sense that results are adjusted for the circumstances of the
testing session. If you’re checking to see how frequently applicants for the post of TV weatherman have
predicted sunshine and it turned out to rain, and one woman gets tested in Phoenix while another takes
Seattle, it’s pretty easy to see who’s going to win in terms of raw numbers. Those numbers need to be
adjusted for the divergent levels of difficulty.
Saylor URL: http://www.saylor.org/books Saylor.org
339
Constant. The results any test taker achieves over time should be similar. Just like a broken clock is right
twice a day, an applicant for an interior design job who happens to be color-blind might once in a while
throw together a carpet-sofa combination that doesn’t clash. A good test eliminates the lucky hits, and
also the unlucky ones.
Of the many kinds of hiring tests now in use, the most direct try to measure the exact skills of the
job. Skill tests can be simple. They’re also relatively easy to control for validity, normalization, and
constancy. For example, applicants for a junior-level position in copyediting at a public relations firm may
be given a poorly written paragraph about a fictional executive and asked to fix up the spelling and
grammar.
Psychological and personality tests are murkier; it’s more difficult to show a direct link between the
results and job performance. On one side, you’ve got a test that probes your inspirations and fears, your
tastes and personal demons. On the other side, the test’s goal is to reveal how well you can handle plain
work assignments. Here’s an example of the disconnect. The following is a true-or-false question that
Rent-A-Center placed on one of its employee application tests: I have no difficulty starting or holding my
bowel movement.
[11]
Well, it’s hard to see the link between bathroom performance and the ability to rent washer and drier sets.
Rent-A-Center wouldn’t be asking, though, if they didn’t think the link was there. And they could be right;
there may be some connection. One of the firmest sources of belief in the link between personality profile
and job performance is the very interesting Minnesota Multiphasic Personality Inventory (MMPI). That
specific test is the origin of the bathroom question. Other true-or-false choices on the long test include the
following:
I am very attracted to members of my own sex.
Evil spirits possess me sometimes.
Now, the MMPI is a real test with a long and noble history. One of the things it tries to do is
establish correspondences. That is, if we take a group of successful executives at Rent-A-Center and we
discover that they nearly universally have trouble in the bathroom, then it may make sense to look for
people who suffer this discomfort when looking to recruit future company leaders. As for the why
question—as in why is there a link between bathroom habits and success?—that doesn’t matter for a
Saylor URL: http://www.saylor.org/books Saylor.org
340
correspondence test; all that matters is that some link is there. And if it is, then you know where to look
when you’re hiring.
Theoretically, correspondence testing makes sense. Still, it’s hard to know how applicants are going to
react to questions about sexual attraction and evil spirits. Obviously, some are going to find the whole
thing too weird and not turn in responses that actually match their profile. As for applicants and
employees of Rent-A-Center, they filed a lawsuit.
[12]
Inescapably, correspondence-type personality tests are vulnerable to lawsuits because they’re explicitly
based on the premise that no one knows why the results indicate who is more and less suitable for a post.
The administrators only know—or at least they think they know—that the correspondence is there. It’s not
obvious, however, like it is with a simple skill test, so it makes sense to imagine that some are going to
doubt that the test is valid; they’re going to doubt that it really shows who’s more and less qualified for a
job.
So the problems with psychological tests include validity failure and lawsuits. Problems with constancy
and normalization could also be developed. Added to that, there are invasion of privacy questions that are
going to get raised whenever you start asking perspective employees about their bathroom habits and
bedroom wishes.
On the other hand, it needs to keep being emphasized that the tests do happen, and that’s not a
coincidence. At the Universal Studios Hollywood theme park, recruiter Nathan Giles reports that the tests
he administers—with true-or-false questions including “It’s maddening when the court lets guilty
criminals go free”—actually do produce valuable results. They correlate highly, he says, with personal
interviews: if you do well on the test, you’re going to do well face to face. And though the application and
interpretation of these tests are expensive, in the long run they’re cheaper than interviewing everyone.
Finally, if that’s true, then don’t managers have a responsibility to use the tests no matter how heated the
protests?
[13]
Lie detectors in the Hollywood sense of wires hooked up to the fingers for yes-or-no interrogations are
illegal except in highly sensitive and limited cases, usually having to do with money (bank guards) and
drugs (pharmaceutical distribution). Written honesty tests are legal. Generally, the questions populating
these exams resemble those found on psychological tests, and deciphering the results again works through
Saylor URL: http://www.saylor.org/books Saylor.org
341
correlation. Obviously, the test can’t work directly since both honest and dishonest people will answer
“yes” to the question “are you honest?” Here are some typical questions that do get asked:
I could help friends steal from my company.
I’m not an honest person and might steal.
I return quarters I find on the street to the police station.
Medical tests are generally only considered appropriate when the specific job is labor intensive. As always,
there’s a difference between testing and prying, and it’s your responsibility as a manager to limit the
questioning to specifically work-related information. Questions about past physical problems are
generally considered off limits as are future problems that may be indicated by family health history. A
simple example of an appropriate medical test would be a vision examination for a truck driver.
When Michael Phelps—the thick-grinned Olympic swimming hero—got photographed pulling on a bong,
he immediately failed the drug test with one of his employers: Kellogg’s breakfast cereal. He wouldn’t be
hired again, the company explained, because smoking pot “is not consistent” with the company’s image.
The National Organization for Reform of Marijuana Laws rushed to disagree, insisting that the problem’s
not that the drugs are bad; it’s the law that’s outdated and wrongheaded. They were supported, NORML
claims, by the Washington Post and Wall Street Journal.
[14]
However that might be, it’s seems difficult to object to Kellogg’s argument. The reason they’d hire Michael
Phelps in the first place is to brand their product with the image of beaming, young health, not zoning out
in front of the TV eating Doritos. Whether it’s legal or not, pot smoking is going to clash with the job
description.
But what if he hadn’t been caught by someone with a camera? Would Kellogg’s have the right to demand a
drug test before signing Phelps up as a representative? It depends where you are. Because there’s no
broad federal law on the subject, the rules change depending on your state, even your city. If you’re
looking for a job and you share a pastime with Michael Phelps, you may be in trouble in Alaska where any
employer can test any applicant at any moment. In Arizona, on the other hand, you have to get written
warning beforehand, which might allow for some cleanup. And if you’re applying for a government job in
Berkeley, California, you can party on because a local ordinance prohibits testing.
[15]
Looking at the Berkeley law allows a sense of the central ethical conflict. On one side, the employers’, the
obvious and strong argument is that drug use negatively affects work performance, so evaluating job
Saylor URL: http://www.saylor.org/books Saylor.org
342
prospects in terms of their future productivity implies, it almost requires, making sure they’re not
distracted or disoriented by drug habits. In contrast, the Berkeley ordinance persuasively states that
mandatory drug testing fails two distinct tests:
1. It assumes guilt instead of innocence.
2. It invades the individual’s privacy.
Deciding about drug tests seems to come down to deciding whose legitimate rights deserve higher billing:
the employer’s or the employee’s.
In 1971 the US Supreme Court banned intelligence quotient (IQ) testing except in very limited
circumstances after finding that the tests disparately affected racial minorities. Further, serious IQ tests
(as opposed to seven-question Internet quizzes) are extremely expensive to apply, so even if it were legal,
few employers would use the test with any frequency.
Conclusion. Tests applied by employers to job applicants include those probing skills, psychological
profile, honesty, medical condition, and drug use.
Interviewing
In 1998 the Indianapolis Colts had a very good problem. Holders of the top pick in the National Football
League draft, they had to choose between two exceptional players: two that everyone agreed radiated
Super Bowl talent. Both were quarterbacks. Peyton Manning had a better sense of the field and smoother
control of the ball; Ryan Leaf had a larger frame and more arm strength. Which would make the better
employee? The call was so close that the team with the second choice, the San Diego Chargers, didn’t care
much who the Colts selected; they’d be happy with either one.
The Colts didn’t have the luxury of letting the choice be made for them, and as draft day approached they
studied film of the players’ college games, poured over statistics, measured their size, speed, and how
sharply and accurately they threw the ball. Everything. But they couldn’t make a decision.
So they decided to interview both candidates. The key question came from Colts coach Jim Mora. He
asked the young men, “What’s the first thing you’ll do if drafted by the Colts?” Leaf said he’d cash his
signing bonus and hit Vegas with a bunch of buddies. Manning responded that he’d meet with the rest of
the Colts’ offense and start going over the playbook. Mora saw in Manning a mature football player ready
for the challenges of the sport at its highest level. In Leaf he saw an unpredictable kid.
Saylor URL: http://www.saylor.org/books Saylor.org
343
More than a decade later, Peyton Manning heads into another season as starting quarterback. Having won
the Super Bowl, set countless team and NFL passing records, and assured himself a spot in the NFL Hall
of Fame, you can understand that the Colts are happy with their selection.
Ryan Leaf has recently been indicted on burglary and drug charges in Texas. He got the news while in
Canada at a rehab clinic. As for football, after a rocky first few seasons, his performance collapsed entirely.
He hasn’t been on a field in years.
Interviews matter. Grades, recommendation letters, past successes, and failures on the job—all those
numbers and facts carry weight. But for most hiring decisions, nothing replaces the sense you get of a
candidate face to face; it’s the most human part of the process.
Because it’s so human, it’s also one of the most ethically treacherous. Two factors usually weigh heavily in
deciding which questions should and shouldn’t be asked:
1. Fairness
2. Pertinence
Fair questioning means asking similar questions to all applicants for a post. If the position is entry level,
many candidates will be young, inexperienced, and probably easily flustered. That’s normal. So too there’s
nothing necessarily wrong with trying to knock applicants off rhythm with a surprise or trick question.
The problem comes when one candidate gets pressed while another gets softballs.
What do tough questions look like? One answer comes from Google. There are always blog entries
circulating the Internet from applicants talking about the latest weird questions asked by that successful
and unpredictable company:
How many golf balls can fit in a school bus?
You are shrunk to the height of a nickel and your mass is proportionally reduced so as to maintain your
original density. You are then thrown into an empty glass blender. The blades will start moving in 60
seconds. What do you do?
How much should you charge to wash all the windows in Seattle?
Every man in a village of 100 married couples has cheated on his wife. Every wife in the village instantly
knows when a man other than her husband has cheated, but does not know when her own husband has.
The village has a law that does not allow for adultery. Any wife who can prove that her husband is
unfaithful must kill him that very day. The women of the village would never disobey this law. One day,
Saylor URL: http://www.saylor.org/books Saylor.org
344
the queen of the village visits and announces that at least one husband has been unfaithful. What
happens?
Explain a database in three sentences to your eight-year-old nephew.
[16]
We’re a long way from “why do you want to work at Google?” and even further from “what was your
biggest accomplishment or failure in your last job?” Those are softballs; anyone going into Google for an
interview is going to have prepared answers to those. It’s like reading from a script. But looking at the
hard questions Google actually poses, there is no script, and you can see how things could go south
quickly. You can’t figure out about golf balls and school buses, and you start to get nervous. Next, the
blender question seems odd and threatening, and it’s all downhill from there. Some interviews just don’t
go well and that’s it. As an applicant, you probably don’t have too much to complain about as long as the
next guy gets the same treatment. But if the next guy gets the softballs, the fairness test is getting failed.
As a manager, you can go hard or soft, but you can’t change up.
On the question of pertinent interview questions, the Google queries seem, on the face, to be troublesome.
Is there any job that requires employees to escape from a blender? No. But there are many jobs that
require employees to solve unfamiliar problems calmly, reasonably, and creatively. On that ground, the
Google questions seem perfectly justifiable as long as it’s assumed that the posts being filled require those
skills. By confronting prospective employees with unexpected problems demanding creative solutions,
they are, very possibly, rehearsing future job performance.
When the Colts were interviewing Peyton Manning and Ryan Leaf, something similar happened at the key
moment. At first glance, it seems like the question about the first thing each player would do after draft
day wouldn’t reveal much about all the other days to come. But the guys probably weren’t prepared for the
question, and so they had to reveal how they’d face a rapidly shifting reality that they had no experience in
dealing with, a reality just like the one they’d face the day after the draft when they’d go from being college
students on campus to wealthy adults in the big world. That makes the question pertinent. And that
explains why the answers that came back were telling. They distinguished a great hire from one of the
sports world’s monumental bungles.
On the other side, what kinds of questions reveal employees’ personalities’ but not their job skills?
Interview consultants typically warn managers to avoid asking about these subjects:
Saylor URL: http://www.saylor.org/books Saylor.org
345
Sex life
Opinions about homosexuality
Beliefs about contraception
Personal finances
Religious faith
Political affiliations
Except in special circumstances (a job is with a church, a political party, or similar), these kinds of
questions fall under the category of privacy invasion.
Finally, there are legal red lines to respect. While managers should ensure that applicants are old enough
to work and so can confirm that people are, say, eighteen or older, it’s discriminatory in the legal sense to
hire one person instead of another because of an age difference. This means asking “how old are you?” is
an off-limits question. It’s also illegal to ask about citizenship, though you can ask whether applicants are
legally authorized to work in the United States. It’s illegal to ask about disabilities, except as they relate
directly to the job. It’s illegal to ask about past drug and alcohol use, though you may ask applicants
whether they are now alcoholics or drug addicts.
The interviewer’s fundamental responsibility is to choose the best applicant for the job while giving
everyone a fair shot. Being fair isn’t difficult; all you need to do is just ask everyone the standard
questions: Why do you want to work for our company? What are your strengths? How do you work with
others? Do you stay cool under pressure? The problem here, though, is that it’s easy to get gamed. It’s too
easy for applicants to say, “I love your company, I’m a team player, and I never get mad.” Since everyone
knows the questions and answers, there’s a risk that everything will be fake. And that makes identifying
the best applicant nearly impossible.
One response to this is to junk the standard questions and come up with surprising and (seemingly) crazy
questions like they do at Google. Another strategy is a different kind of interview. A situational or
behavioral interview asks candidates to show how they work instead of talking about it.
Here’s how it goes. Instead of asking an applicant, “Do you stay cool under pressure?” (the correct
response is “yes”), the question gets sharpened this way:
You know how jobs are when you need to deal with the general public: you’re always going to get
the lady who had too much coffee, the guy who didn’t sleep last night and he comes in angry and
Saylor URL: http://www.saylor.org/books Saylor.org
346
ends up getting madder and madder…at you. Tell me about a time when something like this
actually happened to you. What happened? How did you deal with it?
It’s harder to fake this. Try it yourself, try inventing a story. Unless you’re a real good liar, you’re going to
hear the slipperiness in your own voice, the uncertainty and stammering that goes with making things up.
Probably, most people who get hit with situational questions are going to opt for the easiest route, which
is tell the truth and see how it goes. So the advantage to this kind of interview is that it helps sort out
qualified candidates by giving an unvarnished look at how they confront problems. On the other side,
however, there’s also a disadvantage here, one coming from the fairness side. If candidate A has spent
years at the counter of Hertz and candidates B through G have all been working in the Hertz back office, of
course the counter person is going to do better.
K E Y T A K E A W A Y S
In publicizing a job opening, a tension exists between limiting the job announcement to ensure that
applicants are appropriate, and widely publicizing the announcement to ensure that applicants include
highly qualified individuals.
Decisions about how broadly to publicize a job opening can be implemented through nepotism, internal
public job announcements, and mass public job announcements.
Screening job applicants makes the hiring process more efficient but raises ethical
concerns.
Common screening techniques involve BFOQs, educational requirements, high-risk lifestyles, criminal
record, and an applicant’s social media history.
Testing allows applicants’ suitability for a post to be measured but raises ethical concerns.
Common tests include skill tests, psychological and personality tests, honesty tests, medical tests, and
drug tests.
Applicant interviewing provides valuable information for evaluating job candidates, but questions ought to
be fair and pertinent to job-related concerns.
Saylor URL: http://www.saylor.org/books Saylor.org
347
R E V I E W
Q U E S T I O N S
1. Why might an employer opt for nepotism when hiring?
2. What is an advantage of a mass public job announcement?
3. Invent a job description that would allow applicants to be screened by a BFOQ.
4. Why might an applicant pool be screened for use of social media?
5. List the three requirements for a fair and legitimate job-applicant test.
6. How do psychological and personality tests work through correspondence?
7. Imagine a job and then an interview question for applicants that would not be pertinent and one that
would be pertinent.
8. Why might a behavioral interview be used?
[1] R. Donaldson (director), The Recruit (Burbank, CA: Touchstone Pictures, 2003), film.
[2] “Fortune: P&G Admits Spying on Hair Competitors,” Business Courier, August 30, 2001, accessed May 24,
2011,http://cincinnati.bizjournals.com/cincinnati/stories/2001/08/27/daily43.html.
[3] Marti’s Musings, “Nepotism Sucks,” August 30, 2004, accessed May 24,
2011,http://businessethicsworkshop.com/Chapter_8/Nepotism_sucks.html.
[4] Klaus Kneale, “Is Nepotism So Bad?,” Forbes, June 20, 2009, accessed May 24,
2011,http://www.forbes.com/2009/06/19/ceo-executive-hiring-ceonewtork-leadership-nepotism.html.
[5] “Texas Man Settles Discrimination Lawsuit Against Hooters for Not Hiring Male Waiters,” Fox News, April 21,
2009, accessed May 24, 2011,http://www.foxnews.com/story/0,2933,517334,00.html.
[6] “2011 Fastest-Growing Franchise,” Entrepreneur, accessed May 24,
2011,http://www.entrepreneur.com/franchises/fastestgrowing/index.html.
[7] Megan Wasmund, “Humana Enforces Mandatory Stop Smoking Program,” wcpo.com, June 16, 2009, accessed
June 7, 2011,http://www2.wcpo.com/dpp/news/local_news/Humana-Enforces-Mandatory-Stop-Smoking-
Program.
[8] “Humana: We Won’t Hire Smokers,” Newsvine.com, June 16,
2009,http://sorrelen.newsvine.com/_news/2009/06/16/2935298-humana-we-wont-hire-smokers.
[9] Grafter v. New York City Civil Service Commission, 1992.
Saylor URL: http://www.saylor.org/books Saylor.org
348
[10] Wei Du, “Job Candidates Getting Tripped Up By Facebook,” MSNBC.com, August 14, 2007, accessed May 24,
2011, http://www.msnbc.msn.com/id/20202935/page/2.
[11] Martin Carrigan, “Pre-Employment Testing—Prediction of Employee Success and Legal Issues,” Journal of
Business & Economics Research 5, no. 8 (August 2007): 35–44.
[12] Karraker v. Rent-A-Center, 2005.
[13] Ariana Eunjung Cha, “Employers Relying on Personality Tests to Screen Applicants, “Washington Post, March
27, 2005, accessed May 24, 2011,http://www.washingtonpost.com/wp-dyn/articles/A4010-2005Mar26.html.
[14] Paul Armentano, “The Kellogg Company Drops Michael Phelps, The Cannabis Community Drops
Kellogg’s,” NORML (blog), February 6, 2009, accessed May 24, 2011,http://blog.norml.org/2009/02/06/the-
kellogg-company-drops-michael-phelps-the-cannabis-community-drops-kelloggs.
[15] American Civil Liberties Union, “Testing Chart,” aclu.org, accessed May 24,
2011,http://www.aclu.org/FilesPDFs/testing_chart .
[16] Michael Kaplan, “Want a Job at Google? Try These Brainteasers First,”CNNMoney.com, August 30,
2007,http://money.cnn.com/2007/08/29/technology/brain_teasers.biz2/index.htm.
Saylor URL: http://www.saylor.org/books Saylor.org
349
8.2 Wages
L E A R N I N G O B J E C T I V E S
1. Explore the limits of wage confidentiality.
2. Delineate the uses and ethics of wages as a work incentive.
Two Salary Issues Facing Managers
Two salary issues facing managers are wage confidentiality and the use of wages as a work incentive.
Starting with wage confidentiality, in the private sector it’s frequently difficult to discover what an
organization’s workers are paid. Because of freedom of information laws, many salaries in government
operations and contracting are available for public viewing, but in the private sector, there are no laws
requiring disclosure except in very specific circumstances.
The main ethical reason for keeping wage information concealed is the right to privacy: agreements struck
between specific workers and their companies are personal matters and will likely stay that way. Still,
ethical arguments can be mounted in favor of general disclosure. One reason is to defend against
managerial abuse. In a law firm, two paralegals may have similar experience, responsibilities, and
abilities. But Jane is single and living in a downtown apartment while John has just purchased a home
where his wife is living and caring for their newborn. Any boss worth his salt is going to see that Jane’s got
no local commitments and, who knows, she may just up and decide to spend a few months traveling, and
then make a run at living in some different city. Maybe she likes skiing and a few years in Denver don’t
sound bad. John, on the other hand, is tied down; he can’t just walk away from his job. He can always get
a new one, of course, but if money’s tight and a recession is on, there’s an incentive to raise Jane’s salary
to keep her and not worry so much about John who probably won’t be going anywhere anyway. That
seems to be taking unfair advantage of John’s personal situation, and it also seems like paying someone
for something beyond the quality of the work they actually do. But if no one knows what anyone else is
making, the boss may well get away with it.
Stronger, the boss may actually have an obligation to try to get away with it given his responsibility to
help the company maximize its success.
Saylor URL: http://www.saylor.org/books Saylor.org
350
Another argument against confidentiality is the general stand in favor of transparency, and in this case,
it’s transparency as a way of guaranteeing that ethical standards of equality are being met. Since the
signing of the Equal Pay Act in 1963, the ideal of “equal pay for equal work” has become a central business
ethics imperative in the United States. But it’s hard to know whether the equality is really happening
when no one knows how much anyone else is making.
Of course, workers do frequently know how much other people are getting. In an extreme case, if you’re
laboring in a union shop, it’s probable that your wage scale will be set identically to those of your
companions. Even if you’re not unionized, though, people still talk at the water cooler. The result is, in
practice, that some wage transparency is achieved in most places. From there, arguments can be mounted
for the expansion of that transparency, but in most cases, the weight of privacy concerns will carry the
day.
Another wage issue concerns its use to provide a work incentive. Many sales positions have the incentive
explicitly built in as the employees receive a percentage of the revenue they generate. (That’s why
salespeople at some department stores stick so close after helping you choose a pair of pants; they want to
be sure they get credit for the sale at checkout.) In other jobs, generating a motivation to work well isn’t
tremendously important. The late-night checkout guy at 7-Eleven isn’t going to get you out of the store
with cigarettes and a liter of Coke any faster just because his salary has been hiked a dollar an hour.
Between the two extremes, however, there are significant questions.
Probably, the main issue involving the use of wages as a carrot in the workplace involves clarity. It’s quite
common, of course, for managers to promise an employee or a team of workers a pay hike if they win a
certain account or meet productivity goals. Inevitably, the moment of the promise is warm and fuzzy—
everyone’s looking forward to getting something they want, and no one wants to sour things by
overbearingly demanding specifics. The problems come afterward, though, if the terms of the agreement
have been misunderstood and it begins to look like there’s an attempt to worm out of a promised salary
increase. It is management’s responsibility as the proposers of the accord to be sure the terms are clearly
stated and grasped all around:
What, exactly, needs to be accomplished?
How much, exactly, is the wage hike?
Saylor URL: http://www.saylor.org/books Saylor.org
351
The mirror image of promised wage hikes to encourage improved worker performance is the bonus paid
at year’s end to employees marking a job well done. In a letter to the editor of the Greensboro News-
Record in North Carolina, a teacher cuts to the central ethical problem of the bonus: on the basis of what
do some employees receive one while others don’t? Some teachers, the writer states, “at schools with high
‘at-risk’ populations and students coming from homes where education is just not valued, work
themselves into a tizzy every year, but because of the clientele they serve, will never see that bonus money.
Inversely, schools with middle-class clienteles have teachers who work hard, but also others who merely
go through the motions but usually can count on that bonus because their students come from homes that
think education matters. Where is the justice in this?”
[1]
It’s not clear where the justice is, but there’s no doubt that bonuses aren’t serving their purpose. The
problem here isn’t a lack of clarity. No one disputes that the rules for assigning a bonus are clear. The
problem is that the rules don’t seem to account for divergent working conditions and challenges.
The important point, finally, is that even though a bonus is extra money outside the basic salary structure,
that doesn’t mean it escapes the question, “Where’s the justice in this?,” coming with every decision about
who gets how much.
K E Y T A K E A W A Y S
Wage confidentiality pits the right to privacy against the desire for, and benefits of, transparency.
Wages and bonuses are used to provide a work incentive, but problems arise when the pay increments
don’t obviously align well with promises or with job performance.
R E V I E W Q U E S T I O N S
1. Why might a company want to maintain wage confidentiality?
2. What is an example of a payment bonus becoming disconnected from work performance?
[1] Bill Toth, “Entire State ABC Bonus System Unfair,” News-Record.com, Letters to the Editor, August 19, 2008,
accessed May 24, 2011, http://blog.news-record.com/opinion/letters/archives/2008/08/.
Saylor URL: http://www.saylor.org/books Saylor.org
352
8.3 Promoting Employees
L E A R N I N G O B J E C T I V E S
1. Distinguish criteria for promoting employees.
2. Locate and define ethical issues relating to promotion.
The Drinking Strategy
If you want a promotion, does going out for drinks with the crew from work help the cause? Here’s a blog
post; it’s about two uncles—one who goes drinking with the crew and one who doesn’t—and you’ll see why
the answer might be yes:
Look at my uncles, they both work for Ford and one has been in his position for 10-plus years and
still doesn’t have a company car, while my other uncle has a company car, increase salary, paid
training. Even though he comes home to my auntie blinded drunk in the end it’s all worth it if you
want to be noticed.
[1]
Get hammered to get promoted! Too good to be true? Probably.
But not entirely, the Reason Foundation commissioned a report on the question of whether drinkers earn
more money than nondrinkers.
[2]
The title “No Booze? You May Lose” pretty much tells what the study
concluded about the link between social drinking with workmates and promotions. A few things should be
noted, though. Drinking doesn’t mean coming home blind drunk every night; it just means taking down
alcohol in some amount. And the payoff isn’t huge, but it is respectable: about 10 percent pay advantage
goes to the wet bunch compared to those workers who stay dry. The really interesting result, though, is
that guys who drink in bars at least once a month get another 7 percent pay advantage on top of the 10
percent. The bad news for drinking women is that for them, going to the bars doesn’t seem to help.
So there are two findings. First, just drinking is better than not drinking for your wallet. Second, at least
for men, drinking socially at bars is even better. One of the study’s authors, Edward Stringham, an
economics professor at San José State University, comments on the second result: “Social drinking builds
social capital. Social drinkers are networking, building relationships, and adding contacts to their
Blackberries that result in bigger paychecks.”
[3]
Saylor URL: http://www.saylor.org/books Saylor.org
353
Now, going back to the blog comment about the drunken uncle, isn’t this more or less what the blogger
sees too? Here are the next lines from the entry:
No senior management wants to promote a boring old fart. They want outgoing people, in and
outside of work. They want social people. If you can display your social abilities to them, it means
that you want more than the 9am to 5pm, thank God, time to go home. They want people who
enjoy working with the company and the people who they work for.
[4]
That sounds reasonable, and it may explain why there’s some serious scientific evidence that partying
with the workmates does, in fact, lead to promotions in the company.
The link between lifting a glass and moving up may be solid, but is it right? From the worker’s side,
there’s not a lot you can do about the situation so you may want to leave some Thursday and Friday
evenings available for happy hour regardless of whether you think that’s the way promotions ought to be
arranged. From management side, however, there is a stark issue here. When you sit down to look at two
candidates in your company for one promotion, do you have a right to consider how well they mix after
hours? Do you have a duty or responsibility to consider it?
There are two issues:
1. Should you consider a worker’s party aptitude?
2. If you do, how should you manage it?
The reasons for not considering party ability are many. Two stand out. First, workers are being paid for
what they do from nine to five. That’s the job. If you’re going to start considering other things, then why
stop at parties? You could give the promotion to the better player on the company softball team, or the
one who’s got curlier hair, or whatever. Second, workers may not have an equal opportunity to party. The
guy who lives closer to work and isn’t married obviously holds an advantage over the guy who has diabetes
when gin and tonics become job qualifications.
On the other hand, when workmates gather after work to drink, what do they talk about? Well, work.
That’s why people say a new advertising campaign or a fresh product idea got scratched onto a napkin. It’s
not a metaphor. Further, the ability to labor together with others—teamwork—that’s a real job
qualification, and it’s reasonable to suppose that people who get along well drinking will carry the
camaraderie over to the next morning’s breakfast meeting (where coffee and tea are served). This explains
Saylor URL: http://www.saylor.org/books Saylor.org
354
why companies including Deloitte Consulting encourage and even to some extent pressure employees to
socialize outside the office.
[5]
Finally, it’s a hard call—there are reasonable arguments to be made on both sides. It’s also difficult to be
absolutely certain how the party qualification should be managed if it’s included in the performance
evaluation. On one hand, a strong case can be made for transparency and openness, for simply stating
that after-hours socializing is, in fact, a part of the job. To not inform workers, the argument goes, that
hanging out is a job requirement is really a form of lying: it’s dishonest because the default understanding
typical employees are going to have is that what counts in determining the quality of work is the work,
period. Whether the assigned task got outlined in a cubicle or on a bar stool is irrelevant. Therefore, any
manager who secretly totes up the social aptitude of the workers is not being honest about the way
workers are graded. It’s the equivalent of a college teacher assigning grades partially based on class
participation without listing that in the syllabus.
On the other hand, all teachers know that listing class participation as part of a student’s grade can lead to
brown nosing, and there’s a similar threat in the workplace: if employees are told to party, then at least a
few are going to tag along for drinks even when they really don’t want to go and end up souring the
evening for everyone. If you as a manager believe in honesty above all, then you may accept that cost. On
the other hand, if your vision of corporate responsibility dovetails more closely with profit maximization,
you may be able to build an ethical case around the idea that in the name of evaluating employees as
perfectly as possible some elements of that evaluation may have to remain close to the vest.
Three Considerations for Promotion: Work Performance, Seniority, Projected
Work Performance
When managing a promotion, there are three fundamental considerations; work performance is the most
obvious. The person most deserving to step up to a higher level of responsibility is the one who’s best
managed current responsibilities. This may be measured by accounts won, contributions to a larger
group, or some other work-related factor, but the key is that the measured performance be related with
the job.
The problem comes in determining exactly what that word related means. When read narrowly, it means
that the employee who looks best on paper—the one who’s written the best reports, achieved the highest
Saylor URL: http://www.saylor.org/books Saylor.org
355
sales, won the most cases—will be the most deserving. When read broadly, however, the range of
considerations can expand dramatically to include contributions having to do with personality, chemistry,
and other characteristics tangential to nine-to-five tasks. This is where questions about going out for
drinks after work start to gain traction and importance. Finally, it’s not clear that after-hours socializing
should be considered part of work performance, but the fact that it can be included shows how broad this
category is.
The second consideration when weighing a promotion is seniority. Seniority is preference for promotion
granted to the person who’s been with the company the longest. A strong or pure seniority system simply
reduces the choice to comparisons of time with the firm: the promotion goes to the longest-serving
employee. There’s a taste of fairness here since no one will be overlooked for a job because of a personal
conflict with the boss, or because he doesn’t smile enough at work, or because her skirt is too short or his
necktie too absurd or whatever. More, there’s an inherent tranquility in the fact that all employees know
exactly where they stand. The connected problem, obviously, is that good work is not directly rewarded.
This explains why the seniority system seems especially suited to production line jobs or any kind of labor
where experience is more important than analytic skills, high-level training, or creativity. If it’s true that
experience is what matters on a job, then a seniority system should produce promotions that more or less
dovetail with expertise and the ability to do a good job.
A weak seniority system considers time with the company as a positive element, but only as one
component in evaluating candidates for a promotion. The advantage of this kind of system is the
encouraging of worker loyalty. The retention of good workers is nearly the highest human resources
priority of any company, and rewarding seniority plus performance gives good workers a reason to stick
around. Equally important, it helps retain good, loyal workers without forcing the company to promote
old-timers who’ve never really learned to get the job done well.
The third promotion consideration is projected performance, which evaluates candidates in terms of what
they’ll be able to do in the future. A tool used by companies to groom young people for future leadership
roles, the escalation normally goes to highly qualified individuals currently working at a level beneath
their ability. For example, a health insurance company may hire a college graduate with a strong premed
profile and hope to keep that person out of medical school by pulling her up the career ladder at a crisp
rate. She simply doesn’t have the experience, however (no one does), to just start near the top. In order
Saylor URL: http://www.saylor.org/books Saylor.org
356
for her to play a leadership role in the future, she does need to be familiar with how the company works at
every level, including the lowest. That means spending some time on the front lines, say, manning
telephones, answering questions from (frequently frustrated or angry) customers. Of course it’s difficult to
really stand out in this kind of work, so if she’s going to move up, it’s going to have to be because she’s
expected to stand out at something more demanding later on.
Other employees are going to be tempted to resent the rapid ascension since many of them have done just
as well at the same job for a longer time. Within the narrow view of performance evaluation (your job
performance equals how well you do the work) their resentment is justified. The rule of equal treatment is
being severely broken. But if you’re in management, you have a responsibility to the company (and to
shareholders if the company is public) to be successful. And you need to face the problem that highly
educated and qualified young people have options. Arguably, retaining them is a higher priority—not just
financially but also ethically—than keeping more replaceable talent content.
K E Y T A K E A W A Y S
Work performance is defined in diverse ways, and managers may have a right to consider after-hours
activities as part of that definition.
Three common criteria for awarding promotions are seniority, work performance, and projected
performance. Each contains specific ethical tensions.
R E V I E W Q U E S T I O N S
1. Why might someone’s social skills be considered a factor in receiving a promotion?
2. What are some advantages and disadvantages of seniority promotion?
3. Why might a promotion be based on projected performance?
Saylor URL: http://www.saylor.org/books Saylor.org
357
[1] Maya, “Alcohol: Income Booster?,” Monster (blog), September 20, 2006, accessed May 24,
2011, http://monster.typepad.com/monsterblog/2006/09/alcohol_ income_.html.
[2] Bethany L. Peters and Edward Stringham, “No Booze? You May Lose,” Reason Foundation, September 1, 2006,
accessed May 24, 2011,http://reason.org/news/show/127594.html.
[3] Bethany L. Peters and Edward Stringham, “No Booze? You May Lose,” Reason Foundation, September 1, 2006,
accessed May 24, 2011,http://reason.org/news/show/127594.html.
[4] Maya, “Alcohol: Income Booster?,” Monster (blog), September 20, 2006, accessed May 24,
2011, http://monster.typepad.com/monsterblog/2006/09/alcohol_ income_.html.
[5] Deloitte Consulting: WetFeet Insider Guide (San Francisco: WetFeet), accessed May 24,
2011, http://www.wellesley.edu/Activities/homepage/consultingclub/wetfeet%20-%20deloitte_consulting .
Saylor URL: http://www.saylor.org/books Saylor.org
358
8.4 Firing
L E A R N I N G O B J E C T I V E S
1. Define legal guidelines on firing employees.
2. Elaborate justifiable reasons for deciding to fire.
3. Set standards for the actual firing process.
4. Consider ways of limiting the need to terminate employees.
Optimal Level Firing
A study funded by the CATO Institute and titled “The Federal Government Should Increase Firing Rate”
concludes this way: “The rate of ‘involuntary separations’ is only about one-fourth as high in the federal
government as in the private sector. No doubt private-sector firing is below optimal as well since firms are
under threat of expensive wrongful discharge lawsuits.”
[1]
There is, in other words, an optimal level for firing, and in both the public and private sectors it’s not
being met. People aren’t being fired enough.
The strictly economic question here is, “What is the optimal firing level?” No matter the answer, there’s an
ethical implication for the workplace: firing workers is a positive skill. For managers to perform well—for
them to serve the interest of their enterprise by maximizing workplace performance—the skills of
discharging employees must be honed and applied just like those of hiring and promoting.
On the ethical front, these are the basic questions:
When can an employee be fired?
When should an employee be fired?
How should an employee be fired once the decision’s been made?
What steps can management take to support workers in a world where firing is inevitable?
When Can an Employee Be Fired?
In the world of for-profit companies, most work contracts offer at-will employment. Within this scheme, a
clause is written into the contract offering employment only as long as the employer desires. Stated more
Saylor URL: http://www.saylor.org/books Saylor.org
359
aggressively, managers may discharge an employee whenever they wish and for whatever reason. Here’s a
standard version of the contractual language:
This is an “At Will” employment agreement. Nothing in Employer’s policies, actions, or this
document shall be construed to alter the “At Will” nature of Employee’s status with Employer,
and Employee understands that Employer may terminate his/her employment at any time for
any reason or for no reason, provided it is not terminated in violation of state or federal law.
The legal parameters for firing seem clear.
Things blur, however, once reality hits. As the Cato study authors note, simply the fear of a possible
lawsuit does impinge to some extent on the freedom to fire, especially when the discharged worker fits
into a protected group. This means older workers, foreigners, or disabled workers may protest that no
matter what reasons are given for termination—assuming some are given—the real reason is their age,
nationality, or disability. Further, gender protection may be claimed by women fired from largely male
companies and vice versa.
Another round of blurring occurs on the state level where legislation sometimes adds specific employee
protections, and so curtails employers’ rights. In Minnesota, for example, firing may not be based on a
worker’s participation in union activities or the performance of jury duty.
These varied and frequently changing legal protections are the reason managers are typically instructed to
keep detailed records of employee performance. If those can be produced to show a pattern of
incompetence or simply inadequate results, they can justify a dismissal before a judge, if it ever comes to
that.
Even though legal complexities mean managers are well advised to be careful about firing workers, and
it’s prudent to be sure that there are directly work-related reasons for the dismissal, none of that changes
the fact that at-will hiring gives wide latitude to the company, and fired workers are typically left with few
good avenues of protest. One way to see how tilted the table is toward the employer and away from the
employee is to compare the American at-will firing system with the European model, where a reasonable
cause for termination must be demonstrated. In the United States, employers may more or less fire
anyone for any reason, and the burden of showing the termination was illegal or unfair falls entirely on
the worker. In Europe, by contrast, the legal burden falls largely on the employer. Instead of the worker
having to show the firing was wrong, now the company has to show the firing was right. This is a big deal.
Saylor URL: http://www.saylor.org/books Saylor.org
360
It’s like the difference between innocent until proven guilty and guilty until proven
innocent. Just because firing means the company holds the burden of proof: it must demonstrate that the
worker wasn’t holding up his or her end of the employment contract. That’s a lot harder to do than just
producing some work evaluations to buttress the claim that she wasn’t fired because she’s Jewish or he
wasn’t let go because he’s Asian. As opposed to the European reality, the conclusion is, employees in the
United States hired at will have little recourse against a company that wants them out.
Finally, it’s worth noting that elements of just cause law have been working their way into the American
legal system in recent years.
When Should an Employee Be Fired?
Because the legal footing is usually more or less solid for American managers, the real hard questions
about terminating employees aren’t legal ones about what can’t be done but ethical ones about what
should be done.
Sometimes firing is unavoidable. Economic slowdowns frequently bring furloughs and terminations.
When the company’s books turn red, and after the entire easy cost cutting has been done, people need to
be cut. Who? There are three broad philosophies:
1. Inverted seniority
2. Workload
3. Recovery preparation
Inverted Seniority occurs when the last worker hired is the first released. This works especially well for
assembly-line-type labor where one worker can replace another easily. As long as replacement is possible,
dismissing the most recently hired allows clear and impersonal rules to make downsizing orderly.
Workload firings focus the pain of job cuts on that part of the company suffering most directly from a
falloff in business. An office furniture supply company may find its line of hospital products unaffected by
an economic downturn (people keep getting sick even if they don’t have a job) so layoffs are taken from
other divisions. This may mean losing workers with higher seniority or better job performance, but it
minimizes cash-flow disruption.
Recovery preparation takes the long view on an economic slowdown: firings and layoffs are executed not
so much to compensate for the present downturn but to sharpen the company for success when the
Saylor URL: http://www.saylor.org/books Saylor.org
361
economy bounces back. Staying with the office furniture supply company, the owner may see better long-
term opportunities for profits in the nonhospital units, so the downsizing may occur across the board. The
idea is to keep those slow-moving units at least minimally prepared to meet new demand when it
eventually comes.
Sometimes economic slowdowns don’t reflect a problem with the larger economy, they’re the result
of fundamental changes in the market, frequently brought on by technological advance. For example, the
popularization of digital photography has shrunk the market for old fashioned film. Seeing this coming,
what can a company like Kodak do? They’re probably going to let workers from the old film side go to
create room for new hires in the digital division. This is potentially unfair to terminated workers because
they may be doing exemplary work. Still, it would be unfair—and financially disastrous—to the company
as a whole to not change with the times.
Rank and yank is a management philosophy promoted by former General Electric Company CEO Jack
Welch. Every year, he counsels, the entire workforce should be ranked and the bottom 10 percent
(“There’s no way to sugarcoat this,” he says) should be fired to make room for new employees who may be
able to perform at a higher level. Here, the responsibility to the company is being weighed far heavier than
the one to the employee because, theoretically at least, those in the bottom 10 percent may be doing fine
on the job—fulfilling their responsibilities adequately—it’s just that others out there who could be hired to
replace them may do it better. In the hope they will, workers who’ve done nothing wrong are sacrificed.
[2]
There are two main criticisms of this practice. First, it’s a betrayal of employees who are fulfilling their
contractual obligations (they’re just not over performing as well as others). Second, it’s counterproductive
because it lowers morale by drowning workers in the fear that even though they’re doing what’s being
asked, they may end up in that dreaded bottom 10 percent.
Employee misbehavior is the least controversial reason to fire a worker. Here, the ethics are relatively
clear. Employees aren’t being mistreated when they’re dismissed because it’s their own actions that lead
to their end. Standard definitions of misbehavior include
rudeness toward clients or customers,
drinking or drugs on the job,
theft of company property or using company property for personal business,
frequent and unexplained absences from work,
Saylor URL: http://www.saylor.org/books Saylor.org
362
entering false information on records,
gross insubordination,
fighting or other physical aggression,
harassment of others (sexual, sexual orientation, religious, racial, and similar).
How Should an Employee Be Fired Once the Decision’s Been Made?
At the Friday all-staff meeting the office manager stands up to announce, “The good news is the following
people have not been fired!” He reads a list of seventeen names. There are nineteen people at the meeting.
That’s from a (perhaps unemployed) comic’s stand-up routine. Unfortunately, people have written into
the CNNMoney.com with real stories that aren’t so far removed:
An employee received news of her firing in a curt letter delivered to her home by FedEx.
A man tells of being halted at the building door by security and being humiliatingly sent away.
People report that they arrived at their office to find the lock changed and their stuff thrown in a box
sitting on the floor.
[3]
All these are inhumane firings in the sense that no flesh and blood person took the trouble to present the
bad news.
It’s easy to understand why inhumane firings occur: not many people enjoy sitting down with someone
and telling them they’re out. So it’s tempting to yield to cowardice. Instead of facing the worker you’ve
fired, just drop a note, change the lock, and talk to security. On the ethical level, however, firing an
employee is no different from working with an employee: as a manager, you must balance your duties to
the company and the worker.
How can the manager’s duty to the organization be satisfied when terminating a worker? First, to the
extent possible, the fired person should leave with a positive impression of the organization. That means
treating the employee with respect. No mailed notices of termination, no embarrassing lockouts, just a
direct, eye-to-eye explanation are probably the most reliable rule of thumb.
Second, the terminated employee should not be allowed to disrupt the continued work of those who
remain. If deemed necessary, security personnel should be present to ensure the ex-worker leaves the
premises promptly. Also, if the worker is involved in larger projects, a time for severance should be found
when their contribution is minimal so that other members of the team will be able to carry on near
Saylor URL: http://www.saylor.org/books Saylor.org
363
normally. (It may be recommendable to arrange the termination to coincide with the finishing of a larger
project so that everyone may start fresh with the new, substitute employee.)
Third, the financial costs of the termination should be minimized. This means having clear reasons for the
termination and documents (pertaining to worker performance or behavior) supporting the reasons to
guard against lawsuits. Also, there should be clear understandings and prompt payment of wages for work
done, as well as reimbursements for travel expenses and the full satisfaction of all monetary obligations to
the employee. This will allow the human resources department to close the file.
With duties to the company covered, how can the manager’s duty to the employee be satisfied?
Consultants—both legal and ethical—typically share some bullet-point answers. First, the employee
should be addressed honestly and directly with a clear explanation for termination. Speak firmly, the
advice is; don’t waver or provide any kind of false hope. Further, the termination should not come as a
total surprise. Previous and clear indications should have been given concerning employee performance
along with specific directions as to what areas require improvement. Many companies institute a structure
of written warnings that clearly explain what the employee’s job is and why their work is not meeting
expectations.
Second, getting fired is embarrassing, and steps should be taken to minimize the humiliation. The
employee should be the first to know about the discharge. Also, the severance should occur in a private
meeting, not in view of other workers. To the extent possible, the employee should have an opportunity to
say good-bye to workmates or, if this is the preference, to leave discreetly. For this reason, a meeting late
in the day may be chosen as the appropriate time for notice to be given.
Third, to the extent possible and within the boundaries of the truth, an offer should be extended to
provide a recommendation for another job.
Fourth, make sure the employee gets all the money coming for work done, without having to jump
through hoops.
What Steps Can Management Take to Support Workers in a World Where Firing
Is Inevitable?
One response to the inescapable reality that firing happens is preemptive; it’s to reduce the moral
uncertainty and hardship before they arise. Two strategies serve this purpose: actions can be
Saylor URL: http://www.saylor.org/books Saylor.org
364
implemented to minimize the occasions when firing will be necessary, and steps can be taken to reduce
the severity of the firing experience for employees when it happens.
In her book Men and Women of the Corporation, Rosabeth Moss Kanter generates a list of measures that
corporations use to diminish firings, and reduce the professional impact for those who are let go. Here’s
an abbreviated selection of her recommendations, along with a few additions:
Recruit for the potential to increase competence, not simply for narrow skills to fill today’s slots.
Rotate assignments: allow workers to expand their competence.
Retrain employees instead of firing them.
Offer learning opportunities and seminars in work-related fields.
Subsidize employee trips to work-related conferences and meetings.
Provide educational sabbaticals for employees who want to return to school.
Encourage independence and entrepreneurship: turn every employee into a self-guided professional.
Keep employees informed of management decisions concerning the direction of the company: What units
are more and less profitable? Which ones will grow? Which may shrink?
Ensure that pensions and benefits are portable.
[4]
K E Y T A K E A W A Y S
At-will firing grants employers broad legal latitude to discharge employees, but it does not erase ethical
concerns.
Justifiable worker firings include cases where workers bear none, some, or all of the blame for the
discharge.
The act of firing a worker requires managers to weigh responsibilities to the organization and to the ex-
employee.
Steps can be taken to limit the need for, and effects of, employee discharge.
R E V I E W Q U E S T I O N S
1. What’s the difference between at-will and just cause firing?
2. How might fundamental changes in the marketplace require a company to fire workers?
Saylor URL: http://www.saylor.org/books Saylor.org
365
3. What is rank and yank?
4. When managers fire employees, what duties do they hold to the organization, and what are the duties to
the dismissed worker?
5. What are some steps organizations can take to protect their workers from the effects of discharge if firing
becomes necessary?
[1] Chris Edwards and Tad DeHaven, “Federal Government Should Increase Firing Rate,” Cato Institute, Tax and
Budget, no. 10 (November 2002), accessed May 24, 2011,http://www.cato.org/pubs/tbb/tbb-0211-10 .
[2] Allan Murray, “Should I Rank My Employees?,” Wall Street Journal, accessed May 24,
2011, http://guides.wsj.com/management/recruiting-hiring-and-firing/should-i- rank-my-employees.
[3] “Worst Ways to Get Fired,” CNNMoney.com, September 6, 2006, accessed May 24,
2011, http://money.cnn.com/blogs/yourturn/2006/09/worst-ways-to-get-fired.html.
[4] List adapted from Rosabeth Moss Kanter, Men and Women of the Corporation (New York: Basic Books, 1993),
Saylor URL: http://www.saylor.org/books Saylor.org
366
8.5 Case Studies
Fashionable
In her blog Love This, MJ (full name not provided) relates that she’s been an aspiring clothes designer
since she started sewing tops for her Barbie dolls. Things weren’t going well, though, as she tries to break
into the industry. One thing she notices is that there aren’t a lot of female fashion designers out there—
Vera Wang, Betsey Johnson, and a few more. Not many. So she starts trying to figure it out with questions
like these:
Do women want straight guy designers to dress them because they dress to please the men? It could make
sense: what that designer likes, the man in her life is going to love too.
Do women prefer gay men to dress them because gay men are their new girlfriends? Gay men are usually
more receptive to trends and physical appearances too.
Do women prefer women designers because she knows a woman’s body better?
Do men have the same issue? Do some men prefer a lesbian designer? Would they balk at being dressed
by a gay designer?
[1]
Q U E S T I O N S
1. Assume MJ is right when she hypothesizes that most women like straight male designers because straight
guys are the ones they’re trying to impress, so they want clothes straight guys like. Now imagine you’ve
been put in charge of a new line of women’s clothes. Your number one task: sales success. You’ve got five
applicants for the job of designing the line. Of course you could just ask them all about their sexual
Ima
ge re
mov
ed d
ue to
cop
yrig
ht is
sues
.
Saylor URL: http://www.saylor.org/books Saylor.org
367
orientation(s), but that might leave you open to a discrimination lawsuit. So could you devise a test for
new applicants that’s fair—that gives everyone an equal chance—but still meets your requirement of
finding someone who produces clothes that straight guys get excited about?
2. Four standard filters for job applicants are
o education level,
o high-risk lifestyle,
o criminal record,
o flamboyant presence in social media.
Which of these might be used to winnow out applications for a job as a clothes designer? Explain
in ethical terms.
3. MJ wonders whether women might prefer women designers because she knows a woman’s body better. Is
there a bona fide occupational qualification for a women’s fashion company to hire only women
designers? Is there a difference between a BFOQ based on sex and one based on sexual orientation?
4. MJ asks, “Do women prefer gay men to dress them because gay men are their new girlfriends?” Assume
you think there’s something to this. Could you design a few behavioral interview questions that test the
applicants’ ability to become girlfriends (in the sense that MJ means it) with their clients? Would these be
ethically acceptable interviews, or do you believe there’s something wrong and unfair about them?
God at Work
Image
remov
ed due
to cop
yright
issues.
Saylor URL: http://www.saylor.org/books Saylor.org
368
The University of Charleston is a private, nonreligious institution with a very particular job opening: the
Herchiel and Elizabeth Sims “In God We Trust” Chair in Ethics. According to the job description, the
successful candidate for this job as a professor “must embrace a belief in God and present moral and
ethical values from a God-centered perspective.”
[2]
Q U E S T I O N S
1. You’re in charge of getting applicants for this post and you’ve got a small advertising budget. What ethical
responsibilities should you consider when determining where to place the ad? How broadly should you
advertise the position?
2. According to Erwin Chemerinsky, a law professor at Duke University, “The description that
‘candidates must embrace a belief in God and present moral and ethical values from a God-
centered perspective,’ violates the Civil Rights Act as religious discrimination in
employment.”
[3]
Imagine you’re in charge of every step of the process of filling this job. How
could you respond in terms of
o bona fide occupational qualifications (BFOQs),
o testing,
o interviewing?
3. You’re the university president. The person who currently holds the In God We Trust
Professorship has, by all accounts, been doing a mediocre to poor (but not directly unacceptable)
job. One day you happen to trip across the person’s blog page and notice that your professor
claims to be a sadist and practices a mild form of devil worship (also, the prof’s favorite movie
is The Omen). Right now the In God We Trust Professor of ethics is down the hall lecturing to
seventy-five undergrads. You sneak to the door and listen from outside. The professor sounds just
like always: dull and passionless, but the talk is about the Bible, and nothing’s being said that
seems out of line with the job description. Still, you decide to terminate the relationship.
o In a pure at-will working environment, you can just fire the professor. But imagine you want to
demonstrate just cause. How does this change the way you approach the situation? What would
your just causes be?
Saylor URL: http://www.saylor.org/books Saylor.org
369
o The professor’s classes are passionless because he doesn’t believe in what he’s teaching. Still, his
teachings are not directly wrong. Does this case show why a manager may be ethically required in
certain situations to implement a strategy of rank and yank?
Explain.
Testing Baseball Players’ DNA
The New York Times reports that there’s a “huge difference between sixteen and nineteen years old,”
when you’re talking about prospects for professional baseball. A kid whose skills knock your socks off for a
sixteen-year-old just looks modestly good when he practices with nineteen-year-olds.
[4]
This is a significant problem in the Dominican Republic, which produces excellent baseball players but
little in the way of reliable paperwork proving who people really are and when they were born. The
Cleveland Indians learned all about that when they gave a $575,000 bonus to a seventeen-year-old
Dominican named Jose Ozoria, only to later find out he was actually a twenty-year-old named Wally
Bryan.
This and similar cases of misidentification explain why baseball teams are starting to apply genetic tests to
the prospects they’re scouting. Typically, the player is invited to provide a DNA sample from himself and
his parents to confirm that he’s no older than he claims. The player pays for the test and is reimbursed if
the results show he was telling the truth.
Ima
ge r
emo
ved
due
to c
opy
righ
t iss
ues.
Saylor URL: http://www.saylor.org/books Saylor.org
370
Q U E S T I O N S
1. Many experts in genetics consider testing an unethical violation of personal privacy.
o What does it mean to “violate personal privacy”?
o Can a utilitarian argument (the greatest good for the greatest number should be sought) in favor
of DNA testing in the Dominican Republic be mounted? What could it look like?
2. In the baseball world, other tests that clearly are allowed as part of the hiring process include testing a
player’s strength and speed. Is there anything in the fair application of these tests that may ethically
allow—even require—that baseball teams extract DNA to confirm the age?
3. Assume you accept that testing a prospect’s age is a bona fide occupational qualification (after all,
the job is to be a prospect: a developing player, not an adult one). Once you accept that, how do
you draw the line? Couldn’t teams be tempted to use DNA facts for other purposes?
The Times article interviews a coach who puts it this way:
I know [the baseball teams taking the DNA samples] are looking into trying to figure out
susceptibility to injuries, things like that. If they come up with a test that shows someone’s
connective tissue is at a high risk of not holding up, can that be used? I don’t know.
[5]
Can you formulate an ethical argument in favor of teams secretly using DNA tests to do just that,
check for as many yellow and red flags as possible in the young prospect’s genetic code?
4. Baseball scouting—the job of hiring excellent future players and screening out mediocre ones—is very
competitive. Those who do it well are paid well; those who don’t are cycled out quickly to make room for
someone else. You have the job, you have the DNA sample. What do you do? Why?
5. You decide to do the test in question four. The problem is people aren’t trees; you can’t age them
just by counting genetic rings—you also need to do some cross-testing with the parents’ DNA. You
do that and run into a surprise: it turns out that the young prospect’s father who’s so proud of his
athletic son isn’t the biological dad. Now what?
o Is there an argument here against DNA testing, period? What is it?
o Remember, the family paid for the test. Do you have a responsibility to give them these results?
Explain.
Saylor URL: http://www.saylor.org/books Saylor.org
371
6. Lou Gehrig was the first athlete ever to appear on a box of Wheaties. From 1925 to 1939 he played for the
Yankees in every game: 2,130 straight appearances, a record that lasted more than fifty years. He was
voted into the baseball Hall of Fame in 1939. He died in 1941 from a genetic disorder—yes, Lou Gehrig’s
disease—that today’s DNA tests would identify. Is there an ethical argument here against DNA testing of
prospects or one in favor? Or is the argument about this more theoretical—should the rules be decided
regardless of what has actually happened at some time or place? Explain.
7. In a different sport, the sprinter Caster Semenya won the world eight-hundred-meter challenge in 2009
with a time that few men could equal. She looked, in fact, vaguely like a man, which led the International
Athletics Federation to run a genetic gender test. She is, it turns out, neither a woman nor a man; she’s a
hermaphrodite: a little bit of both. Does the fact that genetic tests don’t always return clean, black-and-
white results make their use less advisable from an ethical perspective? Why or
why not?
Windfall at Goldman
Goldman Sachs is an expansive financial services company. Many clients are institutional: private
companies and government organizations wanting to raise cash seek Goldman’s help in packaging and
then selling stock or bonds. On the other side, private investors—wealthy individuals wanting to multiply
their riches—receive a hearty welcome at Goldman because they have the cash to purchase those stocks
and bonds. Ultimately, Goldman Sachs is a hub where large companies, governmental powers, and
wealthy people come and do business together.
Imag
e rem
oved
due
to c
opyr
ight
issue
s.
Saylor URL: http://www.saylor.org/books Saylor.org
372
Executives at Goldman Sachs are among the world’s highest paid. According to a New York Times article,
“At the center of Goldman’s lucrative compensation program is the partnership. Goldman’s partners are
its highest executives and its biggest stars. Yet while Goldman is required to report compensation for its
top officers, it releases very little information about this broader group, remaining tightlipped about even
basic information like who is currently a partner.”
[6]
The rest of the article investigates this shadowy partnership. The conclusions: “Goldman has almost 860
current and former partners. In the last 12 years, they have cashed out more than $20 billion in Goldman
shares and currently hold more than $10 billion in Goldman stock.”
This tally of accumulated wealth in Goldman stock doesn’t even include the standard salary and cash
bonuses the partners receive, but leaving that aside, here’s the math: $30 billion divided by 860 divided
by 12 should give some sense of the wealth each of these corporate stars is accumulating over the course of
a year. To give a provisional idea of how large the number of dollars is here, when you try plugging $30
billion into an iPhone calculator, you find the screen can’t even hold a number that long. Using a different
calculator yields this result: $2.9 million per partner every year.
The 2.9 million can be compared with the salary earned by the average American: $50,000 a year. The
Goldman partner gets that in less than a week. This huge money explains the clawing fight that goes on
inside Goldman to become a partner. The odds are long. Each time the books are opened to admit a new
class, only 1 of 330 Goldman employees makes the cut. It is, in the words of one former partner, “a very
Darwinian, survival-of-the-fittest firm.”
In the public comments section of the New York Times story about Goldman, a person identified as GHP
picks up on the firm’s characterization as a “Darwinian, survival-of-the-fittest” place. He wrote, “The
French revolution was also very Darwinian, let’s give that a try.” During the French Revolution, the
wealthy and powerful were rewarded with a trip to the guillotine.
Probably, GHP isn’t just annoyed about how much money executives at Goldman make, he, like a lot of
people, is peeved by the fact that the company was bailed out by the federal government during the 2008–
9 financial crisis. Had the taxpayers (people making $50,000) not kicked in, Goldman might’ve gone
bankrupt, and all that money its partners accumulated in stock would’ve vanished. As it happens, the US
government’s bailout was masterminded by US Treasury Secretary Henry Paulson. His previous job was
CEO (and partner) at Goldman.
Saylor URL: http://www.saylor.org/books Saylor.org
373
Q U E S T I O N S
1. Goldman is dominated by a “Darwinian, survival-of-the-fittest” mentality. What does that mean?
o In ethical terms, how can this mentality be justified?
o Would a company dominated by this mentality, whether it’s Goldman or not, be more likely to
announce job openings to a limited public, or as a massive public announcement? Why?
2. Describe the advantages of a “behavioral interview.” If you were in charge of hiring for a company seeking
employees who flourish in a survival-of-the-fittest environment, what kind of question might you ask in a
behavioral interview? Why?
3. One contributor to the New York Times comments section writes, “There are sure to be lots of
pointed, angry posts about how unfair it is that these guys make so much money etc. But if we are
honest, there is a fair amount of envy and pure remorse that we weren’t bright enough to go
down that path! And these guys are very bright.”
How could these comments be construed to explain why high wages and big bonuses are used by
Goldman to motivate its workers? What is it that makes big money (or the possibility of big
money) function as a powerful motivator to encourage employees to work hard and well?
Ethically, how can this use of big money be justified?
4. One difference between offering an employee a wage increase and offering a bonus is that the
latter doesn’t come automatically the next year. The employee has to earn it from scratch all over
again.
o Why might managers at Goldman award their best workers with a bonus instead of a wage
increase?
o By appeal to an ethical theory, could you make the case that, in general, employees should be
paid mainly through a bonus system? How would the theory work at two extremes: wealthy
Goldman executives and waitresses at a corner diner?
5. Given the kind of work that’s done at Goldman—bringing wealthy people and powerful organizations
together to make deals—why might party aptitude (the ability to mix socially after hours) be considered
when deciding who does and who doesn’t make partner at Goldman? How could that decision be justified
ethically? How could it be criticized ethically?
Saylor URL: http://www.saylor.org/books Saylor.org
374
6. Make the case that in theoretical terms, managers at Goldman have an ethical responsibility to institute
the process of rank and yank.
The Five O’Clock Club
A Washington Post story about firing employees relates that some companies use “the surgical method:
terminations that last about 15 seconds, after which former employees are ushered off company
property.”
[7]
It doesn’t have to be that way, though. For about $2,000 per fired employee, the outplacement company
Five O’Clock Club will help employers manage the actual termination moment more compassionately.
Later on, the fired worker receives a year of career coaching to help get back on track.
What do the Five O’Clock Club recommend managers do at the critical moment when giving the bad
news? To answer, according to the Post, they offer a booklet titled How to Terminate Employees While
Respecting Human Dignity, which “asks managers to approach layoffs with the understanding that,
‘unlike facilities and equipment, humans have an intrinsic worth beyond their contribution to the
organization.’”
[8]
Then some catchphrases are provided for managers to use:
George, you’ve been a trooper. I’m sorry that this organization has moved in a different direction.
George, you have made many good friends here. We hope those friendships will continue.
George, you have made considerable and long-lasting contributions and they are acknowledged and
appreciated.
[9]
Imag
e rem
oved
due
to c
opyr
ight
issue
s.
Saylor URL: http://www.saylor.org/books Saylor.org
375
Five O’Clock Club vice president Kim Hall—who downs a lot of Tylenol and coffee on the job—relates
several other phrases that may be helpful:
I know this is hard, but you’ll get back on your feet.
The timing could actually work in your favor. A lot of people take vacation in the summer. There’s no
competition for job hunters.
Maybe this is a chance to begin your dream career. Follow your heart.
[10]
In sum, the Five O’Clock Club helps workers feel better when they’re fired, and helps them get on with
their lives. Meanwhile, employers get a hedge against lawsuits. The outplacement service, according to the
Five O’Clock Club literature, “can redirect anger or anxiety away from the organization and…encourage
the newly-fired to sign their severance agreements so they can get on with their lives.”
[11]
Q U E S T I O N S
1. The Five O’Clock Club charges $2,000 per firing. If you were fired, would you prefer to receive the
compassionate end the Five O’Clock Club provides, or just get shown the door but also get to keep
that $2,000 for yourself?
o If you’re the boss, do you have the right to decide this for the fired employee? Why or why not?
o If you’re the boss, do you have the responsibility to decide this for the fired employee? Why or
why not?
2. According to the Five O’Clock Club, “Unlike facilities and equipment, humans have an intrinsic
worth beyond their contribution to the organization.”
o Does this sound like utilitarian ethical thinking to you, or is it more in line with the notion of an
ethics guided by basic duties and rights? Why?
o Probably, everyone agrees that humans aren’t just machines that can be installed and replaced.
But can an ethical argument be made to treat people in the workplace as machines—that is, to
abruptly hire them when they’re useful and fire them when they’re not? What ethical theory (or
theories) could help you make the case?
3. In general terms, here are three firing situations:
Saylor URL: http://www.saylor.org/books Saylor.org
376
o an economic downturn (good workers are sacked because the company can’t afford to keep
them)
o rank and yank (workers are fulfilling their duties but not as well as most of the others)
o misbehavior (a worker is fired directly because of something done or not done)
Looking at these three contexts and the Five O’Clock Club, do you think their services should be
hired in all three situations? Do the ethics of firing change depending on why the person is being
fired? Explain.
4. Recall some of the Five O’Clock Club’s pre-packed firing sentences:
o George, you’ve been a trooper. I’m sorry that this organization has moved in a different direction.
o George, you have made many good friends here. We hope….
o George, you…are acknowledged and appreciated.
o Maybe this is a chance to begin your dream career. Follow your heart.
The contrasting method of firing employees—the surgical method—is to look the person in the
eye, say you’re fired, and have security march the ex-employee out the door, all in less than a
minute.
o Is it possible to make the case that the surgical method is actually more compassionate and
respectful?
o Is there a place for compassion in business? From a manager’s perspective, how should
compassion be defined within a business context?
5. Maybe the Five O’Clock Club gets hired because a company really wants to help and support fired
employees. Or maybe the company doesn’t really care about them; all they want is to avoid wrongful
termination lawsuits. Ethically, does it matter why the company contracts the Five O’Clock Club? Explain.
[1] “Sexual Orientation in the Fashion Industry,” Love This! (blog), accessed May 24,
2011,http://lovethis.wordpress.com/2007/07/28/sexual-orientation-in-the-fashion-industry.
[2] Rob Capriccioso, “Divinely Inspired Bias?,” Higher Ed, March 1, 2006, accessed May 24,
2011, http://www.insidehighered.com/news/2006/03/01/charleston.
Saylor URL: http://www.saylor.org/books Saylor.org
377
[3] Rob Capriccioso, “Divinely Inspired Bias?,” Higher Ed, March 1, 2006, accessed May 24,
2011, http://www.insidehighered.com/news/2006/03/01/charleston.
[4] Michael S. Schmidt and Alan Schwarz, “Baseball’s Use of DNA Raises Questions,” New York Times, July 21, 2009,
accessed May 24, 2011,http://www.nytimes.com/2009/07/22/sports/baseball/22dna.html?hp.
[5] Michael S. Schmidt and Alan Schwarz, “Baseball’s Use of DNA Raises Questions,” New York Times, July 21, 2009,
accessed May 24, 2011,http://www.nytimes.com/2009/07/22/sports/baseball/22dna.html?hp.
[6] Susanne Craig and Eric Dash, “Study Points to Windfall for Goldman Partners,” New York Times, January 18,
2011, accessed May 24, 2011,http://dealbook.nytimes.com/2011/01/18/study-points-to-windfall-for-goldman-
partners/?hp.
[7] Eli Saslow, “The Art of Letting Employees Go,” Washington Post, August 9, 2009, accessed May 24,
2011, http://www.washingtonpost.com/wp-
dyn/content/article/2009/08/08/AR2009080802659.html?hpid=topnews.
[8] Eli Saslow, “The Art of Letting Employees Go,” Washington Post, August 9, 2009, accessed May 24,
2011, http://www.washingtonpost.com/wp-
dyn/content/article/2009/08/08/AR2009080802659.html?hpid=topnews.
[9] Eli Saslow, “The Art of Letting Employees Go,” Washington Post, August 9, 2009, accessed May 24,
2011, http://www.washingtonpost.com/wp-
dyn/content/article/2009/08/08/AR2009080802659.html?hpid=topnews.
[10] Eli Saslow, “The Art of Letting Employees Go,” Washington Post, August 9, 2009, accessed May 24,
2011, http://www.washingtonpost.com/wp-
dyn/content/article/2009/08/08/AR2009080802659.html?hpid=topnews.
[11] Eli Saslow, “The Art of Letting Employees Go,” Washington Post, August 9, 2009, accessed May 24,
2011, http://www.washingtonpost.com/wp-
dyn/content/article/2009/08/08/AR2009080802659.html?hpid=topnews.
- Structure Bookmarks
Chapter 8: Manager’s Ethics: Getting, Promoting, and Firing Workers
Chapter 8: Manager’s Ethics: Getting, Promoting, and Firing Workers
Chapter 8: Manager’s Ethics: Getting, Promoting, and Firing Workers
Chapter 8: Manager’s Ethics: Getting, Promoting, and Firing Workers
from The Business Ethics Workshop was adapted by Saylor Academy and is available under a
Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported
Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported
license without attribution as requested by the work’s original creator or licensor.
Chapter 7: Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5 from
The Business Ethics Workshop was adapted by Saylor Academy and is available under a
Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported license without
attribution as requested by the work’s original creator or licensor. UMGC has modified this work
and it is available under the original license.
http://www.saylor.org/site/textbooks/The%20Business%20Ethics%20Workshop
https://creativecommon
s.
org/licenses/by-nc-sa/3.0/
https://creativecommons.org/licenses/by-nc-sa/3.0/
Saylor URL: http://www.saylor.org/books Saylor.org
277
Chapter 7
Employee’s Ethics: Making the Best of the Job You
Have as You Get from 9 to 5
Chapter Overview
Chapter 7 “Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5” examines
some ethical decisions facing employees. It considers the values guiding choices made over the course of a
workday.
Saylor URL: http://www.saylor.org/books Saylor.org
278
7.1 Taking Advantage of the Advantages: Gifts, Bribes, and
Kickbacks
L E A R N I N G O B J E C T I V E S
1. Define a conflict of interest.
2. Show how gifts in the business world may create conflicts of interest.
3. Delineate standard practices for dealing with gifts.
4. Consider how receiving gifts connected with work may be managed ethically.
5. Define bribes and kickbacks in relation to gifts.
6. Show how the ethics of bribes and kickbacks can be managed inside the ethics of gifts.
Living the High Life
If you’re young, looking for work, and headed toward a big city (especially New York), then you could do a
lot worse than landing a job as a media buyer for an advertising agency. According to an article in New
York magazine, it’s working out well for twenty-four-year-old Chris Foreman, and it’s working out despite
a salary so measly that he can’t afford his own place, a ticket to a movie, or even to add meat to his
homemade spaghetti.
[1]
This is what makes the job click for Foreman: as a media buyer, he oversees where big companies like
AT&T place their advertisements. And because those ads mean serious money—a full page in a glossy,
top-flight magazine costs about five times what Foreman earns in a year—the magazines line up to throw
the good life at him. Thanks to the generosity of Forbes magazine, for example, Foreman spends the
occasional evening on the company’s vast Highlander yacht; he drinks alcohol almost as old as he is,
munches exquisite hors d’oeuvres, and issues orders to white-suited waiters. While guests arrive and
depart by helicopter, Foreman hobnobs with people the rest of us see only on movie screens. A scan of the
Highlander guest book turns up not just celebrities but serious power too: Margaret Thatcher was a guest
once.
A night on the Highlander is a good one, but it’s far from the only event lighting up Foreman’s glitzy life. A
few of his other recent outings are listed in the article, with some estimated cash values attached: An all-
Saylor URL: http://www.saylor.org/books Saylor.org
279
expenses-paid ski weekend (worth almost $1,000, in Foreman’s estimation); tickets to see Serena
Williams at the US Open ($75 each); invites to the Sports Illustrated Swimsuit Issue party, where he
chatted with Heidi Klum and Rebecca Romijn-Stamos; prime seats for sold-out Bruce Springsteen
concerts ($500 each); dinners at Cité, Sparks, Il Mulino, Maloney & Porcelli, and Monkey Bar, to name a
few of his favorites ($100 a pop).
Foreman observes the irony of his life: “It’s kind of crazy, I had dinner at Nobu on Monday [the kind of
restaurant few can afford, even if they’re able to get a reservation], but I don’t have enough money to buy
socks.”
[2]
The Highlander’s spectacularly wealthy owner is Steve Forbes. If he invites former British Prime Minister
Margaret Thatcher aboard for a holiday weekend, you can understand why: she’s not just an interesting
person; she’s living history. Serena Williams would be an interesting guest, too, in her way. The same goes
for Heidi Klum and Ms. Romijn-Stamos, in a different way. What they all have in common, though, is that
you know exactly what they’ve got, and why a guy with a big bank account would treat them to an evening.
But what, exactly, does Mr. Forbes expect to get in return for inviting media buyer Chris Foreman? The
answer: “We media buyers are the gatekeepers—no one at AT&T actually purchases the ads. If at the end
of a buying cycle, your budget has an extra $200,000, you’ll throw it back to the person who treated you
best.”
[3]
The answer, in a word, is money.
What’s Wrong with Gifts and Entertainment?
The fundamental problem with the gifts Foreman received and the free entertainment he enjoyed is that
they create a conflict of interest, a conflict between professional obligations and personal welfare. As a
paid media buyer, it’s Foreman’s job and obligation to buy ads in the magazines that will do his clients the
most good, that’ll deliver the biggest bang for the buck. But against that, as a single twenty-four-year-old
guy in New York City, it’s in his personal interest to purchase ads in Forbes magazine since that probably
gets him invited back to the Highlander with its free drinks, exquisite dinners, and, if he’s lucky, some face
time with women he’s already seen quite a bit of in Sports Illustrated. This is a tough spot, and there are
two broad ways it can play out:
Saylor URL: http://www.saylor.org/books Saylor.org
280
1. Foreman can do the parties at night, go home, sleep, wake up with a clear head, and buy the best ads for
his client. Let’s say the advertising money he’s spending belongs to AT&T and they’re trying to attract new
clients in the forty-five to fifty-five demographic of heavy cell phone users. He takes that target, checks to
see what magazine those people like to read more than any other, and buys a full pager there. If the
magazine happens to be Forbes, great, if not, then Forbes doesn’t get anything back for its party. In this
case, Foreman knows he’s done right by AT&T and his employer. To the best of his ability, he guided
advertising money to the spot where it’ll do the most good. There remains a potential problem here,
however, which is the appearance of a conflict of interest. Even though Foreman didn’t let the parties
affect his judgment, someone looking at the whole thing from outside might well suspect he did if it
happens that Forbes gets the ad buy. This will be returned to later on in this chapter.
2. The darker possibility is that Forbes isn’t the best media buy, but they get the ad anyway because
Foreman wants to keep boarding the Highlander. In this case, Foreman is serving his own interest but
failing his obligations to his employer and to his client.
In pure ethical terms, the problem with the second possibility, with selling out the client, can be reduced
to an accusation of lying. When Foreman or any employee signs up for a job, shows up for work, and then
accepts a paycheck, they’re promising to be an agent for the organization, which is formally defined in
commercial law as someone acting on behalf of the organization and its interests. In some situations it
can be difficult to define exactly what those interests are, but in Foreman’s it’s not. He does well for his
employer when he gives the clients the best advice possible about spending their advertising dollars.
That’s his promise and he’s not fulfilling it.
Redoubling the argument, in the case of the typical media buyer, there’s probably also an explicit clause in
the employment contract demanding that all media advice be objective and uncorrupted by personal
interest. Even without that formal step, however, the shortest route to an ethical condemnation of buying
ads because a night on the Highlander (or some other gift) has been received is to underline that the act
turns the media purchaser into a liar. It makes him or her dishonest every time they come into work
because they’re not providing the objective and impartial advice they promise.
In discussing conflicts of interests, it’s important to keep in mind that those who find themselves caught
up in one haven’t necessarily been corrupted. Just because Foreman finds himself torn between giving
impartial advice to his client and giving the advice that gets him good parties doesn’t mean his judgment
Saylor URL: http://www.saylor.org/books Saylor.org
281
is poisoned. That said, it’s extremely difficult to walk away from a conflict of interest unstained: any time
serious gifts or rich entertainment gets injected into a business relationship, suspicious questions about
professionalism are going to seep in too.
Finally, there are two broad ways of dealing with gifts, especially those creating conflicts of interest. They
can be flatly refused, or rules can be formulated for accepting them responsibly.
Refusing Gifts and Entertainment
One way to avoid the gift and conflict of interest problem altogether for Chris Foreman or anyone in a
similar situation is to simply refuse any gifts from business partners. Far more frequently than private
businesses, government organizations take this route. The approach’s advantage, obviously, is that it
wipes out the entire question of wrongdoing. The disadvantage, however, is that it dehumanizes work; it
seems to forbid many simple and perfectly appropriate gestures of human interaction.
Here’s an example of what can happen when efforts to eradicate conflicting interests go to the extreme:
it’s from a New York Times front-pager about the state governor:
Governor David A. Paterson violated state ethics laws when he secured free tickets to the opening
game of the World Series from the Yankees last fall for himself and others, the New York State
Commission on Public Integrity charged on Wednesday.
[4]
So, the governor is in trouble because he got some tickets to watch his home team play in the baseball
championship? That’s going to make Chris Foreman’s head swim. Without getting into the details of the
Paterson case, accepting these tickets doesn’t seem like a huge transgression, especially for someone
whose job pays well and is already packed with gala events of all kinds. It’s not as though, in other
words,
Peterson’s going to be blown away by the generosity or become dependent on it. In the case of Foreman
who could barely afford to eat, it’s reasonable to suspect that he may come to rely on his occasional trip to
the Highlander, but it just doesn’t seem likely that the governor’s judgment and ability to fulfill
professional obligations are going to be distorted by the gift provided by the New York Yankees baseball
club. More, as the state’s elected leader, a case could probably be made that the governor actually had a
professional responsibility to show up and root for the home team (as long as the visitors aren’t the Mets).
As a final note, since the now former governor is legally blind, the value of the gift seems limited since he
couldn’t actually see the game he attended.
Saylor URL: http://www.saylor.org/books Saylor.org
282
Despite this case’s apparent frivolity, the general practice of eliminating conflict of interest concerns by
simply banning gifts can be justified. It can be because so many gifts, just by existing, create the
appearance of a conflict of interest. An appearance of conflict exists when a reasonable person looking at
the situation from outside (and without personal knowledge of anyone involved) will conclude from the
circumstances that the employee’s ability to perform his or her duties may be compromised by personal
interest. This is different from an actual conflict because when there’s really conflict, the
individual feels torn between professional obligations and personal welfare. Almost certainly, Foreman
was tempted to help out Forbes because he really liked the parties. But the case of Governor Paterson
presents only the appearance of a conflict of interest because we don’t know whether he even wanted the
tickets to the Yankees game. Given the fact that he’s blind, he may well have preferred staying home that
night. Still, for those of us who can’t know his true feelings, it does seem as though there might,
potentially, be some incentive for Paterson to return the Yankee favor and provide them some special
advantage. It’s almost certain that at some time in the future, the baseball club will have an issue up for
debate by the state government (perhaps involving the construction of a stadium or maybe just a license
to sell beer inside the one they currently have), and as soon as that happens, the appearance of conflict is
there because maybe Paterson’s response will be colored by the tickets he got.
Conclusion. Refusing to accept any gifts from business associates is a reasonable way of dealing with the
ethical dilemma of conflicting interests. By cutting the problem off at the roots—by eliminating not only
conflicts but the appearance of them—we can go forward with confidence that a worker’s promise to
represent the organization faithfully is uncorrupted by the strategic generosity of others.
What Other Remedies Are Available for Conflict of Interest Problems Stemming
from Gifts?
Categorically refusing gifts may be recommendable in some cases, but in most economic situations a total
ban isn’t realistic. People make business arrangements the same way they make friendships and romance
and most other social things—that mean invitations to the Highlander if you’re lucky, or just to a few
Budweiser’s in the hotel bar. And if you turn everyone down every time, it’s probably going to dampen
your professional relationships; you may even lose the chance to get things done because someone else
will win the contract between drinks.
Saylor URL: http://www.saylor.org/books Saylor.org
283
So where does the line get drawn for accepting gifts with ethical justification? Whether you happen to be a
renowned politician in a large state or someone just out of school trying to make a go of it in the world,
there are a number of midpoints between Governor Paterson’s obligation to refuse tickets to a game he
couldn’t see anyway and Chris Foreman’s raucous partying on the Highlander. Three of the most common
midpoints are
1. transparency,
2. recusal,
3. organizational codes.
Transparency, as the word indicates, manages the acceptance of gifts by publicly recognizing their
existence. The idea is that if Foreman is willing to openly acknowledge exactly what he’s getting
from Forbes magazine, then we can trust that there’s nothing underhanded going on, no secret
agreements or deals. Of course the gifts may still influence his judgment, but the fact that they’re public
knowledge at least removes the sense that he’s trying to get away with something.
Recusal is abstaining from taking part in decisions contaminated by the appearance of a conflict of
interest. Foreman could, for example, keep going to Highlander parties but not manage any media buying
for the demographic that reads Forbes. It’s fairly easy to imagine a team of media buyers working together
on this. Every time something comes up that might be right for Forbes, Foreman passes the decision on to
Sam Smith or whoever and so removes himself from the conflict.
In the public sphere, especially politics and law, it’s common for judges and legislators to remove
themselves from considering issues bearing directly on their welfare. A judge who owns stock in the
Omnicom communications group may recuse herself from hearing a civil case brought against the
company. Legislators deciding what the salary should be for legislators may ask for recommendations
from an independent panel.
Organizational codes are one of the theoretically easiest but also one of the more practically difficult
ways to handle gifts. The advantage of a code is that it can provide direct responses for employees trying
to decide whether they can accept a gift. In Oregon, for example, legislators are prohibited from accepting
gifts valued at more than fifty dollars. Assuming the code is reasonable—and in this case it was judged so
Saylor URL: http://www.saylor.org/books Saylor.org
284
by the state’s supreme court—legislators may assert that by implication accepting a gift valued under that
amount is, in fact, ethical.
[5]
However, the problem with codes is that, like laws, they frequently leave gray areas. That’s especially true
in a media buyer’s world where so much is spent on entertaining. In that kind of reality, it’s very difficult
to put a specific price on everything. A night on the Highlander, obviously, is worth a lot to Foreman, but
how does it appear in the accounting books of dollars and cents? Because it’s hard to know, monetary
limits provide only vague ethical guidance for those in Foreman’s line of work.
The broader lesson is that gifts come in so many forms—and with values that can be so difficult to
accurately measure—that it’s virtually impossible to write something encompassing all the specific
possibilities. Many codes of conduct, therefore, end up sounding noble but are really just saying, “Figure it
out for yourself.” Take a look at the last lines from the Code of Conduct from Omnicom, a massive group
of companies including many leading advertising firms that purchase ads in Forbes:
We expect each employee to exercise good judgment and discretion in giving or accepting any
gift. No set of specific rules can anticipate or capture every possible instance in which an ethical
issue may arise. Instead, all of us must be guided by the overarching principle that we are
committed to fair and honest conduct and use our judgment and common sense whenever
confronted with an ethical issue.
[6]
Questions to Ask before Accepting a Gift
In their book Moral Issues in Business, authors William Shaw and Vincent Barry formulate a list of
questions that, when answered, can provide support and clarity for making decisions about whether a gift
may be accepted. They’re not going to tell you what to do—there’s no magic guide—but they can help you
see things more clearly. In modified form and with some additions and subtractions, here’s the list.
[7]
Is there a conflict of interest, or the appearance of a conflict, that arises because of the
gift? Not every gift raises conflict of interest concerns. Maybe a marketer at Forbes gets a late
cancellation for a Highlander night and can’t find any targeted media buyer to fill the spot, so the invite
gets handed off to a buyer specializing in purchasing ads for young teenagers. Why not? It’d just go to
waste otherwise. And should that lucky media buyer say yes? It’s difficult to find an ethical reason not to
since no conflict of interest concerns seem to arise.
Saylor URL: http://www.saylor.org/books Saylor.org
285
What’s the gift’s value? This can be an easy one. When Foreman was invited to a Springsteen concert
he could just look at the tickets and see that he’d been offered something worth $500. On the other hand,
getting the chance to chat up a Sports Illustrated swimsuit model on the Highlander is going to be harder
to quantify. In those cases where a value can be set, the number allows a clean dividing line: anything
above the a specified amount gets categorized as potentially influencing a decision and so causing a
conflict of interest, while any gift worth less may be considered nominal, too small to threaten
professionalism. What’s the magic number? That depends on who’s involved and the general context, but
many organizations are currently setting it at $25, which is, not incidentally, the limit the IRS sets for
business deductions for gifts to any single person during one year.
Is the gift provided out of generosity or for a purpose? No one can peer into the soul of another,
but something offered during the holiday season may be more acceptable than the same thing offered just
before a major advertising buy is being made.
What’s the gift’s purpose? Just because a gift isn’t an outpouring of generosity so much as an
expression of self-interest doesn’t mean there’s a corrupting intent. For example, if Forbes magazine
sends Foreman a free copy of each issue, that’s more like advertising for themselves than an attempt to
buy the guy off. Almost all of us have had the same experience: we’ve received calendars or notepads in
the mail from a local real estate agent or insurance seller. These aren’t attempts to buy us, just ways to
present their services. On the other hand, it’s hard to see how tickets to a Springsteen concert given by a
magazine can be anything but an attempt to induce the receiver to give a gift back by throwing some ad
money the publication’s way.
Is it a gift or entertainment? Traditionally, a distinction has been drawn between giving gifts and
paying for entertainment. As a rule of thumb, the former is something you can take home and the latter is
enjoyed on the spot. Presumably, entertainment raises fewer ethical concerns because it isn’t a payoff so
much as a courtesy extended to a media buyer in exchange for hearing a pitch. If someone
from Forbes wants to convince Foreman that her magazine is the best place for advertising dollars, then it
doesn’t seem so bad, buying him a lunch or a few beers while he hears (endures) the pitch. After all, it’s
her job to sell the magazine and it’s his to know the advantages all the magazines offer. This is just normal
business. Gifts, on the other hand, seem much more like bribes because they don’t exist in the context of
normal business conversations. Take the tickets to a Springsteen concert; they have nothing to do with
Saylor URL: http://www.saylor.org/books Saylor.org
286
business and can’t be justified as a courtesy extended within the boundaries of normal exchanges between
magazines and ad buyers. Finally, with respect to the parties on the Highlander, those are technically
entertainment since Foreman can’t take the yacht home afterward. It doesn’t sound, though, like a lot of
business talk was going on.
What are the circumstances? There’s a difference between Forbes magazine handing concert tickets
to media buyers to mark the launching of a new column in the magazine and their constant, ongoing
provisioning. As part of the launch campaign, it’s much easier for Foreman to accept the gift without
feeling trapped by an obligation to throw business Forbes’ way since he can respond to the gesture simply
by being aware that the new column is there and taking it into account when he makes future buying
decisions.
What power do I have to bestow favors in return for gifts? Foreman’s job title is assistant media
buyer, meaning he probably doesn’t actually decide which magazine gets the business. He just gathers
research data and makes a recommendation to the boss. Does this free him to enjoy the Highlander
night’s guilt free? Hard to be sure, but it definitely helps him fulfill his professional obligations: it’s just
much easier to do the data mining and recommendation writing in the back office than it is to be the guy
sitting out front telling Forbes magazine the answer’s “no,” even though the parties were great. If that’s
the way things go, Foreman may be a coward for letting his boss deliver the bad news to Forbes, but that’s
a personal ethical failure, not a business one.
What’s the industry accepted practice? In New York state government, as the Paterson case shows,
the accepted practice is no gifts, period. In the looser world of Manhattan media business, New York
magazine sums things up: “Everybody in our industry is guilty of it. Many of those who travel for work
take their boyfriends and call it a vacation.”
[8]
Care should be taken here to avoid the conclusion that
whatever everyone else is doing is OK. That’s not it at all. But it is true that if everyone’s guilty—if all the
magazines are lavishing gifts on media buyers, and all the buyers are accepting—it’s going to be much
easier for Foreman to satisfy his professional obligations. It’s going to be easier for him to tell Forbes “no”
(assuming the demographic facts recommend that) when all the magazines are gifting about equally and
everyone’s accepting than it would be if Forbes were the only magazine giving the gifts and he was the
only one accepting.
Saylor URL: http://www.saylor.org/books Saylor.org
287
What’s the organization’s policy? As the Omnicom Code of Conduct illustrates, sometimes policy
provides words but no guidance. As the New York government policy (which prohibits all gifts) shows,
however, sometimes there is guidance. When true guidance is provided, an employee may fairly reason
that following it is fulfilling professional obligations to the employer.
What’s the law? Generally, laws on gift giving and receiving apply to public officials and those working
with them (politicians, judges, lawyers, businesses doing work for the government). As is always the case,
the legal right doesn’t in itself make ethical right. It can, however, provide the foundation for making an
ethically recommendable decision, assuming other factors—many of which will come up through the set of
questions just listed—have not been ignored.
Conclusion. Gifts cause a conflict of interest when they threaten to corrupt an employee’s judgment on
business matters related to the interests of the person or organization providing the gift. Sometimes gifts
are given with that intention, sometimes not. Regardless, and no matter what the law or corporate
philosophy may be, it’s frequently the employee who ends up deciding whether a gift will be accepted. If it
is, a responsibility follows to justify accepting it.
What’s the Difference among Gifts, Bribes, and Kickbacks?
One advantage of the developed framework for thinking ethically about gifts in the midst of advertising
business relationships is that it provides a compact way to manage the ethics of bribes and kickbacks.
Bribes are gifts—everything from straight cash to entertainment—given to media buyers with the direct
purpose of corrupting their professional judgment by appealing to their personal welfare. When a
representative from Forbes magazine gives Chris Forman tickets to the Springsteen show with the
intention of spurring Foreman to consider buying ad space in Forbes, that’s a gift; it’s left to Foreman to
decide whether he can accept it without betraying his obligation to serve his employer’s interests. When,
on the other hand, the rep gives the same tickets with the intention of getting Forman to directly buy the
space, that’s a bribe. A bribe, in other words, is an extreme conflict of interests where the individual’s
personal interest completely overwhelms the professional responsibilities implied by his job. If Foreman
accepts this kind of gift—one where he knows the intention and accepts that the objectivity of his
judgment will be blinded—then he’s crossed into the zone of bribery. Receiving bribes, finally, seems
Saylor URL: http://www.saylor.org/books Saylor.org
288
unethical for the same reason that accepting gifts can be unethical: it’s betraying the promise to act as an
agent for the organization.
Kickbacks resemble bribes except that instead of the gift or entertainment being given over first and then
the ad space getting purchased, the ad space is purchased and then a portion of that revenue is sent back
to the media buyer as cash or Springsteen tickets or whatever. Regardless of whether the media buyer gets
his reward first and then buys the ad space, or buys the space and then gets rewarded, what’s happening
on the ethical level doesn’t change. Personal interest is being exploited to corrupt professional judgment.
That means accepting the reward becomes a form of lying since it’s a betrayal of the implicit promise
made to do the job right when you sign the contract.
In the Real World, What’s the Difference among Gifts, Bribes, and Kickbacks?
In actual day-to-day business it can be extremely difficult to distinguish among gifts, bribes, and
kickbacks because at bottom all of them spark conflicts of interest. All of them, consequently, are also
going to incite at least remote suspicions of corruption. Of course it’s always easy to find examples at one
extreme or the other. On the safe side, if a woman seeking your business pays for one cup of coffee for you
once, it’s unlikely that you’ll give her proposal any special consideration, and it’s doubtful that she’d
expect it. If she offers to make your car payments on the other hand, it’s pretty clear something’s going on.
Usually, however, the lines are blurry and the reality more like the one Foreman lived through. The exact
monetary value of what he received wasn’t certain. Did he get the invitations with the intention of having
his judgment tainted or were they extended as a courtesy and in accordance with the industry’s common
practice? Would he get more and better invitations if he sent Forbes magazine some extra dollars? While
these questions don’t have certain answers, the ethics can be rendered in straightforward form. Agents of
an organization have a duty to act in favor of the organization’s interests regardless of what happens after
hours.
K E Y T A K E A W A Y S
Conflicts of interest arise when an individual’s professional judgment is challenged by an appeal to
personal interest, as occurs when a prospective client offers a gift.
Saylor URL: http://www.saylor.org/books Saylor.org
289
Because suspicions of unethical practices arise almost immediately when a conflict of interest exists, even
appearances of a conflict of interest present problems in business.
Standard practices for dealing with gifts include outright refusal, acceptance of gifts with only nominal
value, acceptance in accord with industry practices, and good sense within a clearly understood situation.
In certain contexts, gifts of significant value may be accepted ethically, as long as they don’t corrupt
professional judgment.
Bribes and kickbacks can be managed ethically within the framework constructed for gifts. Both bribes and
kickbacks function as gifts that do, in fact, corrupt an employee’s professional judgment.
R E V I E W
Q U E S T I O N S
1. Why do gifts create conflicts of interest?
2. What is the main advantage and disadvantage of dealing with gifts and conflicts of interest by prohibiting
the acceptance of gifts?
3. What questions could you ask yourself to help frame the question as to whether you can ethically accept a
business-related gift?
4. What’s the difference between a conflict of interest and the appearance of a conflict?
5. What’s the difference between a gift and a bribe?
6. What’s the difference between a bribe and a kickback?
[1] Sarah Bernard, “Let Them Eat Crab Cakes,” New York, accessed May 19,
2011,http://nymag.com/nymetro/news/media/features/2472.
[2] Sarah Bernard, “Let Them Eat Crab Cakes,” New York, accessed May 19,
2011,http://nymag.com/nymetro/news/media/features/2472.
[3] Sarah Bernard, “Let Them Eat Crab Cakes,” New York, accessed May 19,
2011,http://nymag.com/nymetro/news/media/features/2472.
[4] Nicholas Confessor and Jeremy “Paterson’s Ethics Breach Is Turned Over to Prosecutors,” New York Times,
March 3, 2010, accessed May 19, 2011,http://www.nytimes.com/2010/03/04/nyregion/04paterson.html?hp?hp.
Saylor URL: http://www.saylor.org/books Saylor.org
290
[5] Bill Graves, “Oregon Supreme Court Upholds $50 Gift Limit for Legislators, Public Officials,” OregonLive.com,
December 31, 2009, accessed May 19,
2011,http://www.oregonlive.com/news/index.ssf/2009/12/oregon_supreme_court_upholds_5.html.
[6] “Code of Conduct,” Omnicom Group, last updated October 16, 2008, accessed May 19,
2011, http://www.omnicomgroup.com/corporategovernance/codeofconduct.
[7] William Shaw and Vincent Barry, Moral Issues in Business (Belmont, CA: Thomson Wadsworth, 2007), 398–99.
[8] Sarah Bernard, “Let Them Eat Crab Cakes,” New York, accessed May 19,
2011,http://nymag.com/nymetro/news/media/features/2472.
Saylor URL: http://www.saylor.org/books Saylor.org
291
7.2 Third-Party Obligations: Tattling, Reporting, and Whistle-
Blowing
L E A R N I N G O B J E C T I V E S
1. Define third-party obligations.
2. Elaborate three standard responses to third-party obligations.
3. Define whistle-blowing.
4. Consider justifications and requirements for whistle-blowing.
Caught in the Crossfire
A hypothetical situation. You work at Omnicom, at the desk next to Chris Foreman. Like him, you’re an
assistant media buyer. Though your area of concentration is distinct (you’re in charge of placing ads on
radio stations) you team up with him from time to time to run numbers, and you know enough about how
it all works to recognize when something’s going wrong. In your opinion, it is. Chris is sending ads
to Forbes that would deliver more for the client if they’d been placed in Business Week. Further, you
believe he’s doing it in exchange for the gifts. You can’t prove that but you do know this: he’s occasionally
supplementing his lousy income by selling some of what he’s receiving—concert tickets, vouchers for limo
service, things like that—on eBay. You’ve tried talking about it, bringing the subject up one way or
another, but he doesn’t want to talk back. And when you say it directly, when you ask whether it’s right to
accept gifts from Forbes and convert them to money, he laughs. “Everyone does it,” he says.
This situation is different from most of those discussed so far for an important reason: you’re not directly
faced with an ethical dilemma; you’re not the one placing the ads or accepting the gifts. Still, you do work
with Chris, sometimes even sending over marketing data that he uses for his accounts. You’re a
third party, which in this situation means you’re not directly responsible for what’s going on but you’re
caught in the cross fire between Foreman and Forbes magazine.
There are infinite variations on this kind of predicament. The financier-fraudster Bernie Madoff asked his
secretary to cover up his affairs by answering his wife’s phone calls and saying he was in a meeting and
couldn’t be interrupted. In the student union of your campus, maybe the breakfast menu offers omelets
cooked with fresh eggs, but you work there and know the manager occasionally messes up the stocking
Saylor URL: http://www.saylor.org/books Saylor.org
292
order and so ends up selling omelets made from a preordered mix of egg-like chemicals. What do you do?
It can be a hard call and at least two questions arise on the way to making it:
1. You need to decide if something truly unacceptable is happening.
2. You’ve got to determine whether it’s any of your business.
If, finally, something unacceptable is happening and you should do something about it, you’re facing
a third-party obligation. This is an ethical responsibility to correct something you’re not actually doing.
Why Should I Get Involved? Ethics and Self-Interest
When confronted with a third-party obligation, employees may get involved for a number of reasons. One
is as a response to an ethical responsibility. Another: as an opportunity to benefit themselves.
Tattling, as any child knows, is revealing an ethical transgression involving others, and revealing it for
your own benefit. Take the case of assistant media buyer Chris Foreman and another assistant media
buyer who learns that Foreman is shortchanging the ad agency’s client for personal benefit. If you’re that
other assistant media buyer and you’re crafty, you may see not only an ethical lapse here but also your
own personal chance. Every senior media buyer has several assistants underneath, and when the time
comes for promotion, there’ll be space, presumably, for only one assistant to advance. Getting Foreman
out of the way may not be a bad career move.
It’s an extremely ambiguous ethical move, however. On one hand, there’s solid justification for getting the
truth known about Foreman. He’s clearly not fulfilling his professional obligations to the company.
However, if you turn him in because that’ll give you a leg up on the promotion ladder, you can hardly say
that ethical righteousness has driven your action. On the other side, this should also be noted: the fact
that you may benefit from revealing unethical behavior probably can’t justify keeping everyone in the
dark.
Typically, we think of ethical restrictions as painful, as obstacles you put between yourself and what you
really want. That’s not always the case, though; they don’t necessarily make you suffer, they may make
others suffer and serve your interests. When they do, you have weaponries ethics—that is, perfectly
reasonable moral dictates used to attack others and benefit yourself. Tattling, finally, is the use of
weaponries ethics; it’s doing the right thing for selfish reasons.
Saylor URL: http://www.saylor.org/books Saylor.org
293
Responding to a Third-Party Obligation: Reporting
Regardless of the motivation for responding to a third-party obligation, there are two broad paths the
response can take: reporting and whistle-blowing.
Reporting ethical transgressions means bringing them to light, but only within the organization. In most
situations, this route is the most direct way for third parties to balance their basic and immediate
obligations. Staying with the advertising scenario where you believe Foreman is essentially accepting
bribes from Forbes, you have an obligation not only to halt the bribery but also to protect the agency’s
interests. Obviously, a noisy public blowup about Foreman misspending a client’s money is going to
damage the advertising company’s business. Reporting—because it stays inside agency walls—promises to
rectify the bribery without causing larger publicity problems.
Bringing this into the real world, because reporting ethical problems does allow them to be addressed
without harming the agency, the Omnicom Code of Conduct includes this:
All reports of possible violations about which management becomes aware will be promptly
considered. We will not punish any employee or representative for making any report in good
faith.
[1]
It’s in Omnicom’s interest to get ethical dirty laundry washed in-house.
Up to here, the situation’s resolution has come easily. But there’s another, potentially complicating,
obligation to consider: the human link to Chris Foreman. Almost all organizations rely on and seek to
nurture bonds of shared responsibility and dependence between employees: in working life, when
someone’s sick or just having a bad day, the others have to pick up the slack. That nurturing explains why
anyone who’s entered a fast-food restaurant knows the workers aren’t “coworkers” but “teammates.” In
most organizations, some form of the camaraderie holds, and you can’t just break those bonds from one
moment to the next. That means if you’re working with Foreman and you know he’s doing wrong, you
may well feel an obligation to not report anything because you don’t want to cause him problems.
Reporting, the conclusion is, a coworker for ethical lapses is easy. But in the real world there are no
coworkers; there are only flesh and blood people.
Next, even if those human connections to others don’t move you, you also have obligations to yourself and
your own welfare to consider, and turning others in to company authorities can ultimately come back
Saylor URL: http://www.saylor.org/books Saylor.org
294
against you. By giving rise to distrust and possibly resentment among other colleagues who fear they may
be the next ones to get reported, you may be in essence isolating yourself in your own cubicle.
In the end, seeing what Foreman is doing and stretching ethical obligations through the situation, you
may find yourself torn between reporting him and not. There’s no automatic resolution to this dilemma,
only the attempt to weigh the obligations and get a sense of which outweigh the others.
Responding to a Third-Party Obligation: Whistle-Blowing
Whistle-blowing is bringing ethical transgressions to light publicly outside the organization. A recent case
involved one of the many advertising agencies gathered under the Omnicom umbrella, Leo Burnett. Two
employees—Vice President Greg Hamilton and Comptroller Michelle Casey—alleged, and a subsequent
federal investigation backed them up, that Leo Burnett was overbilling the government for their work on
the US Army’s “Army of One” recruiting campaign.
The agency was supposed to calculate its hourly rate with a formula dividing charges between the more
expensive work done directly in Leo Burnett’s offices and the less costly hourly labor performed by
subcontractors. What Leo Burnett did was simple: they billed subcontractor work at the higher in-house
rate. The accounting in these massive campaigns—TV, radio, and prints ads as well as sponsorships and
events—is so knotted that a virtual army of accountants is required to keep track of where all the money is
going. In that kind of numerical chaos, the agency could expect that switching a few hours from one
column to another deep inside the mountain of paperwork would go unnoticed by outside auditors. It did
go unnoticed—until Hamilton and Casey told the government what was going on.
Almost inevitably a lot of dust gets kicked up when employees turn on their employers noisily and
publicly. In this case, the US Justice Department lawyers rode in, and they probably wanted a scalp on
their wall: they have limited resources, limited time and money, and when they take something on they
want to win, and they want people to know about it. Back on the agency’s side, they’re going to defend
themselves, and that typically entails attacking their accusers, maybe labeling them disgruntled,
incompetent, or worse. In this case, there was also a tug-of-war over money. The agency obviously wanted
to keep as much as it could, the government wanted money back, and thanks to the False Claims Act,
Hamilton and Casey also demanded their share, which came to almost $3 million.
Saylor URL: http://www.saylor.org/books Saylor.org
295
The False Claims Act is a federal law designed to encourage whistle-blowing on private contractors who
are attempting to defraud the government. Whistle-blowers are entitled, under the law, to 30 percent of
the damages the government obtains. The incentive doesn’t apply to situations involving only private
companies, but even there whistle-blowers may encounter suspicions that ulterior motives—not a
dedication to doing the right thing—finally spurred their loud assertions about misdeeds.
Finally, with respect to the Leo Burnett fraud, the full details will never be known. Because the case never
went to trial, there was little public exhibition of evidence and testimony. To head the whole mess off, Leo
Burnett agreed to settle. In the words of a published report, “Leo Burnett denied any wrongdoing and said
in a statement that it agreed to the settlement ‘to avoid the distraction, burden and expense of
litigation.’”
[2]
Every case of whistle-blowing is different, but a few questions get to the heart of most instances:
What, exactly, is whistle-blowing?
What justifies whistle-blowing?
What weighs against whistle-blowing?
Can the whistle-blower expect protection?
Is whistle-blowing morally required?
What Is Whistle-Blowing?
Whistle-blowing is bringing an organization’s ethical transgressions to public light. Spilling the beans to
the family over dinner, however, doesn’t count; the truth must be exposed to an authority or institution
capable of taking action. In the case of the advertising agency, Hamilton and Casey took their information
to the federal government. They also could have selected one of the important industry publications—
say, Advertising Age magazine. Any information published there would draw attention from those
involved and give the client (in this case the US Army) the opportunity to act on behalf of its own
interests. The news media—a newspaper, a TV station—may have been a possibility in this case, given the
large scope of the fraud and the national interest underneath it. Other possibilities could be listed, but
what’s important is that the report of misdeeds goes to someone who can do something about it (or at
least provoke others to do something). Finally, whistle-blowing may be anonymous. However, in practical
terms, that’s frequently not a real option because government authorities, like private ones (editors of
Saylor URL: http://www.saylor.org/books Saylor.org
296
industry publications and so on), are far less likely to spend time tracking down the truth about
accusations when even the accuser is unwilling to stand behind them.
What Justifies Whistle-Blowing?
Whistle-blowing needs careful justification because it requires violating the obligation any employee has
to protect the interests of the employer. Here are five items that could be checked before publicly lighting
up an organization’s misdeeds from the inside. Importantly, the fact that the items may all be
checked doesn’t oblige action, but it does raise the possibility as ethically justifiable.
1. There is clear evidence of continuing wrongdoing by the organization or continuing effects of past
wrongdoing. In the business world, actions that are entirely locked in the past are the subject of history,
not ethics.
2. The wrongdoing must be serious. In the case of Leo Burnett, the case wouldn’t cross this threshold if only
one hour of labor had been attributed to the higher-cost office. But the threshold would be crossed if the
agency significantly overcharged many hours for years, bleeding the account of its resources and
ultimately damaging the army’s ability to recruit new, top-flight soldiers.
3. The organization’s established, internal channels for reporting and correcting problems have been
exhausted. Most organizations provide clear ways for employees to voice concerns internally. A
conversation with a supervisor is an obvious example. At larger organizations, sometimes an entire
internal department has been mounted to receive and act on the concerns of employees. Here’s the web
page of a typical example; it links to Wal-Mart’s internal department for
ethics:http://ethics.walmartstores.com/Statementofethics/RaiseAConcern.aspx. Whether, finally, there’s
a clear, formal route for internal reporting or not, employees have a responsibility to try to resolve
problems in ways that benefit—or do the least possible damage to—the organization, and therefore the
possibility of raising concerns internally needs to be explored fully. (As always, there are special cases. If,
for example, the CEO of a small advertising company is robbing its client’s money, there may be no
internal route to resolution, leaving external whistle-blowing as the only moral corrective. Also, though
whistle-blowing is defined as taking action outside the organization, the definition could be stretched to
include the act of bringing wrongdoing to light directly before high officials within an organization by
skipping over the normal chain of authority.)
Saylor URL: http://www.saylor.org/books Saylor.org
297
4. There’s unmistakable and convincing evidence of misconduct. The evidence must be unmistakable in the
sense that it clearly indicates wrongdoing; it can’t be that an innocent explanation seems as likely as a
guilty one. In the Leo Burnett accounting books, if it turns out that on one page all the internal hours are
in the external hour’s column and vice versa, that may be an attempt to defraud the government, or it may
just be that the data-entry guy came to work one morning hung over and ended up confusing the
numbers. Further, the evidence must also be compelling in the sense that there’s enough of it for a
reasonable person to conclude the misdeeds are actually occurring. So even if you’re certain numbers are
being entered incorrectly intentionally, but it turns out that the difference—the amount of extra money
Leo Burnett is making—is trivial, then it’s going to be hard to justify creating a stink. It may be, for
example, that someone in the accounting department is making small adjustments in order to balance
errors found elsewhere in the giant balance sheet.
5. There’s reason to believe that whistle-blowing will resolve the problem. In the case of Leo Burnett—or
any business that’s overcharging a client—you can be pretty sure that bringing the fraud to light will spark
action, at least by the defrauded client. On the other hand, if you’re in the production department of the
advertising agency (in other words, you’re actually filming commercials) and you regularly get shipped
down to Mexico to shoot campaigns because everything’s cheaper down there and you learn that some of
the extras in the commercial’s background are working longer hours than local regulations allow, you
might reasonably figure that you can talk all you want in public, but it’s not going to make any difference.
What Weighs against Whistle-Blowing?
The three heaviest arguments against whistle-blowing are
1. legal requirements for confidentiality,
2. prudential concern for one’s career and personal welfare,
3. an employee’s sense of loyalty to the organization.
A legal requirement for confidentiality may weigh against whistle-blowing by binding employees to not
share a company’s internal information. The requirement traces back to a section contained in many work
contracts. Called a confidentiality clause, here’s a basic version:
Employees may have access to records and other information about customers and other
employees, including proprietary information, trade secrets, and intellectual property to which
Saylor URL: http://www.saylor.org/books Saylor.org
298
the Company holds rights. Employee agrees to keep all such information strictly confidential and
to refrain from discussing this information with anyone else without proper authority.
While this is most directly aimed at protecting consumer information (say, credit card numbers) and
company trade secrets (Coke’s secret formula), it may also be read as safeguarding the kind of information
a whistle-blower wants to make public. In the case of the Leo Burnett agency, what Vice President
Hamilton and Comptroller Casey told the government did, in fact, involve “records and other information
about customers.”
The second major argument against whistle-blowing, self-interest operates in both the professional and
personal sense. Turning against the company may be the right thing to do, but it’s almost inevitably a
painful thing to do, at least according to a survey published in the New York Times. What condition, the
study sought to determine, do whistle-blowers find themselves in a few years afterward?
One hundred percent who worked for private business were fired.
Twenty percent could still not find work at the time this survey was taken.
Seventeen percent lost their homes.
Fifty-four percent had been harassed by peers at work.
Fifteen percent viewed their subsequent divorce as a result of whistle-blowing.
Eighty percent suffered physical deterioration.
Eighty-six percent reported significant emotional stress (depression, anxiety).
Ten percent reported having attempted suicide.
[3]
It doesn’t sound good. Of course every case is different, and if you look on the other side of these numbers,
they leave room for the possibility that at least some people do the right thing and get on with their lives
just fine. Still, there are no guarantees and ethics isn’t only about duties to others and the world outside,
all of us have equal duties to ourselves: duties to maximize our potential, protect those nearest to us, and
defend our own welfare.
Finally, the values and reasons supporting loyalty as a reason for not blowing the whistle will be
considered in their own section further on.
Saylor URL: http://www.saylor.org/books Saylor.org
299
Protecting the Whistle-Blower
As the survey data about whistle-blowers reveal, there’s not a lot of protection for them. That isn’t for a
lack of trying, however. At both the state and federal levels, reams of laws have been enacted to protect
those who expose wrongdoing organizations. Perhaps the most notable is the Sarbanes-Oxley Act. Passed
in 2002 by the federal government as a response to a series of disastrous accounting frauds at large
companies, Sarbanes-Oxley is a massive piece of legislation intervening in many parts of the business
world, and especially in aspects connecting to an organization’s finances and transparency.
Specifically with respect to whistle-blowers, the law attempts to encourage it by protecting whistle-
blowers at publicly traded companies that report activities to government agencies. (The act doesn’t apply
to privately held firms dealing exclusively with other private firms.) Employers are prohibited from taking
retaliatory action (firing, demoting, harassing), and whistle-blowers are provided clear avenues for
lawsuits should such retaliation occur. Here’s the legislative language: “In order to establish a case under
Sarbanes-Oxley, an employee must prove that she (1) reasonably believed that her employer was breaking
the law; (2) engaged in whistle blowing activity as defined by the statute; (3) suffered an adverse
employment action; and (4) that there was a causal connection between the whistle blowing activity and
the adverse employment action.”
[4]
The problem is that last clause. Everyone who’s ever had a job knows that mistakes happen every day.
Deadlines are missed, projects contain errors, and goals aren’t met. Bosses who have it in for you aren’t
going to have many difficulties converting those mishaps into reasons for denying wage hikes and even
outright firing. In your heart you may know—everyone may know—that you’re suffering retaliation for
reporting the company, but proving it can be difficult.
The bottom line is—and as the previous survey shows—if you publicly divulge information seriously
damaging your employer, you’re probably going to be gone. And even if you find some protection in one or
another law, it’s difficult to imagine that your career is going anywhere inside the company. Worse still,
prospective new employers are, very likely, going to hesitate before extending a job to someone who has
already caused serious problems for a former employer. Taken all together, the bleak reality is that in
most cases whistle-blowers can’t count on getting back the life they had before they publicly disclosed
their organization’s misdeeds.
Saylor URL: http://www.saylor.org/books Saylor.org
300
Is Whistle-Blowing Morally Required?
Given the abundant reasons—financial, professional, emotional, and ethical—against whistle-blowing, are
there any cases where a moral argument can be formed to require publicizing an organization’s unethical
actions? Probably, but they’re few. Here’s a possible rule of thumb: whistle-blowing is required when the
act can prevent harm to others in ways that are serious and go beyond the bottom line. If someone is
getting ripped off, the reasoning goes—if an advertising company is overcharging its clients—whistle-
blowing may be justified, but not required. All that’s at stake is money. On the other hand, if a nuclear
power plant is being constructed near a residential area and you learn the contracting company you work
for is using cheap cement to boost the profit margin, it seems as though you have little choice—the weight
of elementary personal integrity in the face of potentially lethal wrongdoing probably requires personal
sacrifice.
What about the hypothetical Chris Foreman situation? You’re working with him and have acquired
sufficient evidence to know that he’s selling out his client by sending their ad dollars to Forbes magazine
in exchange for Highlander nights. You’ve reported the matter internally and received no response. Do
you go public? You’d certainly be justified in taking the story to Ad Age magazine. Just running down the
list of conditions justifying whistle-blowing, they all get checked:
1. There’s clear evidence of continuing wrongdoing by the organization.
2. The wrongdoing is serious (at least in the world of advertising).
3. The organization’s established, internal channels for reporting and correcting problems have been
exhausted.
4. There’s unmistakable and convincing evidence of misconduct.
5. There’s reason to believe that whistle-blowing will resolve the problem.
The question remains, however, whether the issue affects life beyond business and the bottom line. It
doesn’t appear to. At bottom, this is the case of a client—AT&T mobile phone services—getting poor
service from an Omnicom company. That should be corrected, and presumably market forces will correct
it sooner or later, but whether they do or don’t, there’s no requirement here to seriously jeopardize your
own financial, professional, and emotional welfare.
What about the case of Leo Burnett? Again here a client is getting a raw deal, but there’s an important
difference: this is the army, not a telephone company. If it’s true that the recruiting budget is being
Saylor URL: http://www.saylor.org/books Saylor.org
301
seriously hindered, the situation may be crossing the line from justified whistle-blowing to justified and
required. If it does cross that line, the reason will be that protecting your own financial and emotional
welfare is trumped by the responsibility to help soldiers in war resist mortal danger as totally as possible.
The fact that the army isn’t getting the best recruits possible doesn’t just affect people in the pocketbook,
it threatens those on a live battlefield. Faced with that reality, it will be hard for individuals including
Burnett employees Hamilton and Casey to keep quiet just because they don’t want to lose their jobs.
K E Y T A K E A W A Y S
Third-party obligations arise when you know of wrongdoing by an organization or by individuals within it,
and though you aren’t directly at fault, you’re in a position to correct the problem.
In some cases, third-party obligations can be opportunities to sabotage a fellow worker for personal gain.
Responses to third-party obligations include reporting the problem inside the organization for correction
and publicizing the problem, also known as whistle-blowing.
Because whistle-blowing harms the organization, employees must take into account their responsibility to
defend the organization’s interests before publicly decrying the wrongdoing.
In some cases whistle-blowing is not justified, in some it is, and in some extreme cases, whistle-blowing
may be ethically required.
In practical terms, whistle-blowing can be devastating for the employee.
R E V I E W Q U E S T I O N S
1. Create a hypothetical third-party obligation involving an employee of a major company.
2. What does it mean to deploy weaponries ethics?
3. What questions can be asked to help determine whether whistle-blowing is justified?
4. What questions can be asked to help determine whether whistle-blowing is ethically required?
5. Why might an employee hesitate before whistle-blowing?
6. The Sarbanes-Oxley Act tries to protect whistle-blowers. Why is it not very effective?
[1] “Code of Conduct,” Omnicom Group, last updated October 16, 2008, accessed May 19,
2011, http://www.omnicomgroup.com/corporategovernance/codeofconduct.
Saylor URL: http://www.saylor.org/books Saylor.org
302
[2] Mehhen Streit, “Leo Burnett Settles Suit for $15.5 Million,” Chicago Business, January 6, 2009, accessed May
19, 2011, http://www.chicagobusiness.com/cgi-bin/news.pl?id=32498.
[3] Survey cited in Manuel Velasquez, Business Ethics: Concepts and Cases, 6th ed. (Upper Saddle River, NJ:
Pearson, 2006), 378.
[4] Welch v. Cardinal Bankshares Corp., 2003-SOX-15 at 35 (ALJ 2004).
Saylor URL: http://www.saylor.org/books Saylor.org
303
7.3 Company Loyalty
L E A R N I N G O B J E C T I V E S
1. Define company loyalty.
2. Elaborate three degrees of company loyalty.
Two Kinds of Loyalty
There is narrow company loyalty and broad company loyalty. The narrow definition pertains to
employment: the loyal employee sticks with the company instead of looking for work elsewhere, especially
during economic booms when jobs are plentiful and moving on is easy.
This kind of loyalty, however, is in trouble according to an article from the Harvard Business School: “The
very nature of the relationship between employers and employees has undergone a fundamental shift:
Today, workers not only don’t expect to work for decades on end for the same company, but they don’t
want to. They are largely disillusioned with the very idea of loyalty to organizations.”
[1]
Part of the reason for the shift—and part of the reason employees don’t stay at companies for decades—is
that many employers don’t hesitate to fire their workers at the drop of the hat when it serves the
company’s interest. On the other side, according to the article, it’s also true that today’s workers don’t
hesitate to move on to a new job when a better one, or maybe just a different one, comes along. Regardless
of who went first, the fact is company loyalty—whether it’s going from the company to the worker or the
worker to the company—isn’t what (we are told) it once was.
The broad definition of company loyalty goes beyond employment questions and measures an employee’s
willingness to sacrifice income, leisure time, personal relationships, family responsibilities, and general
life aspirations in the name of the organization. To create this dynamic of sacrifice, two distinct kinds of
relationships with the organization are required:
1. Attachment to the organization that is non-instrumental. This means the attachment isn’t maintained
only because it serves the employee’s concrete interests, such as the need for a salary to pay the rent and
grocery bills.
2. A deposited value in the organization that goes beyond any individual and their attachment; the
organization’s value continues even without those who currently feel it.
Saylor URL: http://www.saylor.org/books Saylor.org
304
Probably, there’s not a lot of this kind of deep loyalty in the advertising field. Agencies are constantly
stalking new clients, even trying to steal them from others. For their part, most clients are constantly
looking for better deals and ways to refresh their image, and they are usually open to proposals from new
firms interested in handling their communication. More, companies that employ advertising agencies
constantly “put their account up for review,” which means the current account holder has to compete with
new entrants just to maintain the business. There are exceptions, of course, but for the most part
advertising agencies are constantly clinging to the business they have, seeking new opportunities, and
always on the lookout for fast money. In that kind of cutthroat environment—one where it’s your job to
sing the praises of Burger King one day and McDonald’s the next—it’s going to be difficult for workers to
feel as though they should (or even can) be true to their current employer.
Other kinds of organizations seem more likely to instill feelings of loyalty. A religious hub—a church, a
synagogue, a mosque—is one obvious example. Most priests are attached to, and deeply concerned by, the
welfare of their church; they serve their institution and aren’t working there for the money (which
probably isn’t great). Further, most also believe their institution has value beyond them: the importance
was there before they arrived (or were even born) and will continue after they leave. Taken together, these
elements create space for true employee loyalty to the organization. Something similar—the existence of a
space for labor that’s not about money and similar rewards—could be found surrounding many who work
for Greenpeace, Doctors Without Borders, political parties, the CIA, the United Nations.
Other professions open on both sides of the line—that is, there’s ample space for an instrumental
relationship (I keep this job because it makes me happy) and one based on broad loyalty. Some medical
doctors are in it for the money but others for the care, for the principle that bringing health to others is a
good cause. Law is another example. Ambulance-chasing lawyers just want payoffs, but some judges
believe in the law as something larger than themselves and a basic force for civilization that’s worth
serving. Moving down to street level, there are police officers who just like a steady paycheck and others in
the field to serve and protect: they see their work as improving the lives of others and the general
community.
Saylor URL: http://www.saylor.org/books Saylor.org
305
Three Degrees of Loyalty
Within a dynamic of employee loyalty, there are three levels of dedication: obedience loyalty, balanced
loyalty, and free agency.
Obedience loyalty, which is an extreme case, works from the idea that the organization is worthy and the
employee is comparatively worthless or only worthwhile to the extent he or she serves the organization.
This extreme will be reached only rarely, but there are glimmers of it in some professional activities. One
quick way to identify these kinds of labors is to check whether the truly dedicated are willing to sacrifice
even their lives for the cause their organization embodies. The armed forces come to mind here. Some
political organizations command this devotion, especially in revolutionary times. Some workers’ devotion
to their labor union has been sufficient to put their lives in danger. The exploring scientist Charles Darwin
believed in accumulating knowledge and put his life at risk in the field as he tracked rare species and
ecosystems.
Not so dramatic or extreme, some professions and organizations can suck the emotional life out of
employees. Or they may take vast chunks of the employee’s time. Undercover police work exemplifies by
requiring a loyalty reflected as self-sacrifice to an extent few of us would contemplate. April Leatherwood,
for instance, went undercover in Memphis for an entire year. Almost entirely separated from family and
friends, she lived on the street, wore the same clothes every day, went without brushing her teeth, and
rarely bathed. That was an ugly year of her life, one sacrificed for the job.
[2]
Balanced loyalty is a situation where both the employee and the organization recognize in each other an
independent value. In this case, the employee can be expected to make sacrifices—possibly even do things
he or she would normally consider unethical—in the name of serving the larger organization. One example
would be a lawyer working in a public defender’s office, one who believes that the system of law and the
rules of its enforcement are noble and should be respected to some important extent that is independent
of the particular lawyer’s welfare and beliefs. The loyalty can be reflected in a number of ways. First, it’s
simply the case that most public defender positions don’t pay as well as similar posts in private firms.
Pushing further, the public defender may be asked to represent and defend a client she knows
(or strongly suspects) is guilty. In this case, presumably, she’s being asked to do something she wouldn’t
do in her day-to-day life—that is, serve the interests of a guilty man. More, presenting a full-blown legal
Saylor URL: http://www.saylor.org/books Saylor.org
306
case for the defendant’s innocence would essentially be lying and, again, something the lawyer might not
typically do.
At the same time, this lawyer probably won’t be sacrificing everything; she’ll recognize that her life and
aspirations have value also, and there may come a point where she decides the sacrifices demanded by the
job are too great to bear. Perhaps she’s just had a child and needs to up her income, or, maybe a man she
helped set free has committed a gruesome crime. However the situation might be, when the lawyer leaves
the office of the public defender for a higher paying job at a large private firm, she has demonstrated a
balanced sense of loyalty. She’s willing to sacrifice in the name of a larger organization she respects. But
only up to a point.
Other demonstrations of balanced loyalty to the organization could include
buying the company’s products (though they aren’t the personal preference),
evangelizing in public life (telling your friends how great the company or its products are),
voting for the political candidate the company affirms will best serve its interests,
moving for the company.
Free agency is the extreme on the bottom end: the absence of loyalty. Some theorists propose that this
should be the default state for most employees for this reason: it’s ultimately impossible to be loyal to a
typical company because profit-making institutions just aren’t the kinds of things that can properly
demand or receive any loyalty. The entire idea of loyalty, the argument goes, only exists in a reality where
individuals stand by others to some extent without conditions (example: parents who love each other and
their children unconditionally). Money-making businesses, on the other hand, are incapable of that kind
of unconditional fidelity. On the contrary, the only desire most private enterprises know is the one to
serve its own interests by making more profits. If that’s right—if companies have no loyalty to give—then
its employees can’t enter into that kind of relationship. Instead, in the business world at least, you and I
are forced to pursue our own interests—a higher salary or whatever—just as the larger company pursues
its own.
Translating this into the working world, the absence of company loyalty is the idea that workers find value
in their organization only because it serves their own interests. Of course it’s impossible to know the souls
of others, or exactly what their deepest values are, but there might be a hint of this free-agent loyalty in
the Leo Burnett case. Two high-level and highly paid workers served the company well—and were
Saylor URL: http://www.saylor.org/books Saylor.org
307
compensated well—until they turned whistle-blower against the firm. When vice president Hamilton and
comptroller Casey alleged that Leo Burnett was overbilling the government for their work for the US
Army, they weren’t just doing the right thing, they were doing a lucrative thing for themselves since the
False Claims Act promised 30 percent of damages the government obtained. If the money is
the reason they turned on the agency, they exemplify free-agent loyalty. They worked hard for the
organization because the pay was good, but the moment they saw the chance to get even more money by
turning against it, they jumped. At bottom, that means, their loyalty is only to themselves.
K E Y T A K E A W A Y S
Company loyalty defined narrowly concerns employees sticking with the organization instead of looking
for work elsewhere.
Company loyalty defined broadly emerges from the idea that the organization possesses nobility that’s
worth serving, even if employees don’t benefit personally from the contribution.
The three degrees of company loyalty are obedience loyalty (the worker exists to serve the organization’s
interests), balanced loyalty (workers and organizations share interests), and free agency (the organization
exists to serve the worker’s interests).
R E V I E W Q U E S T I O N S
1. Name an organization that might inspire obedience loyalty. Why is obedience inspired? What does the
loyalty look
like?
2. Name an organization that might inspire balanced loyalty. Why is it inspired? What does the loyalty look
like?
3. Name an organization that might inspire an attitude of free agency. Why is it inspired? What does the free
agency look like?
4. Take a career you’re (considering) pursuing. On the scale from obedience loyalty to free agency, where do
you imagine most employees in that line of work are located? Why?
5. [1] Lauren Keller Johnson, “Rethinking Company Loyalty,” Harvard Business School Working Knowledge,
September 19, 2005, accessed May 19, 2011,http://hbswk.hbs.edu/item/5000.html.
Saylor URL: http://www.saylor.org/books Saylor.org
308
6. [2] Kristina Goetz, “A Year of Living Dangerously Takes a Toll on Undercover Memphis
Officer,” Commercial Appeal, August 30, 2009, accessed May 19,
2011,http://www.commercialappeal.com/news/2009/aug/30/year-of-living-dangerously-takes-its-toll.
Saylor URL: http://www.saylor.org/books Saylor.org
309
7.4 Stress, Sex, Status, and Slacking: What Are the Ethics of Making It through the
Typical Workday?
L E A R N I N G O B J E C T I V E
1. Consider ethical questions attached to several issues commonly arising during the workday.
Bringing the Office Home: High-Stress Work
No book can cover the ethics of everything happening on every job, but four issues arising in most
workplaces sooner or later are stress, sex, status, and slacking off. Starting with stress, what happens if
the workday doesn’t end when the workday ends? For those enduring—or choosing—high-stress jobs,
there’s no five o’clock whistle; even if they’re shopping or watching a baseball game, the job’s effects hum
in the background. One simple example—and also one all of us see on the street every day—come from an
article in the USA Today. It recounts an academic journal’s finding that overweight people pack on still
more pounds when their work continually produces serious anxiety. If you’re overweight, the study shows,
and you’re stressed in the office, there’s a high likelihood your stomach or your thighs are going to keep
growing.
[1]
One of the central arguments Aristotle made in ancient Greece was that doing right isn’t the highest goal
of ethics. The careful understanding of our values and purposes centers on, ultimately, living a good life.
Doing the right thing is part of that goodness, but happiness is there too, so one of the issues stress at
work brings forward is this: how is my decision to accept stressful employment affecting my happiness
and the happiness of those around me? Here are some more specific questions that could be asked on the
way to pinning down the ethics of stress:
What positive returns, exactly, am I getting from my stressful job?
Are there prospects for reduced stress in the future?
What are the costs of the stress? Is it affecting my weight, my leisure time, my friends, my marriage and
family?
Who is affected? Is anyone else suffering stress because I’m stressed out? Are people suffering from my
stress in other ways?
Saylor URL: http://www.saylor.org/books Saylor.org
310
Stress at work isn’t only a psychological problem or a medical one—it’s also laced with questions about
value. It’s the most fundamental ethics: what’s worth doing and what isn’t? It’s impossible to know, of
course, exactly where the line should be drawn and when stress is worth accepting. Any answer that will
be justifiable, however, will have to begin with a clear understanding of exactly what the costs and benefits
are.
Office Romance
Hooking up at work is one eternal way of making the time fly, but what’s going on in today’s offices is
somewhat different from the past. An article from the Wall Street Journal indicates how the meaning of
sex in the office is shifting: “Marriage is a priority for most Americans—more than 90 percent of American
adults eventually marry—but these days it may not happen, as it so often did before, in the immediate
post-high-school or post-college years. The truth is that we’re marrying later.”
[2]
When marriages were typically celebrated at the end of the schooling years, work-related romances went
hand in hand with infidelities. In that environment, questions arose about the organization’s role in any
affair that may be occurring during company time.
The entire context of discussion changes, however, when a large number of people flowing into the
workforce are unmarried and are looking to wed. Inevitably, the office is going to become a mating
ground—people pass eight hours a day there—and one of the questions young workers are going to start
asking when they think about jobs and careers is, will I be able to meet someone if I get into one or
another line of work?
The aspiration to connect introduces a thorny dimension to employment decisions made by young people
(and some older ones too). If you’re a guy working on a heavy construction job, the pay may be good, but
there’s probably not going to be a woman in sight. On the other hand, doing the coursework to earn
paralegal certification may be a headache, but getting into the field isn’t a bad way to meet successful and
interesting women.
What’s going on here is that as society changes—as marriage and family life get pushed back into time that
used to be reserved for work—the factors shaping the way we think about which jobs are more desirable
than others simply on a day-to-day basis are changing, and part of your responsibility to yourself is to
keep track of what you really want from your 9 to 5 time. One of the standard moral obligations we share
Saylor URL: http://www.saylor.org/books Saylor.org
311
is the responsibility to be sincere not only with others but also with ourselves about important decisions
touching the business part of life. And if romance is part of what you want from work, then the
possibilities have to be taken into account just like salary and other benefits.
Status
Chris Foreman, the media buyer who enjoyed yacht evenings on the Highlander and tickets to all kinds of
major events, received a piddling salary. He thought about changing jobs but decided not to. One reason
was that all the entertainment added a lot of indirect money to his income. There was another reason
too—the special, VIP privileges he constantly received from his benefactors: “There’s a feeling of
superiority. When you pass by a line at a screening because you’re on the list you do get that ego boost.
You’re thinking, Ha, ha! I’m not a chump.”
[3]
Status on the job makes a difference in quotidian working life, but it’s hard to quantify; it’s not like a
salary, which is an objective number and can be directly compared with others on a pay scale. How much
is it worth, the question is, to wing by others forced to stand in line?
Knotting matters further, defining exactly what counts as status isn’t easy, and any answer is going to
move and slide depending on who you talk to. For some, being a lawyer is impressive and lucrative, for
others it’s dirty and, well, lucrative. For some, being a test pilot is exciting and respectable, for others it’s
scary and weird. Many people seated in first class on an airplane rush to get on early so that all the
economy travelers get to see them as they file past. Some of those people headed toward the back of the
plane see the first-class passengers as legitimate power elites, but others get the feeling that most of them
are really chumps: the reason they’re in first class is because they used frequent-flyer miles to bump up,
and the reason they have a lot of those is because their bosses always make them take the trip to see
clients instead of bothering to do it themselves.
More generally, in the world of New York City media buyers, status seems linked with superiority, with
being visibly more privileged than those forced to stand in lines. For others, however, status will be
quieter. The teacher, the nurse—they find status not as superiority but as social importance.
Conclusion. Status means different things to different people, but anyone looking to get it from a job
should ask how much is really there, and how much is it going to help me get out of bed in the morning
and want to go to work?
Saylor URL: http://www.saylor.org/books Saylor.org
312
Slacker’s Paradise
Typical ways of getting through the day include throwing yourself into your work (frequently with the
hope of a promotion or pay raise), firing up an office romance, and enjoying the status a post allows.
Another way of making it from 9 to 5 is by trying to avoid doing work, by working to do as little as
possible. This is the slacker reality, and there are two routes into it: Personal slackers adopt the attitude
for their own private reasons. The context slacker is dedicated to not working because the incentive
system of the labor contract—or some other external factor—encourages slacking off.
Beginning with the personal slacker, the attitude starts with a decision: You take a typical job and make it
your project to expend as little effort as possible. The reasons for adopting this stance depend on the
person. Maybe there’s a passive-aggressive element, some personal frustration with life or perhaps a
somewhat idealistic attempt to make a statement. In any case, the motives behind this kind of behavior
should be pursued in a psychology course. Here all that matters is that for one reason or another the
private decision gets made to get through the day by working to not work.
The second slacker pathway starts with a context. Here’s an example from an online discussion board:
“Haha I worked in a union job and they were there to punch in…take a lunch…take 2 15min breaks…and
punch out. They had n0 incentive to work hard because they would get a 0 dollar raise.”
[4]
The key here is the incentive, the idea that working hard doesn’t benefit the worker because labor
agreements are so protective and constricting that, on one side, it’s almost impossible to fire a worker, and
on the other, it’s nearly impossible to reward one for superior performance. That means there are islands
in the general economy where the traditional rule regarding performance and reward—the rule that doing
well gets you ahead—doesn’t apply very well.
One of the curiosities of these islands is that it’s not right to conclude that there’s no incentive to do
anything. Actually, there is an incentive system in place even when, as the discussion board poster writes
it, “hard work gets a 0 dollar raise.” In this case, the incentive is negative. If union rules (or whatever rules
happen to be in effect) mean workers can’t compete against each other with the best performer winning a
better post, the workers can still compete. It’s just that since wages are fixed, the competition turns
negative: the most successful worker is the one who manages to do the least work. It makes perfect sense:
if you do less work than anyone else, and you’re paid the same amount as everyone else, you have, in fact,
found a way to win. You get the highest salary; you’re the one paid most for the least work.
Saylor URL: http://www.saylor.org/books Saylor.org
313
Is slacking ethically acceptable? Whether someone is a contextual or personal slacker, when success is
defined not as how well you do but how little you do, two basic questions arise:
1. Is someone or some organization being cheated?
2. Is there something fundamentally unethical about being a slacker?
The first question applied to those trapped—willingly or not—in contextual slackerism leads quickly to the
conclusion that the organization bears at least as great a burden of responsibility as the employee for
deficient work motivation. Applied to the personal slacker, the question about whether an employer was
cheated becomes more difficult. There does seem to be an element of reneging on implicit or explicit
pledges to fulfill responsibilities here, but it’s also true that most employment contracts in the United
States (though not so much in Europe where this question would require more prolonged consideration)
leave the organization broad latitude for dismissing workers whose performance is inadequate.
Next, is there something fundamentally unethical about slacking off? Most basic ethical theories are going
to return some form of a yes verdict. From a utilitarian perspective—one trying to maximize the common
good and happiness—it seems like problems are going to arise in most workplaces when coworkers are
forced to pick up assignments the slacker was supposed to complete or could have completed easily with
just a bit more effort. Similarly, basic ethics of duties include the one we all have to maximize our own
potential and abilities, and rigorously avoiding work seems, in most cases, to run against that aspiration.
Probably, a satisfying ethical defense of the slacker lifestyle would need to be founded on a personal
project going well beyond the limited economic world. Slacking off, in other words, would need to be part
of someone’s life ambition, and therefore its questions belong to general ethics, not the more limited field
of economic values treated here.
K E Y T A K E A W A Y S
Stress at work invites ethical considerations of workers’ obligations to their own happiness.
Office romance may broaden the range of values applying to career choices.
Status deriving from one’s work can be an important compensation, but it is difficult to quantify.
Slacking off—working to not work—may result from an employee’s work environment or it may be a
personal choice.
Saylor URL: http://www.saylor.org/books Saylor.org
314
R E V I E W Q U E S T I O N S
1. What are some of the ways stress at work can cause unhappiness in life?
2. Why the office is an important scene of romance in today’s world?
3. What do you imagine the rewards of status to be?
4. What kind of work contract would encourage slackerism?
5.
6. [1] Nanci Hellmich, “Study: Overweight People Gain More When Stressed by Work,” USA Today, July 8,
2009, accessed May 19, 2011,http://www.usatoday.com/news/health/weightloss/2009-07-08-obesity-
stress_N.htm.
7. [2] Christine Whelen, “Older but Wiser,” The Wall Street Journal, November 3, 2006.
8. [3] Sarah Bernard, “Let Them Eat Crab Cakes,” New York, accessed May 19,
2011,http://nymag.com/nymetro/news/media/features/2472.
9. [4] Eazy E, “IS it me or are most Union workers lazy?,” Yahoo! Answers, accessed May 19,
2011, http://answers.yahoo.com/question/index?qid=20081008004353AAn1iL7.
Saylor URL: http://www.saylor.org/books Saylor.org
315
7.5 Case Studies
Payola and the iPhone App
The word payola traces back to rock and roll’s early days, back when the only large-scale way new acts
could get their name and music out was on the radio. Deejays in the 1960s controlled their own playlists
much more than today, so a band could drive into town, play a few concerts, and pay off a few deejays to
get their songs into the rotation. When they rolled out toward the next stop, they left behind the
impression that they were the next big thing.
It’s not illegal for a deejay, radio station, or anyone at all to accept money in exchange for playing
someone’s music, but US law does make pay for play illegal if the sponsorship isn’t openly divulged, if the
song isn’t treated, in other words, as a commercial.
Today’s media world provides almost infinite ways for musicians, video commentators, moviemakers, and
iPhone app developers to get word out about what they’re doing. Anyone can post a video on YouTube or
give away software on a web page. Payola is still out there, though. Wired magazine ran a story about it in
the world of iPhone apps.
It works like this. You invent an iPhone app but can’t get anyone to notice. What do you do? One
possibility is offer money to one of the well-known iPhone app review sites in exchange for a review of
your creation. That gets the word out pretty well, so developers are starting to pay up. This modern payola
scheme is enraging the iPhone community, however. Jason Snell, who works for Apple’s own app-review
Imag
e rem
oved
due
to c
opyr
ight
issue
s.
Saylor URL: http://www.saylor.org/books Saylor.org
316
website complains, “Readers need to know that true editorial reviews are fair, and aren’t the product of
any quid pro quo involving money or any other favors.”
[1]
Michael Vallez, owner of the app-review site Crazy Mike’s Apps, disagrees. He charges for reviews without
disclosing that to his readers, but he doesn’t guarantee a positive report. If he thinks the app isn’t worth
buying, he sends the money back and cancels the review.
The Wired article concludes with an opinion from Kenneth Pybus, a professor of journalism and mass
communication: “Undisclosed paid reviews are indisputably unethical because they manipulate the
public. That’s an easy call to say it’s ethically wrong because that is a disservice to readers. It ought to be
information that applies to readers and not information that advances you financially.”
Q U E S T I O N S
1. Professor Pybus believes there’s a conflict of interest operating when Vallez accepts money to write
reviews for his website Crazy Mike’s Apps. What, exactly, is the conflict?
2. Vallez says that his actions do not cause a conflict of interest, only the appearance of a conflict.
o What’s the difference between a conflict of interest and the appearance of a conflict of interest?
o How could Vallez argue that in his case there’s only an appearance, and, on close inspection, there
really is no conflict here?
3. Three standard strategies for alleviating ethical concerns surrounding conflicts of interest are
o transparency,
o recusal,
o organizational codes.
How could each of these strategies be applied to the conflict-of-interest issue at Crazy Mike’s
Apps?
4. You develop an iPhone app and you pay Vallez to review it. He tries the app, likes it, and writes up
a positive paragraph.
o Make the case to defend the payment as an ethically acceptable gift. Are there limits to how much
you could give before it would shift from a gift to a bribe? If there is a limit, how was the number
chosen?
Saylor URL: http://www.saylor.org/books Saylor.org
317
o Vallez says that if he doesn’t like an app he returns the money and refuses to review it. Does this
fact interfere with the possibility of justifying the payments as a standard, business-type gift?
5. Old style payola—paying to get a rock band on the airwaves isn’t dead. According to a story from
ABC News, the practice is alive and well; the only difference is that it’s no longer the deejays who
get the cash, it’s high-level executives because they’re the ones who set today’s playlists. Here’s a
comment from Foo Fighters drummer Taylor Hawkins: “I think back in the ’70s they used to pay
people with hookers and cocaine, and now they’re just doing it with straight-up money. So they
can all go out and buy their own hookers and cocaine.”
[2]
There’s a difference in the business world between providing entertainment and giving gifts. What
is the distinction?
o Why might entertainment be considered less ethically objectionable than gifts?
o Leaving aside moral concerns about hookers and drugs, ethically, is there a difference between a
rock group’s manager inviting radio executives out on a hooker and cocaine evening on one side
and just sending those cash on the other? If there’s a difference, what is it? If not, why not?
The Decorator’s Kickback
On a message board, Ms. G. C. from Miami writes,
Here’s the problem: an interior decorators bid is broken down into two parts-(A) the decorator’s
services and (B) the cost of labor and supplies. Most customers think (B) is a fixed cost-they forget
Imag
e rem
oved
due
to c
opyr
ight
issue
s.
Saylor URL: http://www.saylor.org/books Saylor.org
318
it’s not the decorator’s fault if cabinetmakers charge an arm and a leg. So, where do customers
look the closest when they’re comparing costs? That’s right, (A)-the decorator’s fee.
Well, decorators are creative people and for years they’ve been doing some very creative bidding.
They’ve been low balling (A) and padding (B), expecting the laborers to kick back a percentage of
their inflated fees to the decorator. Surprised? Everyone’s doing it. Everyone, that is, except me.
It’s deceptive. And as a Christian, I think it’s just plain wrong.
The customer’s final cost is about the same either way you cut it, so most decorators don’t feel
they’re doing anything wrong. Are they right?
Needless to say, “blowing the whistle” on such a widespread and accepted practice would only
damage my professional reputation.
[3]
Q U E S T I O N S
1. Mrs. G. C. confronts a third-party obligation. What is it?
2. Ethics can be weaponries—that is, used in your personal interest. Show how this could be the case here.
Does the fact that she would benefit by getting these kickbacks eliminated somehow make her position
less morally respectable? Why or why not?
3. Typically, according to Mrs. G. C, a client contracts an interior decorator. Later that decorator hires a
laborer, and the laborer gives the designer a kickback. There’s a conflict of interest here, what is it? What
is the ethical case against this kickback scheme?
4. Consequence theories of ethics represent the point of view that acts themselves are not good or
bad; all that matters are the consequences. Therefore, lying isn’t bad if it happens that a fleeing
criminal is asking you which way is the best escape route, and you point him down the street
leading to the police station. Duty theorists, by contrast, believe that certain acts including lying
and stealing are wrong regardless of the context and consequences.
o Do you suppose Mrs. G. C. adheres to a consequence ethics or a duty ethics? Why?
o Could you use the idea of consequence ethics to try to convince her to simply join the crowd and
do what everyone else is doing? What would that case look like?
5. If you wanted to put an end to this pervasive kickback practice in the interior decorating world
and only had time to present one argument, which of the following would you choose?
Saylor URL: http://www.saylor.org/books Saylor.org
319
o The practice should be stopped because it involves unethical kickbacks.
o It should be stopped because it’s dishonest in the sense that consumers are misled.
o It should be stopped because the straight shooter is getting the shaft.
Why did you choose that argument and how could it be elaborated more fully?
6. Imagine that Mrs. G. C. from Miami reveals her name and makes a whistle-blowing cause out of
her unhappiness with the standard practice in her profession.
o What kind of reprisals and negative effects might she expect?
o Do you believe whistle-blowing is justified in this situation? Why or why not?
o Is it required? Why or why not?
Sex, Money, and Whistle-Blowing
Like all recent NBA All-Star players, Kevin Johnson made a lot of money during his pro basketball career.
It drained out fairly quickly too. A few hundred-thousand went to the family of a sixteen-year-old high-
school girl in Phoenix after a he-said, she-said sex accusation. A decade later, a similar story emerged, but
at a different place: this time it was three girls in Sacramento, California, who attended St. Hope
Academy. They took their stories—each told of a similar incident involving Johnson—to the recruitment
advisor, Jacqueline Wong-Hernandez. Soon after, Ms. Wong-Hernandez was gone. Her resignation was a
protest over the way the complaints were handled internally at the school, which was by dismissing them.
Not only did St. Hope Academy take no action, the local police also decided not to press any charges in a
case that essentially came down to one person’s word against another’s.
Imag
e rem
oved
due
to c
opyr
ight
issue
s.
Saylor URL: http://www.saylor.org/books Saylor.org
320
St. Hope Academy, as it happens, wasn’t a public school but a private business, and Kevin Johnson was
the founder and CEO. A lot of the money flowing into the young institution came from the federal
government as grants from the AmeriCorps program. After accusations surfaced that the grant money
wasn’t spent appropriately, the school agreed to pay back $423,836.50 to the government (about half of
what the school had received). The first payment, about $73,000, was made by Kevin Johnson himself.
So things probably would have ended, except for an AmeriCorps inspector general named Gerald Walpin.
He believed Johnson had gotten way too good a deal: the school should have been forced to pay back
much more of the grant money it had received. On May 5, 2009, he took the accusation to a California
congressman who in turn brought public attention to the issue. On June 10, Mr. Walpin was fired. In an
editorial statement, the Washington Times complained, “Mr. Walpin was fired with no explanation and
no warning to Congress; even though the act governing inspectors general says IGs can be removed only
after the president gives Congress 30 days’ notice and a reason for the firing. Rather than investigate the
IG’s serious complaints, Mr. Obama fired him. In short, he snuffed out the whistleblower rather than heed
the whistle.”
[4]
A local Sacramento TV station doing some follow-up uncovered a report detailing hush money payments
at St. Hope and noted that the former NBA All-Star “often described himself as a personal friend” of
another avid basketball player, President Obama.
[5]
Q U E S T I O N S
1. How were the following two faced with a third-party obligation?
o Jacqueline Wong-Hernandez
o Gerald Walpin
2. In general, there are three possible responses to third-party obligations, do nothing, report the
problem, become a whistle-blower. How would you categorize the response made by
o Wong-Hernandez?
o Walpin?
3. What questions can be asked to help determine whether whistle-blowing is justified? How might
they be answered in the case of
Saylor URL: http://www.saylor.org/books Saylor.org
321
o Wong-Hernandez?
o Walpin?
4. What questions can be asked to help determine whether whistle-blowing is ethically required?
How might they be answered in the case of
o Wong-Hernandez?
o Walpin?
Loyal to the Badge
When police officer April Leatherwood went undercover in Memphis, she changed her name to Summer
Smith. She didn’t change her socks for a year—no showers or brushing her teeth either.
Her daily routine was to hang out on the street smoking and trying to befriend drug addicts. They’d take
her to their dealers, where she’d make a buy and then try to find out who was the next person up the
ladder. Her work resulted in about three hundred arrests, everyone from two-bit drug sellers to major
movers who organized the street-level crime from luxury apartments.
Why’d she do it? According to the newspaper article relating her story, she loved the camaraderie of the
department and its protect-and-serve mission.
When she emerged from the undercover program, she was promoted to detective. Unfortunately, her
three-year romantic partner had moved on, and it was difficult to get the bad memories out of her mind.
Still, when the reporter asked whether she’d do it again, she said, “Yeah.”
[6]
Imag
e rem
oved
due t
o cop
yrigh
t issu
es.
Saylor URL: http://www.saylor.org/books Saylor.org
322
Q U E S T I O N S
1. The two ideas on which company loyalty—or organizational loyalty to broaden the title—is built
are the following:
o An attachment to the organization that is non-instrumental, meaning the attachment is not
maintained only because it serves the employee’s concrete interests, such as the need for a
salary.
o A deposited value in the organization that goes beyond any individual and their attachment: the
organization’s value continues even without those who currently feel it.
How are these ideas manifested in the case of April Leatherwood?
2. Three measures on the scale of loyalty intensity are obedience loyalty, balanced loyalty, and free agency.
Given what you’ve read about Leatherwood, where would you put her on this scale? Why?
3. Think about one of the career lines you’re considering, or the one you’re currently on, and
imagine your company loyalty was similar to Leatherwood’s.
o What kinds of sacrifices do you imagine you’d make for the organization?
o Thinking about yourself, really, would you be able to make those sacrifices?
4. Leatherwood’s pay is not high, about $50,000 a year. That works out to about $7 an hour for the
twelve undercover months. Obviously she enjoyed no status while she was undercover. Now,
however, she has appeared in the newspaper and made detective grade in the department. In
your opinion from what you’ve read, do you believe she has acquired a level of status through her
work?
o If she has acquired a status, how would you describe it, what is it based on, how is it different
from the status enjoyed by, say, a senator or a movie star?
o Does this status—assuming she’s acquired it—compensate what she suffered? Explain.
Saylor URL: http://www.saylor.org/books Saylor.org
323
The Gawker Sex Tape
All kinds of things happen in advertising agencies. Part of the reason is the diversity: a typical medium-to-
large agency requires many different kinds of work, and that brings together a rainbow of people. There
are suited, business types in the client services section. They work with budgets and bulleted lists and
connect the agency with the corporate client. Down the hall the planners dress more casually and study
demographics and culture. They invent market segments with names like soccer moms and then devise
strategies for appealing to soccer moms’ distinct interests and tastes. Further down the hall, there are the
agency’s actual commercial makers. They call themselves creative talent and are free to appear for work
in jeans and ratty t-shirts. For their paycheck, they plan the short films the rest of us call TV commercials.
The typical large agency also needs some HR people, accountants, computer techs, and lawyers.
Most advertising agencies have a pretty good mix of men and women, and in general, there are a lot of
young people in the field because the long hours and short deadlines tend to lead workers to seek
employment elsewhere eventually.
Most agencies are good places for romance. The chemicals are right: young workers, long hours, the
excitement of million-dollar accounts, and lots of different types of people for different tastes. Those are
also, as it happens, good ingredients for sex, as people at BBDO (an Omnicom agency) in New York City
discovered when a grainy cell phone movie went viral. Shot by a guy in the creative department, he stuck
his camera over the top of a cubicle and caught a nude couple wedged into the back corner.
As far as the scandal went, it didn’t take long for industry insiders to figure out who’d been caught, and
from there, the information spread that they were both married to other people. The website Gawker.com
followed the action closely, posting the original film and then running follow-ups. In a nutshell, this is
Image
remo
ved d
ue to
copyr
ight is
sues.
Saylor URL: http://www.saylor.org/books Saylor.org
324
what happened. The romantic couple continued at their jobs. No word about how their marriages are
doing. The filmer got fired. He downloaded the footage onto his computer and then sent it around to a few
friends. He had nothing to do—he says—with the fact that a few weeks later it was all over the web. In his
words,
It ended up on Gawker and Media bistro and then the word got back to me that all the creative’s
were sending it around. I freaked. I thought it was amazing how something could go viral and
end up online so quickly when I had nothing to do with it really.
[7]
Well, he was the one who filmed and originally distributed it.
The discussion posted on the Gawker web page is probably hotter than the sex that got everything going.
Many issues come up, including: Why did the filmer get fired while the adulterers got to keep their
jobs? One answer someone wrote in is that filming and distributing a sex tape is unethical (and possibly
illegal if minors end up seeing it). A poster who calls himself BritSwedeGuy responds:
How could you be sacked for filming something you could see at work?
Would he have been sacked if he’d taken the video to HR?
Probably not.
So is he being sacked for withholding evidence then?
That only makes sense if the evidence was of a sackable offence.
Has he been sacked for passing the video on? Surely he’s a whistle-blower in that case and ought
to be protected.
This is his argument. First, it doesn’t make sense to fire the filmer for recording the sex, since the act took
place in public, and anyone (tall) could’ve seen it. The perpetrators couldn’t reasonably object to being
filmed if they were exhibiting themselves so openly. Second, if the filmer had taken the film to HR to
report the fact that sex was going on, he probably wouldn’t have been fired, and the entire episode
would’ve been managed internally (and quietly) inside the agency. That means the only justifiable reason
for firing the guy was that he digitalized the video and, in essence, made it possible for others to beam it
across the Internet. If that’s what he did, though, then he’s a whistle-blower and should be protected.
Saylor URL: http://www.saylor.org/books Saylor.org
325
Q U E S T I O N S
1. If the filmer did take the video to the human resources department, what would he be reporting?
What ethical misdeeds are happening?
o With respect to those misdeeds, where does the line get drawn between flirting for a second and
stripping down for a fifteen-minute frolic?
2. On the question of whistle-blowing—and the possibility that the filmer’s action was ethically
justifiable as a form of whistle-blowing—a poster named Bad Uncle isn’t buying it. He writes, “OK,
I’ll be less glib. I don’t see how f***ing someone is a major ethical violation worthy of whistle-
blowing (fnar)…it’s hardly damaging to a company, its clients, or its employees. Wake me when
their monotonous thrusting implants the seed of fraud into an earnings statement.”
Bad Uncle doesn’t think the filmer could defend himself by claiming to be a whistle-blower. In
your own words, why not? Do you agree? Explain.
3. Do you believe the filmer sensed a company loyalty? Would a stronger sense of company loyalty have
encouraged him to erase the tape instead of disseminating it? Why or why not?
4. Advertising agencies are notorious for fast money and little loyalty to their employees. Many agencies, if
they lose an account, straight off fire many of those who worked on the account even if the loss had
nothing to do with the employee’s work performance (the client may have discontinued a line of products,
for example, and for that reason discontinued the advertising). Given that business attitude, does the
company have a right to demand that employees think of the agency’s interests when doing things like
filming? Why or why not?
5. Work in advertising—especially in the creative department where people often have to actually make ads
for air right now—is very stressful. There’s a lot of money involved and a lot of competition among
creative’s. Do you believe sex at work is an ethically defensible way of alleviating the stress comparable
with taking a cigarette break or just a quick walk around the block? How could the argument be made in
favor?
6. If someone told you they wanted to work in advertising because it’s a good spot to meet someone and get
married (which is probably true at most agencies), do you believe that’s a reasonable decision, one in
harmony with the ethical responsibility to pursue one’s happiness and welfare? Why or why not?
Saylor URL: http://www.saylor.org/books Saylor.org
326
7. If someone told you they were going to work in advertising because they’d heard it’s a good place for fast,
cheap sex (which it probably is at most agencies), do you believe that’s a reasonable decision, one in
harmony with the ethical responsibility to pursue one’s happiness and welfare? Why or why not?
[1] Brian X. Chen, “Fallout from Wired.com’s iPhone App Payola Story,” Wired, Gadget Lab, March 24, 2010,
accessed May 19, 2011, http://www.wired.com/gadgetlab/2010/03/app-review-payola-reaction.
[2] Brian Ross, Richard Esposito, and Vic Walter, “Pay to Play: Music Industry’s Dirty Little Secret,” ABCNews.com,
February 8, 2006, accessed May 19, 2011,http://abcnews.go.com/Primetime/story?id=1591155&page=1.
[3] Ms. G. C. from Miami, “The Case of the Casual Kickback,” Urbana.org.
[4] “Editorial: Stonewalling on Walpin-gate,” The Washington Times, July 10, 2009, accessed May 19,
2011,http://www.washingtontimes.com/news/2009/jul/10/stonewalling-on-walpin-gate.
[5] “Report: Johnson Offered to Pay Accuser,” KCRA.com, November 20, 2009, accessed May 19,
2011, http://www.kcra.com/news/21679385/detail.html.
[6] Kristina Goetz, “A Year of Living Dangerously Takes a Toll on Undercover Memphis Officer,” Commercial Appeal,
August 30, 2009, accessed May 19, 2011,http://www.commercialappeal.com/news/2009/aug/30/year-of-living-
dangerously-takes-its-toll.
[7] Hamilton Nolan, “The Cameraman Speaks: He’s Fired but the Sex Tape Couple Keep Their Jobs,” Gawker,
November 26, 2008, accessed May 19, 2011,http://gawker.com/5099143/the-cameraman-speaks-hes-fired-but-
the-sex-tape-couple-keep-their-jobs.
- Structure Bookmarks
Chapter 7: Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5
Chapter 7: Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5
Chapter 7: Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5
Chapter 7: Employee’s Ethics: Making the Best of the Job You Have as You Get from 9 to 5
from The Business Ethics Workshop was adapted by Saylor Academy and is available under a
Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported
Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported
license without attribution as requested by the work’s original creator or licensor.