Managing a Diverse Workforce and Legal Compliance

21/02/2014

Today’s topics

1. The Strategic Importance of Fairness and Legal Compliance

2. What ‘fairness’ means to employees 3. Legal means to ensure fair treatment 4. Settling disputes 5. Proactive approaches to ensure fair

treatment 6. Challenges for the 21st century 7. Case Study: Campbell and Nako

Diverse Workforce

Similarities and differences among employees in terms of age, cultural background, physical abilities and disabilities, race, religion, sex, and sexual orientation.

Legal Compliance

In the legal system, compliance usually refers to behavior in accordance with legislationExample: You agree to comply with all applicable domestic and international laws and regulations regarding your use of the Site and the Content and Materials provided therein.

1. The Strategic Importance of Fairness and Legal Compliance

Society and the law - Companies must continue to adjust to

society’s view of fairness e.g. the tuition fees imposed by UK

universities from 2012-2013 onwards (increase of fees led to 15000 less applications)

Concerns of the labour force - Represented by Unions which voice the

employees’ concerns (pay, working conditions) through collective bargaining with employers

The Strategic Importance of Fairness and Legal Compliance

Customers win when employers treat employees fairly

- Good for business, especially in the service industry, jobs where the employee meets the customer … in fact all sides win (win-win situation)

The HR Triad - HR professionals enforce the employers’

legal responsibilities and consequently they protect the legal rights of the employees

The Strategic Importance of Fairness and Legal Compliance

- HR professionals ensure the development of the organisation’s policy throughout its entirety, provide training and act as mediators when conflicts arise

- Line managers are concerned with fairness and legal compliance on a daily basis … a more behavioural attitude

- Responsibility for reporting illegal behaviour (do they win something from this?), respect towards the organisation’s property and intellectual capital (what is this?)

2. What fairness means to employees

It can happen to everyone … a missed promotion / an unexpected layoff (in some sense they mean the same thing?)

Distributive justice, in terms of: - (promotion / layoffs) - Pay - Performance evaluations

What fairness means to employees

Reactions to unjust treatment - Quit the job - Accept the situation - Payback - Talk to people (formally and

informally) - External authorities (unions,

lawyers)

3. Legal means to ensure fair treatment

A country’s constitution - e.g. USA’s constitution defines the

structure and power (limits) of the federal government and the states

Title VII of the Civil Rights Act - Prohibits discrimination by all

parties on the basis of race, colour, religion, sex, national origin and pregnancy

What do you think is the difference between UK law system and US System?

Legal means to ensure fair treatment

Common law rules, the England example - Made by judges as they resolve disputes

between different parties - Judges use legal precedents, i.e.

important decisions made in the past which are used to make a decision in a new case

- When new cases arise, new laws are made! Vs US judges don’t make new laws, they only interpret the existing ones

4. Settling disputes

Using the Courts - Monetary damages: when an employee’s

legal rights have been violated and resulted in injury

→ compensatory monetary damages help victims recover what they have lost (e.g. back pay and attorney’s fees)

→ punitive monetary damages punish wrongdoers and deter future wrongdoing

Settling disputes

- Settlement Agreements: the employer doesn’t agree to wrongdoing but still pays some money to the plaintiff

e.g. lawsuit against Coca-Cola for racial discrimination against African – American employees

→ paid $40000 for each of its 2000 black employees

→ set aside $59 million to cover claims for emotional distress

→ set aside $67 million to correct past pay disparities and eliminate future ones

Settling disputes

Company grievance procedures: encourage the employees to voice their concerns to the organisation instead of the courts and seek solutions without litigation

Step 1 – an employee who is unhappy with the application of a policy to a particular incident, can file an appeal within 7 days .. Then the employee relations representative sets an appeal board with 2 random members from the management and 3 employees from the same job category

Settling disputes

Step 2 – The supervisor describes the situation and the employee explains why he thinks he was treated unfairly .. Board members ask questions / hear testimonies

Step 3 – When all the information is gathered by the board members, the case is privately discussed and a majority vote is used to decide whether to uphold the action, reduce the severity or overturn it completely

Settling disputes

Alternative dispute resolution (ADR): making an agreement to forego litigation and resolve disputes by internal or external mediation or arbitration

Mediation: all concerned parties represent their case to a neutral party (the mediator)

- mediators may be appointed by a judge who is selected by the parties in question

- parties are often asked to write a confidential statement of their view of the case and a list of acceptable resolutions which are represented to the mediator in a private meeting

Settling disputes

- in effect, the mediator’s role is to help parties to understand each other’s views and their relative strengths and weaknesses

- mediation is less formal and public and more flexible

e.g. the US postal service resolved 17645 disputes only 3 years after it began using the Redress mediation process

The REDRESS program was born out of the settlement of a class action lawsuit filed by employees in the Northern District of Florida. Among their complaints was that the Equal Employment Opportunity (EEO) complaint process was too slow, remote, and ineffective in addressing workplace disputes. After reviewing the alternatives, all parties agreed that the development of a workplace mediation program might be an effective way to address these concerns. Thus, REDRESS mediation began as a pilot program in 1994 with three Florida sites. As the result of a commitment from management, employees, and their representatives, it continued to grow bigger and better. Today it is available to all Postal employees nationwide.

Settling disputes

Arbitration: more formal than the mediation process but still less formal than court proceedings

- employees have representatives (usually attorneys) for their case who then represent the case in a formal manner

- decisions are made by a panel of arbitrators but unlike court situations, they don’t provide written decisions or use previous decisions to come to their own ones

5. Proactive approaches to ensuring fair treatment

Diversity initiatives Policies and practices that the

organisation adopts voluntarily for the purpose of ensuring that all members of a diverse workforce are treated fairly

- Who is covered: e.g. The Federated Department Stores

covered only 2 employee groups in 1996, women and minorities. Today they cover more than 25 employee groups, including seniors, disabled, homosexuals, atheists

Proactive approaches to ensuring fair treatment

- A culture of inclusion: Not simply trying to obey the (formal) law but creating a culture where everybody in an organisation feels part of the system (equal opportunities / fair treatment)

- Evaluating the effectiveness: e.g. some of the Montgomery Watson

Harza’s scorecard items were the number of ‘diverse’ new hires, ‘diverse’ candidates who achieved a

certain hierarchical level

The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

Montgomery Watson Harza (a global engineering company): This Company thrives on teamwork and considers diversity to be an essential element for achieving success. The senior leadership participated in diversity training sessions. Network groups were established for employees with common backgrounds and interests.

The quarterly newsletter of the company carried stories describing the contributions made by diverse employees of the company. A diverse council was established to advice management on the effectiveness of diversity policies and behaviors. Provided numerous courses at the MWH university. To measure the effectiveness of their diversity management initiative, the senior managers created a balanced scorecard.

Some of the items on the scorecard were: A. the number of employees that attended the company’s courses. B. Being named as one of the best companies for women and minorities to work for. C. The number of diverse new hires throughout the company. D. The number of diverse candidates who achieved the level of vice president or above.

Proactive approaches to ensuring fair treatment

Harassment policies Diversity management initiatives and

harassment policies should be treated together, aiming eventually at improving working relationships.

Proactive approaches to ensuring fair treatment

- What is Harassment?: behavior that creates a hostile, intimidating, offensive working environment which then interferes with an individual’s ability to execute his responsibilities

- Preventing Harassment: Clearly inform employees of the rules Establish procedures to detect harassment

and handle complaints Provide protection to those involved in

harassment investigations Provide a fair system for discipline and

punishment

6. Challenges for the 21st century

Employment-at-will At the beginning of the industrial era, employers

managed their businesses under the assumption that they had the right to terminate employees for any reason

This is the opposite right of the employees to leave their job for any reason

- Limits to employment-at-will: since 1884, certain laws (e.g. the Civil Rights Act, the Age Discrimination in Employment Act-ADEA) state that certain characteristics cannot be used for employment decisions of any kind

Challenges for the 21st century

- Procedural Justice: termination of employment should be the last step in a series of documented steps designed to ensure that the employee understood that performance problems existed and was provided with the opportunity and training to improve

- Implied Contracts: the employees’ beliefs about the agreement that an employer has with them regarding their conditions of employment, including verbal communication during daily experiences

- Explicit Contracts: contrary to the implied, these are written down and often appear in policy manuals that contain clear language

Challenges for the 21st century

Employee Privacy The Privacy Act of 1974 gives individuals

the right to verify information collected about them and used in selection and general employment decisions

Fairness in the Global Context - Work conditions and pay - Terminations and Layoffs - Privacy

7. Case Study

Stuart Campbell and Nako Electronics

Read the case study and answer the questions

Discuss in class