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Unethical Practices in HRM | Company Management

After reading this article you will learn about the unethical practices in various fields of HRM.  

The employees function, involvement, loyalty, dedication, discipline and decision making plays a very big role in success of an organisation. However great facilities, machinery and buildings a corporate provides, it is ultimately people who have to make them workable and achieve organisation success.

There are various methods of recruitment, selection and training employees. Despite this the changing trends in technology, environment, competition and comparisons make it difficult to have 100% suitable personnel for various positions. Even those who are excellent or experts in due course of time may not have some reputation due to changes and constant need to upgrade the skills and knowledge.

In order to survive in the competitive world the employees resort to various fair and unfair means. Those who adopt fair means achieve slow growth. Employees following unfair methods are likely to grow faster or loose the job, which means they are taking known risk in chase of greed.

Human aspects and human relations are applicable anywhere and in any department. Hence individual behaviour, group behaviour, personality, attitudes, perception, conflicts, leadership are some of the factors which came into factor to evaluate fair-unfair, good-bad or ethical-unethical behaviour.

This subject of evaluation should also take care of situation, the organisational work culture, compulsions, expectations and peer pressure. Employees have feelings, likes, dislikes, joys- sorrows, emotions and the behavioural pattern tend to change with experience.

Higher the experience level better will be the work ethics. It is newer and less experience employees, who need to be trained, groomed and shaped for work effectiveness and ethical values.

All types of human beings are involved in work related behaviour.

We have to attribute this (ethical and unethical) behaviour to:

(a) Employers,

(b) Employees,

(c) Government agencies,

(d) Manpower consultants and

(e) Outside sources like vendors and dealers.

Behaviour varies as per inducements, likes-dislikes, greed, wrong perceptions and bias. The behaviour and actions are aimed to achieve the organisational objectives and mostly ethical and fair.

However unethical or unfair kind of behaviour and action can happen in different categories as follows:

(a) Employers:

They sometime indulge in unfair practices like one or more of the following:

(i) Creating split in union leaders by inducing regionalism, casteism or ego problems

(ii) Not caring for just demands of the Trade Union and not behaving respectfully with union leaders.

(iii) Trying to create rift between different unions if there are more than one recognised union.

(iv) Biased attitude in selection, transfers, promotions, and training and development activities.

(v) Giving different treatment and facilities to different people in the same level posts.

(b) Employees:

However some common problems are as follows:

(i) False claim of age, qualifications and experience. Some even forge marks cards to claim certain qualifications.

(ii) Producing fake certificates of SC/ST category to obtain a job in that category.

(iii) Head of personnel projecting or short listing candidates belonging to his commonly, region or religion.

(iv) Creating transfers, openings, promotions suiting to their own kith and kin.

(v) Taking decision very slow or very fast to suit conveniences of own kith and kin.

(c) Government Agencies:

Government agencies role is reducing year after year due to lesser employments in government sector.

However the unfair or unethical practices continue in government sector in following manner:

(i) Announcing the vacancies and not taking any action further. Not clear about processing dates, written tests/interview dates and selection dates. Accountability is totally lacking.

(ii) Functioning of government employment offices is not transparent, not reliable and in fact its purpose is not well served.

(iii) Government offices and selection committees will be excessively cautious of reservation quotas and possible court cases rather than going through the responsibilities in an unhindered manner.

(iv) Most of the time the government selections get stalled or delayed due to situations like question paper leakage or court cases,

(v) The government method of selections is at best suited to low paid jobs and not for senior level posts.

(d) Manpower Consultants:

By and large manpower consultants do a good job as mostly they are hired by the private organisations. Moreover their services are mostly for official posts and there is no statute to follow rules of reservations.

However, here also sometimes certain unfair strategies do take places:

(i) Consultants tend to play the caste and regional game since they are free to operate the way they like.

(ii) There is possibility between HRD managers of corporate and consultants to organise selections as per their own plans and strategies which invariably helps kith and kin, community and regional following.

(iii) Some consultants guide candidates to alter the bio-data to suit the corporate.

(e) Outside Sources:

The outside sources dealing with corporate are vendors, dealers, traders, customers, courier service, statutory offices representatives, banks and financial institutes. The interaction of these people will be more frequent, though there are many more people contacting the corporate.

The conduct, transactions and dealings of these outsiders also influence the ethical and unethical values and conduct of corporate employees. It is very important that outsiders conduct themselves in such way that the values and attitudes of both sides are fair and just. Deviation of fair attitude leads to wrong decisions, corrupt practices and damage to the corporate reputation.

From various explanation given in (a) to (e), your will find that the role of human behaviour, attitudes, perception and values lead to display of certain conduct by action or reaction and this conduct be fair-unfair or ethical-unethical to observers.

Box 14.1 gives an example:

Performance Appraisal:

Performance appraisal is a method of evaluating the behaviour of employees in the work spot. It covers both quantitative and qualitative aspects of job performance.

Performance appraisal is essential to understand and improve the employee’s performance through HRD. In addition to salary revision, promotions and transfers it helps to develop human resources. It indicates the level of desired performance, level of actual performance and the gap between the two.

Following methods are used for performance appraisal:

(1) Graphic Rating Scale

(2) Ranking method

(3) Pared comparison method

(4) Forced distribution method

(5) Checklist method

(6) Critical incident method and

(7) 360° appraisal.

Different companies use different methods for different levels. There are advantages, disadvantages in each method. However the commonly, observed wrong practices in performance appraisal are as follows:

Rating Biases:

Since this is not easily verifiable by others given scope for bias.

The rater’s bias includes:

(a) Halo effect,

(b) The error of central tendency,

(c) The leniency and strictness biases

(d) Personal prejudice and

(e) The recency effect.

(a) Halo effect:

It is the tendency of the rater to depend excessively one trait or observation in rating all other traits or behavioural considerations.

(b) The error of central tendency:

This is play safe method to go on giving average rating on all the traits. This they do to avoid explanations to both seniors and juniors who may ask questions for extreme ratings. Alternately the rater may not himself be in a position to rate accurately due to various reasons.

(c) The leniency and strictness:

The leniency bias crops when some raters have a tendency to be liberal in their rating by assigning higher rates consistently. Such ratings do not serve any purpose. Equally damaging is assigning consistently low rates.

(d) Personal prejudice:

If the rater dislikes any employee or any group, he may rate them at the lower end, which may distract the rating purpose and affect the career of their employees.

(e) The Recency effect:

Remembering the recent actions of the employee at the time of rating and rate them on the basis of the recent actions – favourable or unfavourable – rather than on whole years activities.


Discrimination is one of the oldest unfair practices going on all over the world in both formal and informal way of working.

Some of the glaring olden day examples of discrimination are:

(1) In India for centuries the caste system (upper caste, lower caste) has been in practice. This was creating inequality and unfair treatment to one segment of society to another. Similarly women were always treated as second grade citizens of the society.

(2) In USA, until 1857, black people had no legal status. Women were not allowed to vote. Thus both low caste people and women were discriminated. It has taken centuries of struggle to get some respectable status to women, down trodden people, tribals, aborigines and black people in a white majority country. The deep rooted socio- cultural practice is not totally eradicated. It is still practiced to some extent in implicit manner. Fig. 14.1 and 14.2 display various types of discrimination.


Origin of Discrimination

Discrimination Practices

Discriminatory practices in organisations covers unequal treatment between individuals and groups and between men and women. The preferential or unequal treatment can be based on gender, race, colour, religion, national origin and region within the nation. In India there are also demarcations of minority and majority community.

The discrimination of one or more of the types explained come in the work of selection, training, promotion, transfer, termination etc. The extent of discrimination depends upon the attitude of the CEO or the head of the department. His training grooming and socio-cultural values play a significant role in fair attitude and avoiding the discrimination.

Unequal pay for equal work is another dominant case of discrimination. Difference in wages and salaries of men-women, different men of same skills is happening all over India.

Though preamble of the constitution talks of equality, justice fraternity etc., the practice of their topics is not fully well done even after 57 years of independence. In certain organisations the union leaders will be creating problems by bringing up various grievances. Sometimes it becomes necessary to silence them by unusual methods as explained in box 14.2.


Employment Issues

Reverse Discrimination:

In this process on equally qualified women or low caste person is given preference over a upper caste man. This is to state that some such drastic steps will help to halt the discrimination against women and low caste people.

However reverse discrimination efforts can help once a way and not all the time. It should be utilised on a selective basis to send a clear message to employees that women and low caste employees should be given equal opportunities.


Selecting a particular race of people represents to somehow selecting from their own group. This is more applicable at national and international level of selections. Race represents a broad group. Traditionally Dravids, Aryans, Mongols, Nigros, Whiles are broad races. However, in international selection criteria the race may represent a country or continent.

It has become a common observation to have selections from the same race as that of promoter. For example, Mr. Laxmi Mittal has large size steel plants in various parts of the world and not in India. Majority of his directors or key personnel are Indians. Similar practice is followed by many other promoters of foreign owned MNCs like Toyota, Hyundai, and Honda etc. This can be branded as favoritism or biased attitude.


Disabled persons are employed in India in public sectors and government offices due to the rules and reservations applicable to them. However, most of the disabled people are neglected in terms of selection and after employment.

Some of the disabled persons are quite good in their work. However, the society treats them in an unfair manner. It requires a broad minded approach to take good care of disabled people in selection and in employment. Such attitude can come up with employers on their own or due to advise of religious heads and not by enforcement of law.


Employment Issues:

In developing world the employment issues are still to get stabilized satisfactorily. The employment, working conditions, exploitations and unfair practices still continue due to lack of organisation amongst employees.

Some of the examples are explained hereunder:

(1) Hiring Firing:

In India many of the workers in project sites, construction works, agriculture and agro based industries are employed very fast and are removed whenever work or season is over.

This kind of hiring-firing is causing seasonal, disguised and industrial unemployment. It is fair to employ them and unfair to remove them abruptly. A system has to be devised to organise the labour and utilise them on alternate work or arrange some kind of a lower level compensation package on lean period.

(2) Dual Responsibilities of Women:

It is fair to say that women have equal opportunities in jobs and salaries. But invariably women play a dual or triple role of job, home and children responsibilities. Hence she needs more leave and flexible work timings. It is unfair not to give them leave whenever asked and it is disadvantages to company to give too much leave. Hence the situation calls for a separate consideration for women employees.

(3) Knowledge Base:

The senior and experienced employees are finding themselves at wrong end in terms of emoluments and encouragement. This is due to fast change of technology and knowledge base. The younger generation is quick to adapt to changes. Hence the gap is difficult to fill and the disparity will continue till retirement of elderly employees.

(4) Reverse Mentoring:

Due to computerization and e-commerce there is a trend of younger people mentoring elderly colleagues. This is due to fast changes in style of functioning and corresponding training essential for sustenance in jobs.

(5) Unlimited Hours of Work:

Since last 10-15 years there is a revolution in working hours. Younger generation now works from 10 to 14 hours/day compared to 8 hours of standard work. Even women employees work long hours, night shifts and go alone on overseas trips to attend their project work.

The ITES and BPO companies have totally changed the limitations of salaries and work hours in India. This has increased employment opportunities and at the same time has lead to lots of objectionable habits in younger personnel.

(6) Talent and Compensation:

These days it is found that employees at early age of 30 to 45 years becoming CEO, MD and Chairman of Corporate. In earlier decades it was unwritten rule to have top executives only in the age range of 50 to 80 years.

The salary structure also has substantially changed and youngsters are getting six figures salaries, these days. This was unheard off just two decades back. Employment issues are dynamic and tend to change too often. The employees should be flexible to adapt to changes. Box 14.1 is an example of flexibility by the Director (HR) of a company. Similarly box 14.3 is another example of a strategy in HRM.


Divide and Rule

Surplus Stock


Harassment is making difficulties to the employee to work or perform his duties. Harassment tactics are resorted by the bosses or co-workers with ulterior motives. Harassment in a work place is common to take revenge or to make a worker humiliation in his work place or living areas.

Harassment may be four types:

(a) Mental,

(b) Physical,

(c) Mental and Physical, and

(d) Sexual.

Of these the first three will be for men whereas a lady employee may be given of all the four types of harassment. Harassment methods are set in few companies as ongoing culture. It basically starts from dark side of human moral side.

Some of the common harassment methods are:

i. Frequent change of work place, transfers

ii. Changing shifts and duties

iii. Calling for emergent work often in the evening or nights

iv. Making lewd or bad remarks

v. Calling names or abuse

vi. Making to run around in the work place without valid reason

vii. Shouting in presence of other employees

viii. Demotions or removal from service without valid base

ix. Differentiating between employees considering their caste, region or language

x. Spreading rumours

xi. Holding due payments

xii. Physical handling or physical fights.

Sexual Harassment:

All over the world governments have made rules to protect women against sexual violations. In case of Islamic countries however there are more restrictions and a kind of unequal treatment towards women. In developed countries women work in almost all the areas where men work.

In poor and developing countries women work in selected areas and that too in smaller percentages. In India only in teaching profession the women participation is quite good and up to 40%. In all other working areas it does not exceed 20%. Sexual harassment to a person creates ‘hostile work environment’ to that person.

Such harassment could be due to any of the following factors:

i. Unwelcome sexual advances, request for sexual favours, verbal or physical conduct of a sexual nature.

ii. Submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment.

iii. Submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such an individual or

iv. Such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive work environment.

v. Favouritism and giving undue excess facilities and increments may also have same kind of implicit threat.

vi. Writings on bathroom walls, display of pornographic pictures in work place.

vii. There are rare examples where women deliberately wear exposing dress to attract attention of male colleagues and talk with extra sweet words and too pleasant mannerisms. Though this type also can be branded as sexual harassment, such cases are very rare and no complaints are made. At best the boss calls such women employees and asks them to come in proper dress code as per the local tradition and ethics.

Indian Scenario:

In India the proportion of women employees is increasing since last 10-15 years due to growth of ITES and BPO Sector. The women employee percentage in these large scale companies is around 30%. Moreover in BPO companies the work hours are mostly sunset to sunrise that is throughout the night.

Such situation and more numbers have given angle scope to indulge in willing and unwilling sexual relations. There are more and more cases of sexual harassments in MNCs. This has also lead to more and more love marriages, short-time companionship, living-together type arrangements which were unheard in the Indian society. These companies have slowly changing the socio-cultural values of India.

In Indian conditions women do not complain to employer or go to courts due to fear of creating ill-reputation for self. Most of the cases get hushed up untold. Very few cases are facing enquiry in office or go to court.

Even in courts the case gets delayed and it is difficult to prove the harassment due to proofs, witness’s problems. Hence law is not as effective as it should be to punish the offenders and discourage such incidents.

Precautionary Measures:

The concept of training and development should include the conduct towards opposite sex. So far in India the training and development programmes cover only work related activities and improvements. The conduct part is not given any scope and it is assumed that everyone’s conduct is good. Sometimes there is very little difference between casual talk or sexually indicated utterance.

Hence men can use following guidelines:

i. If you are unsure of having offended, enquire her. Than better to apologies to reduce tension.

ii. Speak to others if your behaviour with a particular woman was wrong. This will enable you to correct yourself and save being subject of ridicule.

iii. Women’s silence should not be treated as tolerance or acceptance of your excessive interest in her. She may be avoiding confrontation or want you know she has no interest in you.

iv. Be part of an accepted socio-cultural system of the region you are working in. Too much of deviations from norms will be suspected.

Sample Corporate Sexual Harassment Policy:

(1) Sexual harassment is a violation of the corporation’s EEO policy. Abuse of anyone through sexist slurs or other objectionable conduct is offensive behaviour.

(2) Management must ensure that a credible program exists for handling sexual harassment problems. If complaints are filed, they should receive prompt consideration without fear of negative consequences.

(3) When a supervisor is made aware of an allegation of sexual harassment.

The following guidelines should be considered:

(a) Obtain information about the allegation through discussion with the complainant. Ask for and document facts about what was said, what was done, when and where it occurred, and what the complainant believes was the inappropriate behaviour. In addition, find out if any other individuals observed the incident, or similar incidents, to the complainant’s knowledge. This is an initial step. In no case does the supervisor handle the complaint process alone.

(b) If the complaint is from an hourly employee, a request for union representation at any point must be handled as described in the labour agreement.

(c) The immediate supervisor or the department head and the personnel department must be notified immediately. When a complaint is raised by, or concerns, an hourly employee, the local labour relations representative is to be advised. When a complaint is raised by or concerns a salaried employee, the personnel director is to be advised.

The personnel department must conduct a complete investigation of the complaint for hourly and salaried employees. The investigation is to be handled in a professional and confidential manner.


Employee’s right to privacy came to mean “to be left alone”. In other than working house an employee is free to spend time as he likes. During working hours every employee should have adequate space or ‘zone of privacy’.

This is to protect employees in need for peace, their dress, manners and grooming and their personal property in the work place. For a long time the employee privacy subject was not well understand. In last 10-15 years the technology growth has made it clearer to understand the need for privacy protection.

Some of the court upheld privacy violations are as follows:

1. Intrusion in locker rooms and bath rooms by surveillance.

2. Publication of private matters.

3. Disclosure of medical records.

4. Appropriation of an employee’s name for commercial uses.

5. Retrieving or accessing employee e-mail, unauthorized way.

However some permissible employee privacy inquiries are:

(i) Criminal history inquiries

(ii) Credit history inquiries and

(iii) Access to medical records.

Polygraph Testing:

Polygraph and psychological tests are done by some executives to prevent and detect crime in the work place and this is violation of employee rights.

These tests to be avoided as:

i. They are not reliable or valid and are at best indicators.

ii. Test results, to some extent can be manipulated by the operator.

iii. The tests may include irrelevant questions pertaining to a person’s privacy.

Work place Surveillance:

Employers can detect employee’s speed of work, number and length of phone calls made and received, rests period and number of hours the machines are used. Though these factors may be part of work study it is also true that some companies use it for surveillance.

Guidelines on privacy in work place:

i. A company should seek private information only for legitimate purposes.

ii. Seek permission of employee before using his/her name and photograph for any commercial advertisement.

iii. If any drug abuse, necessary medical test is to be carried explain the employee about its need and importance rather than scaring them. Convince about confidentiality and inform test results and abuse for improvements. Such practice will get positive attitude.

Privacy subject in Indian conditions is having more of categorisation of men and women work places, rest rooms, swimming pool timings, separate sitting rooms, waiting rooms than anything related to surveillance or drug tests etc.

This is due to the fact that is poor and developing centers the women employees are not treated equally and feel uncomfortable to work under women bosses. Traditionally women too don’t feel bold enough to enjoy equal status.

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Salman Qureshi

Salman Qureshi is an Accountant by profession & he loves to write on Commerce & Management Sciences Subject to assist Students. Hope you guys will like his effort.