“It takes 20 years to build a reputation and five minutes to ruin it,” warned Warren Buffet, renowned for his long-term investment perspectives. “If you think about it for a moment,” he continued, “most people would do things differently.”
His remark seems ever more apposite in the wake of apparently endless corporate scandals, corruption and misbehaviour.
With the shredding of the reputations of numerous acclaimed enterprises—for example how long will it take for Barclays’ chief executive to reach his publicly declared goal of restoring the banks Libor damaged image—commercial concerns are increasingly focused on areas where Human Resources professionals can make a significant contribution in strengthening the organisation’s ethical approach.
An understanding of human behaviour and motivation is intimately connected to ethical concerns. For example HR has something relevant to say about how to get people to behave in accordance with agreed rules or codes. HR principles also provide guidance on how to encourage people to sufficiently adopt the values of the organisation so they are willing to speak up about ethical abuses and malpractices that can affect reputations. This can lead to partnering with senior management in a number of ways, including strategy (see above), as a change agent, as an administrative agent and an employee champion.
When HR practitioners proactively work as change agents for example, they can bring their ethical perspective to bear on several important corporate areas where reputation matters a great deal. These include employee behaviour that may affect company branding and image, and risk management with its complex web influences include globalisations, regulations, and the forces of competition.
HR practitioners can also act as an employee champion, using an ethical perspective. For example, whether and how far employees identify with their organisation is an important precursor to corporate reputation. Effective HR practices increase employee commitment which in turn strongly influences customer loyalty and ultimately profitability. Those who identify with their organisation are more likely to engage in behaviour that supports the organisation—defending its ethical reputation and acting in its best interests.
The employee champion role helps maximises employee contribution, for example ensuring people have meaningful work and are competent to do their jobs. This may mean addressing a wide range of concerns, including fair pay, adequate benefits, a harassment free work place, safety and job satisfaction. Through all these runs an ethical perspective that HR can use to guide the organisation and built its reputation as a good place in which to work.
The HR function can potentially influence corporate reputation in significant ways particularly bringing its unique ethical perspective to many important areas of operation.
For instance HR can establish policies and procedures so that employees behave ethically with consumers, regulators and other external stakeholders. With the battle for talent become ever more intense, organisations with positive corporate reputations based on ethical behaviour will be at a competitive advantage in attracting the right people.
This is the fourth article in our series on the ethical responsibilities of human resources.
NO HIDING PLACE
is a new White Paper from Maynard Leigh Associates based on this series and available from November 2013.
For a copy of this White Paper simply send an e-mail headed WHITE PAPER to firstname.lastname@example.org.