Corporate Corruption and the HRM Function: Legal, Ethical, and Moral Perspectives
February 12, 2025
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Ensuring fair pay and perks packages across the organizational hierarchy can be challenging for Human Resources or HR Personnel.
Therefore, HR has to make difficult choices when determining pay and perks packages. Moreover, the Line and the Middle Managers have to work closely with the HR in designing effective pay and perks packages for everyone from new hires to the experienced employees.
The point to be noted here is that any compensation package that is designed would still leave employees wanting for more as the modern day Corporate system is made for Unlimited Greed whereas the Resources at the disposal of such firms are limited and more importantly, distributed across the workforce in a fair and just manner.
In addition, there is the challenge of transparency as corporates typically have an opaque package from the Middle Level and higher up.
The other aspect of the challenge is that Compensation packages have to meet the expectations of the employees as far as their Self Worth is concerned.
In other words, employees feel satisfied and motivated only when they feel that the pay and perks they are getting are as accurate markers of what they perceive is their due.
Therefore, pay and perks have to be designed keeping this basic human urge of feeling wanted and being paid according to that.
In recent years, another challenge before corporates and especially, start-ups and new ventures is to how use stock options as a carrot for employees.
Stock Options are vested after a few years or when the firm goes public and hence, the appropriate distribution of stock options at different stages of the firm’s lifecycle is a challenge.
This is because some employees often leave after the stock options mature whereas others expect more such rewards for their loyalty. In addition, not all employees can be given stock options multiplying the challenges for the HR professionals.
We mentioned how pay and perks have to reflect what the employees perceive is their due.
On the other hand, the firm has to believe that such rewards are justified and this is where there is Creative Tension between what the firm thinks a particular employee is worth and what that employee thinks he or she is worth.
This is the existential disconnect that often demoralizes employees as well as the managers being angry at them wherein the former thinks that they are poorly paid or inadequately compensated and the latter think that they are being too greedy or not performing enough to justify their expectations.
Last, there are many questions being raised by Worker Unions and Activists about the pay gaps in firms in the manufacturing sectors.
This is another challenge as the alternative can well be worker unrest and lockouts as we have seen in recent months.
This is also an emerging challenge for services firms as gradually, their employees are beginning to unionize themselves.
Moreover, pay disparity has become a burning issue worldwide and this can lead to unwanted consequences such as mass worker disobedience especially when we face a Depressed Economy.
To conclude, designing pay and perks packages needs vision and compassion.
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