Business Ethics BUSI 1314 Lecture 9 - Rewards After this lecture you will: -Have seen markers’ expectations towards the essay (Coursework 2) - have been introduced to a theoretical background for the ethical dimensions of rewards - have participated in philosophically examining an ethical issue, i. e. rewards Wim Vandekerckhove vw 01@gre. ac. uk
Lecture 9 - Rewards 1. 2. 3. 4. 5. 6. 7. Coursework 2 (essay) – structure Equal pay for equal work Performance Related Pay Expectancy theory Rewards in organisation – agent-principal theory Broad Band – what do you think? Cultural issues Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
Coursework 2 – Essay - List of Cases • • Goldman Sachs Look at Mary Gentile’s Op Ed on Market. Watch. com: "The Burden of Knowledge: The ethics of John Paulson and Goldman Sachs" • http: //www. marketwatch. com/story/goldman-sachs-and-john-paulson-the-ethics-2010 -06 -04? reflink=MW_news_stmp (accessed 28 September 2010) • • Grameen Bank Read this comment in The Guardian by Salil Tripathi on micro-credits. • http: //www. guardian. co. uk/business/2006/oct/17/businesscomment. internationalaidanddevelopment (accessed 18 October 2010) • • Arcelor Mittal See a briefing paper from a campaigning organisation on how Arcelor Mittal makes a fortune by selling emissions permits: • http: //sandbag. org. uk/files/sandbag. org. uk/The_Case_of_Arcelor. Mittal. pdf (accessed 28 September 2010) • • HTC, Vodafone, Google supply chain controversy This controversy over union busting in Taiwan is mentioned on many websites, but here is a link to one of them: • http: //goodelectronics. org/news-en/taiwanese-electronics-workers-figth-for-their-rights(accessed 18 October 2010) Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
Coursework 2 - Essay • • Task: You must analyse an ethical issue in an organisation (choose a case from list underneath). Analysis means you : – – • • point out the controversy, explain why the issue is controversial (why is it not straightforward right or wrong? ), identify arguments made, evaluate the arguments made (what kind of argument is it, is it a good argument? ). This means that you will be approaching the issue from more than one position (stakeholder) and you will make use of more than one ethical perspective (in identifying and evaluating the arguments made). End your essay with your personal position on the issue. Of course, you need to give arguments here as well. Referencing is necessary – but academic references are optional. Maximum 2500 words – Deadline 17 December 2010 3 pm Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
Essay structure Which case are you going to analyse? Introduction What is the ethical issue or controversy? Why is it not straightforward right or wrong? Main body Personal opinion Conclusion Group by stakeholder Identify arguments made or by type of argument What theory is it? Evaluate these arguments Are the facts it relies on clear and reliable? What do YOU think about this issue? Summary of analysis Can you link it to a theory? Any facts to back it? Any stakeholder who’s side you choose? What was the issue? Which theories were used? References Harvard style Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
€ 13 m / year Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
2. Equal Pay for Equal Work In 2005 in the US, the average CEO earned 262 times the pay of the average worker. In 1965, that was 24. http: //www. epi. org/economic_snaps hots/entry/webfeatures_snapshots_ 20060621/ In 2003 in the UK, women earned 78% of what men earned (reflects gross average earnings) http: //www. infoplease. com/ipa/ A 0908883. html In the US in 2006, black men earned 72. 1% and hispanic men earned 57. 5% of what white men earned, http: //www. infoplease. com/ipa/ A 0882775. html Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
2. Equal Pay for Equal Work Treaty of Rome (1957) – Article 119 ‘equal pay for equal work’ Between men and women Equal Pay Directive (1975) (N. 75/117) – Article 1 ‘equal pay for work of equal value’ UK Equal Pay Act – (Amended Regulations 1983 SI 1983/1794) ‘equal value’? -Effort, - Skills, - Decision Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
3. Performance Related Pay for results • Individual variable pay • Group variable pay • Gain-sharing • Lump sum awards Not for attendance – ‘presenteism’ On the rise for white collar workers On the decline for Manual workers Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
Payment by result on the decline for manual workers Why? Machines determine pace You can only use PRP for what is under someone’s control Expectancy Theory Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
4. Expectancy Theory (Vroom) Control Procedural Justice Expectancy: Can I do this? Instrumentality: Will it get me the outcome? Effort Distributive Justice Performance Equity: Was it worth the effort? Valence: Do I want the outcome? Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011 Outcome
5. Rewards in organisations Agent-Principal Theory Issues: - Control the agent - Principal lacks knowledge about how to get results - Agent acts in agent’s behalf, not in principal’s Principal Agent Solution: Provide agent with incentives so that agent’s goals are aligned with principal’s Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011 Result
Position 6. Broad Band Is this fair? Would it work? Would you like this? Pay Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
7. Cultural Issues and PRP Hofstede Trompenaars Power Distance Individualism / Collectivism Ascription / Achievement Locus of control Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
Take away Regulations Market reality Reward For effort (action under control) Is it perceived as fair? (for effort + compared to others) Agent-Principal (goals in line) Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
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