How to Leverage Business Ethics in Human Resources

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Business ethics is important in human resources in general, but specifically for PHR and SPHR certification, HRCI will be requiring business ethics as part of its recertification in 2021. 


HRCI Adds Business Ethics Credit As Part of HR Recertification Requirements 


From HRCI: Effective January 1, 2021, all certificants are required to fulfill one ethics credit during their three-year recertification cycle. This one ethics credit is included in the required 45/60 recertification credits requirement. Ethics is part of the core HR practices when managing daily employee interactions and organizational goals. This requirement ensures our certificants remain aware of crucial ethical practices and behaviors in the workplace.

In the simplest terms, business ethics is the study of appropriate business policies and practices regarding potentially controversial subjects including corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities.

Business ethics is the method by which we apply a moral framework to the way organizations do business, and it shapes and changes the way businesses operate. It ranges from normative – or how employee behavior is related to cultural or social issues, to descriptive – or how we incorporate best practices into our organization’s policies and procedures.

There are several ethical principles that are important for businesses to implement because failing to do so may hurt a company’s bottom line. These principles include a commitment to managing financial or other customer data in a responsible way, to avoid fraud and misrepresentation in your operations, to treat employees and customers with respect and dignity, and to give back to the community in which you are located. 


Business Ethics in Human Resources


As the department that deals directly with people employed by a company, HR holds a large part of the responsibility for upholding business policies and practices in an ethical manner. SHRM’s code of ethics for professional responsibility in HR states that “as HR professionals, we are responsible for adding value to the organizations we serve and contributing to the ethical success of those organizations. We accept professional responsibility for our individual decisions and actions. We are also advocates for the profession by engaging in activities that enhance its credibility and value.”

Ethics in HR means helping an organization embed and uphold its values at all levels in order to maintain and increase trust. Accountability, or taking responsibility, plays a key part. Ethical policies and procedures for the company are not just in place to ensure that employees and company leaders do the right thing, they are present to protect the company from liability. HR is the department that develops, distributes, and enforces these policies and procedures.


Ethics Challenges for Human Resources 


One of the biggest areas for human resource practitioners that is impacted by business ethics is in hiring. For example, if an employee is found to have falsified information on a job application after they have already been hired, HR must have policies in place that address this specific situation or face potential wrongful termination lawsuits. It is also imperative that issues of equal opportunity, anti-discrimination policies, and legal compliance with regards to hiring practices are addressed in company policies at the earliest stage in recruiting in order to achieve legal compliance as well as ethically sound decision making.

Another issue that HR has to address with some frequency is the ethics relating to employee privacy. For example, companies routinely perform background checks on job applicants before extending an offer of employment. From the employer’s perspective, these are necessary to reduce liability by verifying that the information the applicant provided is true. However, employers must stay within reasonable guidelines when it comes to the information obtained. Any inquiries must be related to the job the applicant is applying for and the potential employee must be told what information will be checked and then give written consent.

HR is also responsible for legal compliance with regard to record-keeping. For example, the Americans With Disabilities Act specifies that employers must keep employee disability records separate from personnel files and in a secured location. Other laws, such as the Health Insurance Portability and Accountability Act and the Genetic Information Nondiscrimination Act, also have their own confidentiality requirements on medical records. HR professionals must be aware of how federal and state laws impact the collection or storing of employee information.

Are you looking for digital HR Recertification courses and resources? Look no further than Workology’s UpSkill HR membership

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Jessica Miller-Merrell

Learn more about Jessica Miller-Merrell, SPHR, SHRM-SCP, the founder of Workology, a workplace HR resource, and the host of the Workology Podcast. More of her blogs can be found here.

Reader Interactions


  1. Soni says

    This probably the best, and the most fantastic post i have ever seen, can’t wait to dig deep inside your other blogs.


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