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Decent Work: The Moral Status of Labor in Human Resource ManagementMiguel Alzola1Received: 1 December 2015 / Accepted: 10 March 2017 / Published online: 24 June 2017? Springer Science+Business Media Dordrecht 2017Abstract In this paper, I aim to critically examine a set ofassumptions that pervades human resource managementand HR practices. I shall argue that they experience aremarkable ethics deficit, explain why this is so, andexplore how the UN Global Compact labor principles mayhelp taking ethics seriously in HRM. This paper contributesto the understanding and critical examination of theundisclosed beliefs underlying theory and practice inhuman resource management and to the examination ofhow the UN Global Compacts ideal of decent workmay offer some promising avenues for the development ofethics in HRM.Keywords Human resource management ? Ethics of labor ? UN Global Compact ? Decent work ? Property rights[H]itherto there has been no alternative for those wholived by their labour, but that of labouring either eachfor himself alone, or for a master. But the civilizingand improving influences of association, and theefficiency and economy of production on a largescale, may be obtained without dividing the produc-ers into two parties with hostile interests and feelings,the many who do the work being mere servants underthe command of the one who supplies the funds, andhaving no interest of their own in the enterpriseexcept to earn their wages with as little labour aspossible. (John Stuart Mill, Principles of PoliticalEconomy, Book IV, Chapter VII)The central tenet of this article is that human resourcesmanagement research and practices experience a remark-able ethics deficit, which can be explained by someoftenundisclosedthreshold assumptions and ideals about thenature of the field and the economic and political institu-tions in which it is embedded. The invitation of this paperis to consider whether the United Nations Global Compactcan help remedy such a shortfall.1The UNGC labor standardswhich are derived fromthe International Labor Organizations Declaration onFundamental Principles and Rights at Workare based onthe principle that all employees around the world shouldhave decent working conditions (decent work is also theSustainable Development Goal number eight). Accordingto these international agreements, decent work entails fourfundamental principles, namely freedom of association andthe right to collective bargaining, the elimination of forcedlabor, the abolition of child labor, and the elimination ofdiscrimination in respect of employment and occupation.Despite the fact that the ILO adopted these labor standardsback in 1998, it is apparent that its principles have not beenaccomplished yet.2& Miguel Alzola email@example.com Gabelli School of Business, Fordham University, 140 West62nd St., Suite 305, New York, NY 10023, USA1 The United Nations Global Compact (UNGC hereafter) is aprinciple-based framework used to conduct business while meetingfundamental responsibilities in the domain of human rights, labor,environment, and anti-corruption. 2 A recent UNGCs Good Practice Note (2014) warns companies thatin order to meet their corporate responsibility to promote and realizedecent work they should decide how to organize the human rightsfunction internally to effectively drive the process of embeddingrespect for human (including labor) rights. https://www.unglobalcompact.org/library/921.123J Bus Ethics (2018) 147:835853https://doi.org/10.1007/s10551-017-3507-5In this paper, I will explain the limited realization ofsuch aspirations by reference to a set of assumptionsunderlying our theories and practices of human resourcemanagement, which are relevant to its moral dimensionand may prevent the achievement of decent work. Thepaper is not concerned with the moral evaluation of HRpractices in themselves but rather with the understanding ofsuch practices as deserving moral evaluation. It is not aninvestigation about the implementation and evaluation ofthe UN Global Compact either. My goal is to provide anexplanation and a critical examination of the ethics deficitin the HR field. Furthermore, I will consider the questionwhether the UN Global Compact can help alleviate such adeficit.3 And I will conclude with a call to take ethicsseriously in both the academic and the practitioner per-spectives of HRM.The paper is organized as follows. In section one, Idiagnose the state of the art and show why there is an ethicsdeficit in HRM. In section two, I sketch an explanation ofsuch a deficit by reference to the assumptions and ideals inwhich HRM practices and research are embedded. In sec-tion three, I suggest why we have good reasons to put suchassumptions into question. In section four, I explore theways in which the UN Global Compacts value of decentwork helps disputing the aforementioned assumptions andprovides some promising avenues for the development ofethics in HRM. Section five concludes.Diagnosis: An Ethics DeficitAt a first glance, one would argue that most decisions inHRM constitute significant moral issues (McGregor 1960).Encompassing everything from quality of work life toworkforce diversity, from job analysis and human resourceplanning to recruitment and screening, from training toperformance appraisal, from pay systems and benefit plansto profit sharing and employee stock ownership, fromunion representation to employee voice systems, and fromhealth and safety to workplace privacy. HRM is a field richin ethical dilemmas. One may be tempted to claim thatdecision-making in HRM is inherently morally relevant.Yet, it is barely framed as a moral issue, both in the aca-demic literature and in HR practices.Recent surveys by the Society of Human ResourceManagement indicate that almost 70% of 395 randomlyselected HR professionals responded that their organizationdoes not offer ethical training.4 Only 43% of humanresources professionals said their organizations includeethical conduct as part of employees performanceappraisals. Only 23% of HR professionals say that theirorganizations have a comprehensive ethics and complianceprogram in place.5Presumably, HR professionals are sensitive to moralissues in their workplace. Some have reportedly quit theirjobs due to management misleading or lying to employees,customers, vendors, shareholders, or the public. Further-more, half (51%) of the organizations included in a studyof workplace bullying conducted in 2012 reported thatthere had been incidents of bullying in their workplace,which lead to decreased morale (68%), increased stressand/or depression levels (48%) and decreased trust amongco-workers (45%). Such findings roughly reflect how HRpractices raise significant ethical dilemmas.However, the role of ethics in HRM theory and practiceis barely examined in the literature to date (Winstanley andWoodall 2000; Lengnick-Hall et al. 2009; Greenwood2013; Jackson et al. 2014). The moral dimension of HRMis typically evaded within academia and overlooked inHRM systems and practices (Wright and McMahan 1992;Legge 1995; Van Buren et al. 2011). This tendency isreflected in the most influential papers in the HRM field(Taylor et al. 1996; Matusik and Hill 1998; Lengnick-Halland Lengnick-Hall 1988; Baird and Meshoulam 1988;Rogers and Wright 1998; Cascio 2005; Geare et al. 2006)and finds expression in the HR function (Handy 2002;Kochan 2007; Jack et al. 2012) and consulting activities(Thomas and Ely 1996; Pfeffer 1998; Liu et al. 2007)which are not typically framed as ethical issues.I shall offer a handful of examples to illustrate what Imean by an ethics deficit with the caveat that the list isnot exhaustive.The first is, of course, the very name of the functionalarea and the corresponding title of the academic field:human resources. Workers are named resources,which entails that they are treated like commodities, assuggested by John Stuart Mill in the opening passage. Suchtreatment is often regarded as demeaning because, if takenseriously, it disrespects workers personhood. They areconsidered to be like any other production factor, regard-less of the fact that they are (also) human beings. Indeed,since labor is allegedly subordinated to capital, it is noteven regarded as the most important production factor (DeGeus 2002).3 The intended contribution of this paper lies at the level of the ideas and ideals underlying HRM rather than at the level of theimplementation of the UNGC labor principles, which has beenthoroughly reviewed in recent special issues of Business EthicsQuarterly (Vol. 21, No. 1), Business and Society (Vol. 52, No. 1), andJournal of Business Ethics (Vol. 122, No. 2), among others. I amgrateful to an anonymous reviewer for pressing this clarification.4 http://www.shrm.org/Research/SurveyFindings/Pages/CorporateEthicsSocialResponsibility.aspx. 5 http://www.shrm.org/Research/SurveyFindings/Articles/Pages/EthicslandscapeinAmerica.aspx.836 M. Alzola123Even the views that are more sensitive to the workersconceptualize them as our most important asset, ashuman capital, or as intellectual capital. These tagsare revealing. Being a valuable thing is still better thanbeing useless or replaceable, but it still fails to acknowl-edge peoples humanity. The problem is worsened byprevalent accounting techniques, which do not even recordthe employees as assets but merely as costs (Lepak andSnell 1999; Fulmer and Ployhart 2014; Russ 2014).Second, the transition from HRM to strategic HRM(SHRM) has been, among other things, a process offocusing on corporate performance and financial metrics,thereby emphasizing the instrumental view of workers asmere means to strategic ends (Buckley et al. 2001; Leng-nick-Hall et al. 2009). HR professionals have marginalizedemployee-focused responsibilities and ethics activities(Van Buren et al. 2011). As a result, trade-offs betweenorganizational goals and workers welfare are not onlyconceivable but also permissible or even required (Wren1995; Kaye 1999; Harley and Hardy 2004; Liu et al. 2007).Third, the moral dimension of HRM research isneglected because a commitment to decent work entails,among other things, a commitment to non-scientific val-ues. HRM as an academic field is self-presented as ascientific approach, which is supposed to be morally neu-tral or value-free (Bird and Waters 1989; Carroll 1991;Schuler and Jackson 2005), and based on scientific evi-dence rather than moral judgment (Lengnick-Hall andLengnick-Hall 1988; Batt 2002; Anker et al. 2003; Rous-seau 2006; Pfeffer 1998). Thus, there is no room for a non-scientific value such as decency.In sum, our intuitions tell us that decision-making on theHRM function is morally significant but still neglected.The fact that there is an ethics deficit in HRM is not a newfinding (Linehan and OBrien 2016). But it remains anunder researched topic in academia as well as only a sec-ondary concern in HR systems and practices.An Explanation: Five Guiding IdealsIt follows from the above premise that there is a moraldeficit. The fact that is not perceived as a problem isexplained, I submit, by certain assumptions, which I take tobe the foundational beliefs of the field and the (oftenundisclosed) normative ideals of HRM practices,6 namely: The autonomy of ethics and business. The priority of property rights. The virtues of competitive markets. The organization of the firm. The principle of national sovereignty.These assumptions and ideals are particularly robust inthe Anglo-Saxon version of capitalism, invigorated byneoclassical economics (e.g., Friedman 1962, 1970; Famaand Jensen 1983) and libertarian theory (e.g., Nozick 1974;Gaus 2011)I will argue that these five assumptions comprise theprevailing understanding of the firm, its environment, and,indirectly, the HR function. These ideals drive and orga-nize our thinking about HRM. Next, I will argue that suchassumptions have become self-fulfilled (Frey 1998; Ferraroet al. 2005).The Autonomy ThesisTraditionally, philosophers and social scientists agree thereis a somewhat strong distinction between the normativeand the descriptive domains of academic research. Thedistinction has been articulated in several ways (Hume1739; Moore 1903). For simplicitys sake, we can sum-marize it by saying that business decision-making is basi-cally amoral and that the domain of morality does notoverlap with the business world (Freeman 1994; Sandberg2008).According to this rationale, business decisions lackmoral content and ethical decisions do not appear in thecontext of business, where facts have priority. One mightsee this as an empirical thesis, which describes how busi-ness executives think and behave as a matter of fact (or howscholars think about such decisions). Alternatively, onemight conceive of this thesis as a normative claim abouthow business executives ought to think and behave (or howscholars ought to think about them) (see Alzola 2010).What is implicit in the autonomy thesis is that eachdomain is concerned with a different research question(Sidgwick 1988). While HR practices and HRM researchare concerned with the question of what is the case, ethicsis about what ought to be the case. While HRM practi-tioners and scholars are concerned with facts, ethicists areinterested in values, that is, with the moral evaluation ofsuch facts. While ethical decision-making is a matter ofwhat is believed to be ethical in HRM practices andscholarship, to call something ethical in ethics entails amoral predicate (Hasnas 1998).Hence, it is not surprising that their methodologies,assumptions about human nature, and goals are radicallydifferent on both sides of the divide (Werhane 1994).First, HR scholars aim to empirically test hypotheses asa way to check the plausibility of their theories in6 A careful reading of the most influential publications in HRMsuggests these five principles. But, typically, these undisclosedassumptions are not explicitly discussed or argued for. Rather, theyare taken for granted as the starting point of HRM theories. They maybe considered to be so obvious that they do not need to be defended.Decent Work: The Moral Status of Labor in Human Resource Management 837123predictions or explanations of behavior (Harley and Hardy2004). Ethicists, on the other hand, are concerned withtesting how consistent a theory is with our consideredmoral beliefs. When our intuitions and beliefs are notaligned with a moral theorys prescriptions, we have toadjust one, the other, or both (Rawls 1971).Second, social scientists assume that human beings are(at least to some extent) externally determined, a claim thatmost ethicists would rightly reject insofar as it is incon-sistent with our nature as noumenal selves, as autonomoushuman beings who are responsible for what we do (Kant1785).Finally, while HR practitioners and scholars focus onhow to transition from theory to practice and how to suc-cessfully apply their findings in real organizations (Co-lakoglu et al. 2006), ethicists are rather interested in criticalreflection and deliberation about what ought to be the case,above and beyond how the real world works (Kagan 1998).Property RightsBoth HR practices and academic scholarship take the idealof a private property-based economy as a central pillar. Wecan certainly think about HR research and practices onalternative economic systemssuch as HRM in socialisteconomiesand certain regulations to the use of propertymay still be consistent with mainstream scholarship onHRM, but the backdrop assumption when we talk aboutHRM is the widest possible level of private property.The expression maximum property rights entails thestrongest protection of property along two dimensions,namely, the extension and range of property (Gaus 2010).The first dimension is concerned with what the ownercan do with the thing he or she owns (Honore? 1961).Maximum property rights comprise the right to use thething, exclude others from using it, and the right to transferthe thing (selling or renting it). It also entails the right tomanaging and modifying the thing, enjoying its benefits,being compensated when it is damaged by others, as wellas the right to destroy, spoil, or waste the thing. And itincludes the right not to be expropriated without a justcause and fair compensation, which raises the issue oflegitimate taxation (Epstein 1985).The second dimension is concerned with the question ofwhat can be owned, that is, what things can be privatelypossessed. In the ideal system that informs HR practicesand research, both consumer goods and the means of pro-duction can be privately owned. A more radical positionholds that natural resources can also be privatized. Indeed,given the inconsistent rationality of our conduct at theindividual and the collective levelknown as the tragedyof the commons (Hardin 1968)state ownership of naturalresources is seen as the cause of the environmental crisisand, hence, according to this extreme view, should beabolished (Schmidtz 1991). The privatization of naturalresources is proposed as the best solution to environmentalpollution and degradation because the price system issupposed to induce an efficient search of alternative tech-nologies and to favor the best use of scarce goods.The right to property is, under this rationale, a naturalright that the law should protect in order to secure a sphereof freedom for each individual so he or she can pursue hisor her interests without arbitrary interferences (Hayek1945). Possessing property is then one of the fundamentalmeans to protect the individual against coercion. And that,the argument goes, applies equally to the employer and theemployee (who has ownership over his or her labor).The Virtues of Competitive MarketsRelated to the extension and range of private property, isthe question about the relative role of government in theeconomic system. Full protection of property rights pre-sumably leads to a ban on government intervention in theeconomy. The fundamental economic problem is thecoordination of who produces what for whom. In answer-ing this question, one may appeal to a centralized planningsystem. Alternatively, one may trust in decentralized,market systems to make the most important decisions aboutproduction and distribution in society (Hayek 1945).HR practices and scholarship are based on the assump-tion (the ideal) of the price system making those importantdecisions instead of governments (Butler et al. 1991).Labor markets, according to the assumption, can and willdeliver appropriateone might say fairoutcomes, rep-resenting the level of decency that is regarded as appro-priate by market participants.As described by the Coases theorem, regardless of theinitial allocation of property rights, when there are notransaction costs or income effects, bargaining will lead toan efficient outcome in the presence of externalities eitherthrough payments due to liability or through bargaining(Coase 1960). If Coase is correct, then the main justifica-tion for government interventionnamely, that it is nec-essary to regulate market failures arising from externalitiessuch as when one party imposes costs on another party whois not considered in his or her calculationscollapsesbecause, according to Coases theorem, market transac-tions can solve the problem of externalities and lead toefficient outcomes.Then, one standard way to reconcile the standpoint ofthe firm (and its executives) with the standpoint of thecommunity is through the design of market institutions,which entrust us to care for our own welfare instead ofadopting the standpoints of those affected by our decisions(Maitland 1997). This is where the metaphor of the division838 M. Alzola123of moral labor or ethical specialization enters. It has beenwidely used in professional ethics (Luban 1994; Jacobs2005) and political philosophy (Nagel 1979; Rawls 1982).The idea is that through institutional design we can producea differentiation of the self between public and private roleswhich externalizes the impartial requirements of moralitythrough such institutions, thereby reconciling the demandsof society and those of personal or individual morality(Nagel 1995; Scanlon 1998; Scheffler and Munoz-Darde?2005).In the context of free markets, there is an institutionaldivision of moral labor: a system of checks and balances ispart of the market systema sort of invisible handwhichmakes self-interested behavior permissible. Indeed,according to the division-of-labor metaphor, it is not onlypermissible but also required to care exclusively aboutones own interests, because ones partial activities are partof an impartial scheme that benefits everyone (Heath2006).Assuming a principle of social division of responsibility,competition is good because it creates social benefits. Andthe virtues of competition are associated with the structureof the social institutioni.e., the market, labor markets inour caserather than, paraphrasing Adam Smith, with thegood intentions or the benevolence of the employer (or theworkers, for that matter). Hence, market players do notneed to intend creating social benefits for us. It is enoughfor them to act as self-interested rational agents who careonly for themselves because the price system will lead togreater social efficiency. An invisible hand will guidethem. Thus, competitive behavior is not only permitted butalso required. And moral constraints are not only pointlessbut actually harmful (Gauthier 1982).The Theory of the FirmThe next ideal, which follows from the previous twoassumptions, is concerned with the questions of whybusiness firms emerge at all, where transactions are per-formed (internally or in the market), and how economicactivities are organized within firms.Three features distinguish the typical capitalist firmthe structure that informs the theory of the firm guidingboth HR practices and research; they are for-profit, hier-archical, and shareholder-oriented organizations. This isnot just a stipulation. This conception of the firmthestandard Anglo-Saxon modelis said to summarize thebest management practices as well as the best normativeview of corporate structure and governance. According toHansmann and Kraakman (2001), there is worldwide legalconvergence on this model. And we should expect thisconvergence to also produce substantial convergence in thepractices of corporate governance and corporate law in thenear future.We are concerned here with the questions of what acorporation is, its purpose, in whose interests it should begoverned, and who should control the corporation. If wesee the firm as a group of individuals who pool their moneyfor the sake of achieving some goals that they cannotachieve or finance alone, it follows that the interests of theshareholders have priority over the interests of the othercorporate constituencies.Therefore, the primacy of shareholders is justified, inthe standard model, on grounds of property rights. Ifthe firm is just a piece of property of equity capital pro-viders, it follows that their interests have priority as anextension of the right to property that any person has(Jensen and Meckling 1976). Ownership entails the rightto the thing and its proceeds (see Property Rightssection above).Hierarchy and control can also be justified as a matter ofproperty rights. Or, they can be justified on grounds ofefficiency: the firm is a hierarchical organization, theargument goes, because hierarchy reduces transactioncosts, thereby maximizing profits (Jensen 2010). Neoclas-sical economists show how production is organized inhierarchical firms instead of markets and price mechanismswhen the transaction costs of conducting productionthrough market exchangesin the absence of perfectinformation, such as negotiating and information costsare greater than within the firm (Coase 1937).There is, according to this fundamental assumption inHR practices and research, a widespread consensus that afirm is a profit-driven organization, in which shareholdershold ultimate decision-making power and, as owners of thefirm, have a right to its profits (Huselid 1995; Legge 2005).