Importance of Ethics in Human Resource Management

By Colin Gordon | 24.12.2021

Business or workplace ethics is a crucial element that should be attended to by the human resource manager. You want to appropriately study your business policies and practices that contribute to employee relations, engagement, and overall business performance. In addition, you should be able to identify and handle any ethical pitfalls that may affect your business brand or reputation. This article takes you through the importance of ethics in Human Resource Management whether you run a small business or a large enterprise.

What is Ethics in HRM

Ethics in HRM is whereby human resource professionals or business managers help an organization embed and uphold its set values regardless of levels. This is so that they can be able to build, sustain, and improve employee trust and relations. For instance, encouraging accountability is one of the elements that will prevent arising of workplace issues in the first place.

Ethical Issues in Human Resource Management

As mentioned earlier, embracing ethics in HR is crucial for successful business operations. However, remember that ethical issues are challenging to handle, and the best way to avoid them is to understand what they are and what to do to prevent their occurrence. Below are some of the ethical issues to note. 

1. Unfair employee benefits and compensation plans

2. Discriminatory practices based on gender, race, disability, age, etc.

3. Biased recruitment practices whereby a human resource manager favors recommended individuals or those with personal relations.

4. Interfering with employees’ personal lives that they do not intend to disclose. This can include religious beliefs, political preferences, etc.

Role of Ethics in Human Resource Management

It is important that you understand the role of ethics in human resources to effectively run a business. Besides encouraging employee collaboration and accountability, here are the essential functions of ethics in human resource management. 

1. Abide by Employment Law

HR ethics helps you conduct business in line with the employment law due to fair employment practices. For instance, policies related to minimum wage and employee overtime pay show that your company compensates employees in accordance with the law. In addition, policies against discrimination attract applicants from diverse groups, thus indicating that you engage in fair employment practices.

2. Protecting Your Employer Brand/Reputation

Conducting business unethically can ruin your reputation since word will spread everywhere about your misdeeds. These can include sexual harassment, discrimination, unfair employment policies, etc. As a result, not only will you be able to lose important clients, but attracting quality talent for various positions will be a challenge. That being said, build your reputation with the best HR ethics activities and keep your business ahead of the competition.

3. Promotes Employee Retention

HR ethics and compliance in the organization promote trust among the employees. As a result, your workers will be loyal and strive to impress you by putting more effort into work. In addition, they will work in your organization for more extended periods, thus gaining more experience that contributes to increased production. More importantly, hiring and recruiting costs will be reduced.

4. Better Decision Making

Business ethics in human resource management encourages collaboration and accountability. As a result, employees will be able to be accountable for their actions, allowing you to easily make the best organizational decisions. What’s more, workplace conflicts that tend to occur more frequently will also reduce since no employee will want to be in the spotlight as a troublemaker at all times.

Ethics in Human Resource Management Examples

The role of HR in promoting ethics is to encourage the best code of ethics and lead by example for smooth business operations. Note that there are different types of ethics in HRM, and below, we have shared some of the significant ones to help you effectively manage your business.

  • Guide, encourage, and mentor your employees to be on their best workplace behavior. 
  • Be respectful and always talk to them privately whenever they conduct themselves unethically. 
  • Keep communication as honest and transparent as possible to gain your workers’ trust.
  • Encourage social responsibility.
  • Do not take advantage of your position for any gain whatsoever, whether financial, personal, or material. Simply put, avoid being biased. 


A Code of ethics can help you improve your business performance and attract quality talent. For this reason, you should include HR ethics activities in your daily business operations. The best element about ethics in HRM is that you have a lot to gain rather than lose. These include good reputation, employee loyalty, and most importantly, you get to save money that could have been used in multiple recruitments. That being said, take advantage of the different types of ethics in HRM and see the difference.


Related Articles