AN ETHICAL DILEMMA (week 7)
When Jim began working in the human resources department at KR Electronics, he was
impressed with the number of advancement opportunities the job offered. His first task was to
monitor reports that came in from employees through the company’s ethics hotline. It was a
simple job but one Jim felt would lead him to a higher position in the HR department. He spent
two days learning about the company’s ethical policies and values, such as the importance of
integrity and confidentiality. Jim felt reassured he chose a great company in which to start a
career.
KR Electronics was a competitive company, and every six years employees were
evaluated for performance. While the highest performers received substantial bonuses, the lowest
15 percent were consistently fired. This didn’t bother Jim too much. He knew many other well-
known companies had a similar system in place.
What bothered Jim was the way the supervisors treated employees who did not perform
highly. Several employees approached Jim and told him of an abusive manager who often yelled
at employees in front of other co-workers. Jim heard reports that the supervisor would make
comments such as “I can’t wait till the year is up and I can tell you to get lost. It’ll be nice to
actually get someone in this job with half a brain.
When Jim approached David, the human resources manager of his department, about
what he heard, David shrugged off Jim’s concerns. “You’ve got to understand, Jim,” David
explained. “We operate in a highly competitive field. Employees have to work quickly and
efficiently in order to maintain our business. This often requires supervisors to get tough.
Besides, this supervisor’s unit is one of our highest performers. Apparently, whatever he’s doing
is working.” This remark made Jim feel uncomfortable, but he did not want to argue with his
boss about it.
One day Jim got a call from a woman in the company’s sales department. She informed
him that many of the firm’s salespeople made exaggerated claims about the quality of their
electronics. He also learned salespeople were making guarantees about products that were not
true, such as how long the product would last.
“The salespeople are given substantial bonuses for exceeding their quotas, so many
promise whatever it takes to increase their sales,” the woman explained. Although it was not
required to provide a name when reporting, the person talking to Jim gave her name as Sarah
Jones. She asked Jim to make sure her sales manager Rick Martin did not find out she called the
hotline. Jim gave the report to his supervisor for further investigation.
Two weeks later Jim heard that Sarah Jones had been fired for poor performance. He
approached David to ask him about the situation and was horrified to find out the sales manager
of Sarah’s division had been told about her report.
“But David, this is a violation of our confidentiality code! I promised Sarah we would
keep her name anonymous when investigating this matter. What if Rick fired her out of
retaliation?” Jim asked. David looked at Jim in exasperation. “Jim, you are making too big of a
deal out of this. Nobody forced Sarah to give her name to us over the hotline. And trust me,
Rick’s a good man. He wouldn’t fire someone simply to get back at them for reporting. It seems
to me that these reports didn’t have credibility, anyway. It’s likely that Sarah made up these
allegations to hide her poor performance.” Jim left David’s office upset. Even if Sarah was a
poor performer, he did not feel that it was right that her sales manager was told about her report
when she expressly requested otherwise. As he went back to his desk, he remembered hearing
that the sales manager and David were good friends and often went out together for lunch.
QUESTIONS | EXERCISES
1. How does the company’s organizational culture appear to conflict with its ethical policies?
2. What are the options for Sarah if this was retaliation?
3. What should Jim do next?
