A case Regarding the fundamental Issue of Human Resource Management-To what extent do ethics play a decisive role in it and whether companies should let ethics guide them in matters of crucial nature. Such questions would be examined and answered by the following paper.
This case revolves around a fundamental problem that concerns all companies, irrespective of the size or nature of the organization. The issue is that of Human Resource Management. The workforce plays an integral role in the success or failure of any organization, and hence, appropriate management policies need to be created in order to counter any issue arising from the failure or mismanagement on behalf of the management team.
Motivational theories have been designed in order to make sure that the various needs and requirements of the workers are fulfilled.
These motivational schemes include monetary gains and non-monetary gains. Monetary gains can include compensation schemes, bonuses, and appropriate payment systems, while non-monetary systems include training, the work environment, skills-building activities, management and workers’ communication links, verbal praise etc.
Both of these can result in a much improved and efficient workforce system-a requirement for any company in the competitive world of today.
The issue that is troubling the management of the organization in the case, African Gold is that of the costs, medical costs and disability programs as a result of the rising workforce succumbing to the HIV/Aids disease. The company head had realized that the repercussions of these could be quite severe. The aftermath included absenteeism, productivity losses, recruitment, and training.
These costs were being incurred at a time when the company was already experiencing a recessive pattern in its sales revenue.
The ethical concern regarding, in this case, was the fact that whether the company should continue providing for these people or whether it should abolish the workers’ rights to medical bills payment etc.
If one was to analyze the root cause of this issue, it could be traced to a number of things. HIV/AIDS is a prevalent and rising concern in the African region.
As a result of the flesh market, the interaction of HIV infected people with non-HIV infected people have resulted in the HIV epidemic. In the mining industry especially, this concern is greater due to the working environment, which brings people in greater proximity.
Besides the HIV related cases, other cases are a product of the mining industry alone. The number of people suffering from mining accidents and mining-related diseases has also risen substantially.
Their medical costs are quite substantial; huge concerns for a small company like African Gold which cannot afford to spend so much on medical expenditure.
Africa has had a history of epidemic diseases, and HIV is the latest to have hit this region. As a result of extreme poverty, the number of women engaging in these activities has risen by a great deal, and their services are offered to the people associated with multinationals.
Hence, the mining workers who are already suffering from mining-related diseases have greater chances of passing these diseases to each other as a result of the working conditions.
These people have been present for quite some time, but the rate at which it is spreading is a concern for all the companies working in Africa since it results in massive labour losses and huge medical expenditure.
On average, about twenty funerals were taking place in place of workers who had succumbed to HIV/AIDS, and the average costs for each funeral came up to 10,000 African rands.
The issue of funding or not funding the medical expense rose when the funds normally provided for such activity were depleted as a result of a large number of workers falling sick. In the face of falling sales and decreasing cash flow, the company was faced with a serious dilemma of cutting back its medical expenses in order to make sure that the company’s performance did remain consistent.
As part of an education program, the company carried out a survey in order to implement the changes in their reviewed policies. The survey showed that the medical expense had skyrocketed as a result of the rising disease toll. As the African currency appreciated, the price of gold fell by a great deal affecting the profits of African Gold extensively.
Hence, in these times, the medical expenditure rising was a huge concern for a mining company, especially whose workers are even more susceptible to diseases.
The loss of productivity due to absenteeism, recruitment costs and training in itself were quite cumbersome for a company that was still in the process of establishing itself as a formidable opponent in the eyes of its opponents.
The statistics further added proof to the above arguments as the number of HIV/AIDS affected cases went up from 4.6 per cent to 8.7 per cent in a span of a few years. Almost on average, 1.700 cases were reported for HIV infection, highlighting the traumatic state of this region. Thus, the company’s decision to stop all payment of transport, coffin and funeral costs for such workers who die as a result of the mining work came into practice.
A number of possible solutions can be offered in this case in order to solve this crisis which is getting worse with time. The organization is a mining company, and for such an organization, massive layoffs can have disastrous results on the company’s output and on the morale of the remaining workers who can remain doubtful about their permanency.
One of the possible solutions can be that the company compensates only such workers who are not suffering from such diseases, which cannot be cured and not in such cases in which the expenditure amounts beyond a certain amount. By doing so, the company would be able to reduce its medical bills by a great deal and, at the same time, will make the employees feel that they are being cared for.
The above policy offers a way to placate the present workers and to make sure that there is no time left for complaints.
The second possible policy that can be offered can be that the company can carry out tests every week in order to test for HIV infected workers so that these workers can be separated from the non-infected ones. This would be done after proper screening tests, and that would allow the company to differentiate between the workers. For example, if one of the workers has been tested positive, then that worker would be laid off so that he does not infect the others.
Those cases which can be treated could be taken care of, but such patients whose limit of expenditure is too great and those cases that are quite serious- could be as company policy- be declared not the responsibility of the company. Those cases in which the medical expenditure is beyond, for example, 15000-20000 or greater rands would not be funded by the company and by having this limitation, the company would be able to limit its own medical expense.
A third possible alternative problem-solving situation that could be created could be that the company lay off all workers who have been infected with HIV in some way or another and then, after proper tests, hire new uninfected workers who would be tested weekly in order to remove the chances of this disease spread. If, for example, thirty workers have been found t be suffering from HV, all thirty workers would be laid off in order to remove any possible chance of the disease spreading.
Three possible solutions have been offered above as a solution to the problem instead of completely ending the funding of the workers’ medical bills as that could result in demotivation and, in some cases, worker protests.
In order to avoid that scenario, the best possible solution would be the first one as it would the company a method to develop its human resource policy, and the employees would release that as a result of certain rules and regulations; a proper procedure would be followed. Certain rules and regulations would pertain to the kind of medical expenses that the company would be financing and which sort would not be financed by it. The expenditure would also be determined by the sort of disease and stage of the disease that the patient would be suffering from.
The rules and regulations would also pertain to the level of absenteeism etc., that could take place in order to create a certain order and discipline regarding the rules and regulations. The rules and regulations would be implemented after having various meetings in which the reason and rationale for these would be discussed with regard to the recessionary pattern of sales revenue, high level of diseased workers etc. After having made sure that the workers had understood, these rules and regulations would be sent as memos to all the supervisors who would inform the workers of their implementation.
As a result of this policy, such patients would get access to funding who would be able to make more effective use of it hence allowing the company to create a good name for itself amongst the workers. And by having proper communication in which the workers would be told why funding could not be carried out in all cases, the company would be able to avoid any protests or strikes.
Proper communication would entail having various meetings and discussions in which the management would take the workers into confidence and assure of the reasons go for this new policy implementation. The workers would not be made to feel like they have been abandoned by the management but, in fact, are still being taken care of. It would be the management’s responsibility to ensure that the works remain secure and motivated enough so that the worker productivity does not suffer in any way.
Works Cited
African Gold Incorporated-Ethics and AIDS in the Workplace-Case 101