Ethics and Employees

Surveys and Trends

On this page

• St. James Ethics Centre - Australia - Business Attitues Towards Ethics
• Racial Divide in South African Workplaces Still Growing Wider
• UK Labor Rights Group Puts Wages at Center Stage of Policy Debate
• Women's Group Bringing Workplace Sexual Harassment in Singapore into Spotlight
• American Business Ethics Survey Focuses on HR Officer
• New Workplace Trends Report Notes Improvements for Employees in Hong Kong
• ILO Identifies Challenges to Integrating Female Workers into Formal Economies by Region
• Study Shows Child Labor on the Rise on Indian Cotton Farms
• Surveys Show Corporate Investors, Recruiters Putting Larger Stock in Ethics
• Report Encourages Preventive Health Care in Indian Corporate Sector
• Auditors Assess Companies' Ethical Culture
• Employees Grade Their Companies' Ethical Environments
• Survey Says Work-Life Balance Can Impact Ethical Behavior
• ILO Study Examines Global Working Hours, Policy
• ILO Reports Lack of Progress on Gender Discrimination
  
  Read more on the next page...

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New survey finds link between employer's approach to ethics, and productivity and loyalty of employees  Beaton Consulting and St James Ethics Centre Survey:

What Australian business professionals really think about ethics.

The Report based on a survey of over 15,000 individuals in professional business roles, found that employees give significant thought to ethical issues in their everyday working life and deal with ethical dilemmas regularly. And more importantly their attitudes have a significant impact on their intentions with respect to both discretionary effort and loyalty to the organization.  Simon Longstaff, Executive Director of the St. James Ethics Centre, said the findings of the survey suggest, “Organizations need to become far more serious about embedding and integrating ethics into the operating fabric of day-to-day decision making.  Performance in this area should be measured and reported.”

Mr. Longstaff added, "We may be doing real damage to the integrity of an organization by structuring remuneration on the assumption that people only work hard if bribed to do so.  Finally, we might note that the energies of vast numbers of people might be harnessed to address pressing global issues... but only if leaders speak and act clearly, thoughtfully and consistently with regard to the ethical dimension that informs our lives."

Key statistics:

* Less than 1% of individuals believe that business has no ethical obligations, or that legal compliance is the only ethical obligation of businesses.

* 84% of individuals believe being responsible environmentally is included in the definition of business ethics.

* A staggering 93% of individuals believe that organisations have an obligation to act ethically even if it occasionally harms their profits.

* And 91% agree that all organisations should make a formal commitment to acting ethically.

According to Rosemary Sainty, Head of the Responsible Business Project at St James Ethics Centre, who lead the development of the public report, "the obligations of businesses and other organizations are no longer seen in isolation from the communities in which they operate, the employees they depend upon, the environment from which they draw their resources and the marketplace in which they participate."

Key statistics:

*  80% of individuals agree that they are willing to put in extra effort at work if they know that their organization is run ethically.

*  77% agree that if their employer acted in a way that contradicted their core principles, they would definitely leave the organization.

*  One in four individuals believe their employer is not doing enough to promote ethical behavior.

*  One in four individuals experience people behaving unethically towards one another in their organization.

*  One in four individuals believe that their organization’s employees would not adhere to the code of ethics if they thought that profits or funding would be harmed.

Rosemary Sainty points out the implications of these findings for Australian employers; "Taken together, these findings may mean that at least one in four employees are not putting in their best at work – this must be having a serious impact on productivity in Australian organizations. The results serve to reinforce one of the central planks of the business case for responsible business practice: employee satisfaction - leading to improved management performance, productivity and capacity to attract, retain and motivate talented staff; increased learning, innovation and productivity; reduced hiring and retention costs.

Also visit the HUB website of the St. James Ethics Center.

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Racial Divide in South African Workplaces Still Growing Wider

The latest annual report released by South Africa’s Commission for Employment Equity claims “institutional racism continues to reign supreme.”  The percentages of non-White employees occupying top management and senior management positions still fall well below the number of economically active people, according to the report. 

The report covers employment trends between 2003 and 2007.  Slight increases in non-White representation in top management and senior management positions have been made, but progress is much too slow, the report says.  What most worried the Commission were the large decreases in the number of non-Whites occupying middle management positions compared to the large increases in the number of White employees filling these positions.  The percentage of Africans filling these positions dropped by 14.9% since 2003 and the percentage of White filling these positions increased by 8%. Finally, the report notes that the number of employed disabled people in both the public and private sector only represents .5% of the total positions, which is a decrease from 1% in 2003. 

The Commission acknowledges there is still much work to be done in creating a more equitable society.  In its letter to the Minister of Labor, the Commission states its plan to engage more fully with other labor groups and NGOs to improve these disappointing statistics.

Data from the 2007-08 Employment Equity Report in South Africa

Senior Management Positions

Middle Management Positions

Posted 9/24/08

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UK Labor Rights Group Puts Wages at Center Stage of Policy Debate

Labour Behind the Label assesses retailers’ progress in moving toward a “living wage” for all of their employees – a good indicator, the group says, of companies’ commitments to worker rights more generally.

Two years ago, the fashion industry was unwilling to address the issue of giving all employees a living wage, and even now, progress is moving at a “glacial” pace, says the British labor rights group Labour Behind the Label (LBL).  In its third review of British fashion retailers, and subsidiaries of foreign multinational retailers, LBL reports that no retailer in its survey is offering a living wage, and just half have cited actual or planned projects moving toward this goal.  Levi Strauss & Co. was the only company surveyed that still explicitly says it does not accept responsibility for workers’ wages, the report says.

According to LBL, a living wage “is one that enables workers and their dependents to meet their needs for nutritious food and clean water, shelter, clothes, education, health care and transport, as well as allowing for a discretionary income. Preferably, workers at a local level should be the ones to determine their own wages, through negotiation and collective bargaining with their managers. If this isn't possible – and to check that the negotiations have been fair – it's possible to calculate a value based on a set formula.”

The British fashion industry generates ₤36 billion in the United Kingdom alone, the report states.  The industry could have a potentially significant impact on the lives of the people who work for them.  Many of the retailers surveyed have agreed to the principle of a living wage – a sign of some progress, LBL says.  Some have even signed an official agreement to abide by the terms of the Ethical Trading Initiative (ETI), yet workable projects to offer living wages have yet to be created.

LBL recognizes that moving toward determining a living wage for workers is not an easy process and certainly not to be decided overnight.  The group advocates what it calls a “wage ladder approach,” or “mapping the different wage levels – poverty lines, outcomes of collective bargaining agreements, floor wages, calculated figures – that can be used as benchmarks on the way towards a living wage.” 

Many retailers have argued an increase in productivity would be sufficient to increase the quality of life of its employees, but LBL argues higher productivity is no guarantee.  Workers in garment factories already face a great deal of pressure to increase their output, and it is increasing every year, according to the report.  Additionally, increasing productivity is also not a guarantee that workers themselves will benefit from higher profits.

The bulk of the report is devoted to an individual analysis of how each retailer approaches the issue of living wages and is given a rating by LBL.  More briefly, LBL has outlined four pillars of establishing a living wage for workers.  Underneath each point is an update on what companies are doing in each area. 

A COLLABORATIVE, MULTI-STAKEHOLDER APPROACH

• Sainsbury's and Tesco were the only companies that did not have their own pilot projects to increase wages, but which were leaving the issue to the ETI project.
  
  
• Primark, Next, and Asda said that, in addition to their participation in the ETI project, they also had their own projects underway or planned: these projects were of variable quality (Tesco was doing research but had no project as such).
  
  
• M&S, Monsoon, Gap and New Look did not mention any involvement in the ETI project or any other multi-stakeholder living wages project, although all are ETI members. Monsoon and Gap are working from the ETI project’s terms of reference, citing practical difficulties with the project’s focus on Bangladesh.
  
  
• Arcadia is not an ETI member but is collaborating with Next.
  
  

WORKER ORGANISING AND PARTICIPATION

• Asda, Arcadia, Primark and Next made no mention of worker organising in connection with their wages projects.
  
  
• New Look's project involved worker organising, but explicitly focused on workers' committees rather than trade unions.
  
  
• M&S and Gap's projects involve worker organising.
  
  
• Monsoon's project places a strong emphasis on collective bargaining.
  
  

EXAMINING COMMERCIAL FACTORS THROUGHOUT THE WHOLE SUPPLY CHAIN

• Gap, New Look and Monsoon specifically said they would examine prices paid to suppliers (New Look said “commercial terms” and Gap “price points”).
  
  
• M&S, Asda, Next, Primark and Arcadia did not make any commitments to consider increasing prices as part of their projects, and some appeared to rule it out.
  
  

A CLEAR ROUTE-MAP TO IMPLEMENTING THE LIVING WAGE FOR ALL WORKERS

• M&S, New Look, Asda, Next and Arcadia limited their ambition only to improving wages, not to attaining living wages as a stated end point. Primark's plans were not clear.

Posted 9/15/08

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Women’s Group Bringing Workplace Sexual Harassment in Singapore into Spotlight

A high number of employees in Singapore-based companies report having been sexually harassed and left with few outlets to talk about the problem

A special group of women is taking on the growing problem of workplace sexual harassment in Singapore, a topic that gets little notice in the country and about which many are embarrassed to speak.  A group of female volunteers, working through AWARE, the leading women’s advocacy organization in Singapore, conducted a survey to better understand how serious the problem is and what measures are in place to prevent sexual harassment at work.  Sadly, results from the survey show the occurrence of sexual harassment at work is very high and many employees are unaware of their company’s sexual harassment policies. 

AWARE argues that not only is sexual harassment integral to the human right to a safe work environment, but also is the company’s best interest in order to maintain and retain a productive, motivated workforce. 

In Singapore, the subject of sexual harassment is still considered taboo in many places, but overall there is a growing awareness of the problem, the report says.  Although cases of serious sexual assault sometimes get coverage, less severe types of sexual harassment get very little attention at all.  According to the report, “There is no legal definition and no specific legislation on workplace sexual harassment” in Singapore.  Victims can only seek redress if the offense is considered criminal.  The lack of government involvement and commitment on the part of companies contribute to the prevalence of workplace sexual harassment.  AWARE’s ongoing research suggests the number of cases of sexual harassment is increasing, or more victims are willing to talk about their experiences.

The small group of women volunteers collected surveyed 500 different employees about their experiences with sexual harassment.  The number of respondents who were female was 369, the number of males was 124, and seven people declined to state their gender.  Although there were some trends among male and female responses, AWARE was surprised to find the number of male employees who also experienced forms of sexual harassment at work. 

Some Key Findings:

• 66% of the respondents had a “high level of awareness” of harassment in the workplace.  AWARE describes this as the depth of knowledge the respondents had about what constitutes sexual harassment.
  
  
• 23% said they were aware of formal redress mechanisms.  However, 50% said they knew of a department or resource person they could go to in order to report an incident. 
  
  
• 54.4% had experienced sexual harassment, and 58.3% of these were women.
  
  
• 34% of women and 19.2% of men were sexually harassed several times.
  
  
• The most common form of harassment was being referred to by an unwelcome or offensive name.  The second most common type was someone invading the employees space in a way that made him or her feel uncomfortable. 
  
  
• 9.2% of the respondents said they had been sexually assaulted.
  
  
• 12.5% said they were worried they would lose their job or not be promoted if they reported the incident. 
  
  

Experienced Sexual Harassment

Experienced Sexual Harassment by Sex

Researching Company Policies

AWARE also attempted to contact several companies that operated in Singapore in order to learn what kind of company policies were in place to prevent and redress sexual harassment.  According to the report, the vast majority of companies that were contacted refused to respond to requests for information. 

Out of 92 companies contacted, six companies and one public sector organization did respond with company policies.  The six companies include: Singapore Airlines, IBM, McKinsey & Co. (Asia), The Body Shop, Shell, PricewaterhouseCoopers, and International Enterprise Singapore.

Based on these companies responses, AWARE put together a list of best practices for curbing sexual harassment:

• Targeting sexual harassment with a specific policy or within broader policies prohibiting harassment
  
  
• Explicit definition of harassment including sexual harassment
  
  
• Clear procedures outlined to deal with harassment
  
  
• Protection for victims and witnesses from retaliation
  
  
• Extending definition of harasser beyond colleagues to vendors and clients
  
  
• Responsibility of supervisors and managers to ensure work environment is free of harassment and that staff know about procedures for complaints
  
  
• Women’s Initiatives – activities targeting women which give them a chance to address such issues as professional development, work-life balance, employment discrimination and other concerns.
  
  

Recommendations

AWARE believes governments are in the position to lead the way by specifically defining the problem and enforcing clear guidelines on preventative and remedial measures.  The report also includes a long list of recommendations directed at both the individual and organization.  The group also stresses the need for more research in this area, as no official data exists on the number of incidences reported. 

To read the full report, please download here.

Posted 7/28/08

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American Business Ethics Survey Puts Human Resource Officer at Center of Organizational Ethics

This report was specially provided to EthicsWorld by The Society for Human Resource Management

A joint survey produced by The Society for Human Resource Management (SHRM) and The Ethics Resource Center, both based in the U.S., looks at business ethics trends from the human resource professional’s perspective.  “The Ethics Landscape in American Business” report is the third since 1997 and builds on The Ethics Resource Center’s National Workplace Ethics Survey.  Around 3,000 members were selected from SHRM’s membership to answer questions in six key areas: organizational ethics, the role of the HR professional, the ethical behavior of top management, pressure to compromise ethical standards, ethical misconduct by employees, and reporting of misconduct.  In each category, the report provides different perspectives from business leaders on the implications of various findings. 

Overall, the survey found that most HR professionals were familiar with their organization’s ethics policies and that the HR department was a primary resource for ethics-related information.  When compared to employees, HR professionals were also least likely to agree that top management displayed positive ethical leadership.

Some key findings from the report are summarized below:

Organizational Ethics Standards and Practices - more organizations seem to be moving towards a comprehensive ethics program, but ethics are still largely left out of employee evaluations.

• 23% of the respondents said their companies do not have a comprehensive ethics program (based on the survey’s model which includes six elements)
  
  
• 7% said they had no element of what the survey defined as a comprehensive ethics program
  
  
• Most respondents said their organization does punish employees for unethical conduct, has a confidential whistleblowing mechanism in place and provides a written code of ethics.
  
  
• More troubling results showed 50% said they had no means of seeking ethics advice, and 57% said that ethics had no part in employee evaluations.
  
  

Roles of the HR Professional in Organizational Ethics - most HR professionals say they are very involved in the company's ethics policy, but the exact role of the HR department sometimes comes up for debate.

• 83% said the HR department was the primary resource for ethics-related information within their organization
  
  
• 71% said the HR department was involved in creating the ethics policy of the organization
  
  
• However, the report says the overall data suggests HR professionals are more involved in formulating ethics policy, but not as much a part of the “infrastructure.”  It is clear there is debate over what the exact role of the HR professional should be.  Competing views are offered concerning this trend.
  
  

Ethical Behavior of Top Management - HR professionals have comparatively more negative views of top management than employees.

• A relatively smaller proportion of HR professionals agreed with positive ethical statements about top management when compared to the responses of U.S. employees.  The same was true when asked about positive ethical leadership, the supervisor’s ability to effectively reinforce ethical behavior and strong peer commitment to ethics.
  
  
• Respondents from nonprofit organizations were less likely to agree that supervisors set a good example.
  
  
• HR professionals were the least likely to agree that top management would be held accountable in the event that they were found guilty of violating company ethics policies.
  
  

Pressure to Compromise Ethics Standards - more HR professionals say they are under pressure than employees.

• 19% of HR professionals feel pressure to comprise their ethics standards – a higher percentage than employees.
  
  
• Pressure was most likely to come from top management, supervisors and coworkers.  Other reasons given were the desire to protect the interests of the organization and a limited amount of resources.
  
  

Observed Misconduct on the Job - HR professionals are generally more aware of ethical misconduct than employees and are sometimes confused over who should manage these problems.

• 32% of HR professionals observed misconduct on the job.
  
  
• The most common types of misconduct reported were:

Abusive or intimidating behavior toward employees
E-mail or Internet abuse
Misreporting of time/hours worked
Putting employee’s interest above the organization
Calling in sick when the employee is not

• The data suggests that HR professionals are generally more aware of misconduct on the job than are employees.
  
  
• The ambiguity of whose responsibility it is to handle these problems is also addressed in this section.  A common problem is deciding whether it is the HR professional’s duty to address ethical misconduct or that of the CEO.
  
  

Reporting of Misconduct - HR professionals are less likely to fear reporting misconduct than employees and corporate ethics officers appear to be underused.

• 18% of respondents said they fear reporting cases of misconduct.  The report notes that this percentage is lower than the last survey in 2003, which stated 27% feared reporting.
  
  
• A larger proportion of employees did not report misconduct, 39%, compared to HR professionals. 
  
  
• Reasons given for not wanting to report misconduct were that they would have to report to the person involved or that corrective action would not be taken.
  
  
• When HR professionals do report misconduct, 60% report to top management and 48% to supervisors.  Although 49% of HR professionals reported having an ethics officer or a professional in a similar role at their organization, only 20% overall used that option.
  
  

The full report is available to members only, but to read more, please visit both The Society for Human Resource Management website and The Ethics Resource Center website.

Posted 6/17/08

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New Workplace Trends Report Notes Improvements for Employees in Hong Kong

A 2008 study from the University of Hong Kong and CSR Asia finds significant improvements in work-life balance for Hong Kong based employees compared to the same study that was conducted in 2004.  However, problems still exist for many employees such as pressure to work long hours and health problems due to excessive work.

In July 2006, the work week was reduced from five and a half work days a week to five days a week in the public sector, with many more private companies following suit.  The policy change, according to Richard Welford, the author of the report, seems to have had a significantly positive effect on the happiness of Hong Kong employees.  Although a good majority of survey respondents said they have too much work to do and are often stressed, more people said they were happy with their jobs than people who said they were unhappy.

Many improvements since 2004

Working hours have been reduced by five hours a week and staff turnover has significantly improved.  More companies have also instituted flexible working hours to compensate for working late.  In 2004, 34% percent of the respondents said flexible working hours were offered; whereas 46% said the same in 2008.  More people are staying in their jobs and are overall, said they were satisfied.  When asked to rate their level of satisfaction with their jobs on a scale from one to five, with 1=very unhappy and 5=very unhappy, the average rating was three.  Job satisfaction was also very similar for both men and women.

Employees still working excessively

Despite these improvements, some disturbing results appeared.  Employees are still working long hours overall, and many are working unpaid overtime.  In 2008, the range of working hours spanned from 44.5 for Government employees to 54 for those in Financial Services.  Many people feel they are expected to work late.  The reasons many survey respondents gave for working late was, “I can’t leave before my boss” and “I don’t want to be the first to leave the office.”  Some employees actually said they are less productive because they know they will be expected to work late. 

Regularly working late into the evening is especially common for people aged 30 and under (65.7%). On average, around 52% of people work overtime regularly. Males were also more likely to work late and work unpaid overtime.

Health problems common

The survey results suggest that health problems are still a serious issue.  A total of 82.5% of respondents said they suffered from stress and 75.4% from lack of exercise due to long working hours. In addition, negative health effects including poor diet (46.4%), exhaustion (45.6%), insomnia (31.6%) and depression (27.6%) were also problems that arose.

As a result, sick leave is often used more often because of working long hours, and most survey respondents said the amount of annual leave was unfair.

The report states that the health statistics are particularly alarming.  Welford, the author of the report, encourages companies to remember that such illnesses can become a financial burden to themselves and taxpayers who must spend more in regards to medical expenses. In addition to the financial burden, health problems are likely lead to lower productivity and effectiveness of workers.

Posted 5/2/08

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ILO Identifies Challenges to Integrating Female Workers into Formal Economies by Region

Comprehensive report states North Africa has the largest gender gap, whereas East Asia has been one of the most successful in achieving gender equality

Integrating women into the workforce and providing them with decent work opportunities has long been a challenge across the globe.  The International Labor Organization’s Global Employment Trends for Women assesses the progress that has been made in nine different regions.  According to a new target added to the Millennium Development Goals, “full and productive employment and decent work for all” is essential to reducing poverty.  The ILO states that at the global level, elss than 70 women are economically active for every 100 men.  Governments have an obligation to develop policies that give women an equal chance at finding decent work, and employers have an obligation to ensure proper working conditions and fair wages for both genders.

There have been improvements overall for the integration of women into the workforce, but change has been slow.  The ILO admits that additional information would be useful in determining where the real problems lie, such as indicators describing decision-making power, earnings, violence at the workplace, social protections, credit market access, etc.  However, in most regions, this information was not available.  More research should be done in order to determine how specific barriers can be eliminated.

Sub-Saharan Africa

• Very high labor market participation rates for both sexes, but “decent and productive employment with implied decent earnings, social protection, fundamental rights at work and social dialogue is certainly the exception rather than the rule.”
  
  
• High rates of poverty mean a poor person will have to accept any job available in order to subsist, lessening the options for education and acquiring skills.
  
  
• Overall, the number of males working in the formal labor market is higher than the number of women.  The ILO attributes the gap to the necessity for females to occupy themselves at home with the daily subsistence activities of poor households, rather than other factors like workplace discrimination.
  
  
• Men are moving more quickly out of the agricultural sector into other more economically secure jobs, while women are left to more vulnerable working conditions.  Men’s share in the service sectors is almost twice as high as women’s.
  
  

The challenge to both the public and private sector is to capitalize on the high economic activity of sub-Saharan African women by making it easier for them to enter jobs of higher productivity and improving working conditions.

North Africa

• Lack of decent work is less of a problem, whereas integrating women into the formal labor market more generally is a significant challenge.  North Africa has the largest gender gap in the number of women participating in the formal labor market and the highest unemployment rates for both sexes.
  
  
• There has been an increase in investment in education for young girls, but that has not yet contributed to their integration into the workforce.
  
  
• Some employers openly give preference to male jobseekers, and for those women who have gained access to education often do not wish to take up the type of jobs that are available to them.
  
  
• Most formally employed workers are in the agricultural sector.  For those workers who receive a salary, the gender gap is minimal.  What this probably means is that those women who do find employment – those that usually come from higher income background – are typically well protected in terms of security and income.
  
  

The challenge is to capitalize on the region’s comparative advantage – its human capital – to trigger a shift toward higher productivity products and services.  Well-educated women should also be given an equal chance to have access to these jobs.

Middle East

• This region has the second lowest labor participation rate and second highest gender gap out of all the regions the ILO surveyed.  On the other hand, the region also had the highest increase in female labor force participation over the last 10 years.
   
• Of women in the region that do formally work, half are in the service sector, and the rest are mainly in agriculture.  The number of women in agriculture is actually increasing, contradicting the global trend.  It is much harder for women to find decent work in the agricultural industry than in industry or service.
  
  
• The number of women in unsalaried work is significant when compared to men.  In 2007, the ILO found 43.3 percent of women were in “vulnerable employment” compared to 28.2 percent of men. 
  
  
• The situation for women is similar to North Africa in that a very small minority of women can find decent jobs, but the rest are completely shut out of the labor force.  This could be due to increasing cheap migrant labor in the region, according to the report.
   

The challenge is to motivate women to enter the formal workforce, to encourage society to accept new economic roles for women and removing existing barriers to economic integration.

Latin America and the Caribbean

• High rate of women participating in the labor force and the gender gap in this area is decreasing.  However, the number of men working compared to women is still considerably higher.
  
  
• The agricultural sector is decreasing overall.  The region is unique in that more men are in agricultural jobs, whereas women are dominating the services sector.  The female share of this sector is the second highest behind the Developed Economies and the EU, according to the report.
  
  
• The high female unemployment rate and the number of women in low-productivity jobs are the main concerning trends in this region.
  
  

The challenge is to boost job creation overall and improve working conditions so that women have access to not just any jobs, but decent jobs.

East Asia

• The economic status for this region is at virtually full-employment, with the highest number of females working and the smallest gender gap in the world.
  
  
• A slight decrease in the ratio of working men to working women in this region indicates that women have the highest degree of freedom to choose whether they want to work or not - many young women are opting to stay in school. 
  
  
• There is very little difference in the sectoral shares between the sexes.
  
  
• However, women are still more likely to be in vulnerable employment than men and working conditions could be called into question. 
  
  

The challenge is that due especially to long working hours, women are vulnerable to an imbalance in family and working life.  Employers should work to include proper benefits that take this issue into account.

South-East Asia and the Pacific

• There is a smaller gender gap in labor force participation and the number of youth employed is decreasing – a positive sign that more are choosing to stay in school.
  
  
• However, unemployment rates are increasing for women.  It is particularly difficult for young women to find jobs.  Given that unemployment is high overall, employers are more willing to take older, more experienced workers.
  
  
• The overall increase in employment in the services sector was driven primarily by women.  The number of women gaining salaried work is increasing as well.
  
  

Gender inequality in the region is less of a challenge, but policies can help protect women from situations of occupational segregation that leave them with only the low-paid, low-productivity jobs in the services sector.  There should be a greater focus on education and skills development.

South Asia

• Labor participation rates among women are low.  According to the report, compared to 100 men active in labor markets, only 42 women participate.
  
  
• Low workforce participation among women could be due to the unequal access to quality education.  Women often end up having lower skills than men and drop out of the labor force.
  
  
• South Asia strongly depends on agriculture, which accounts for almost half of total employment.  Women’s share in this sector is much higher than men, leaving them more vulnerable to indecent working conditions.
  
  
• Strong shift toward the industrial sector where there is a low gender gap. 
  
  

There are still too many people, especially women, without access to decent work, the report says. The challenge is to help women profit from a shift toward more productive sectors and a relatively low unemployment rate.  Equal access to quality education should be emphasized and more opportunities should exist for women to enter non-traditional economic roles.

Central and South-Eastern Europe (non-EU)

• Equality in labor force participation has maintained a fairly even distribution.  About 80 women are economically active per 100 men.
  
  
• Unemployment is high for both youth and adults, but for young women the rate is higher, a concerning trend for the future. 
  
  
• Huge increases in the service sector included both men and women.
  
  

Some inequality trends continue.  Planned economies had better wage equality than industrialized or developing economies and young women are more likely to drop out of the labor force.  The challenge for this region is to boost job creation to absorb more female employees and keep a close eye on factors that could contribute to lower wages for women and discrimination.

Developed Economies and European Union

• This region has the smallest gender gap worldwide in relation to those participating in the labor market.  Unemployment rates continue to be higher for women than men, but rates are lower than 10 years ago. 
  
  
• More workers are moving from industry into the service sector, especially women.
  
  
• Gender inequality surfaces when more specific indicators are analyzed.  This is the only region that the ILO was able to study this closely, because these same indicators were not available in other regions.  A pay gap between men and women is still significant.  There are more men in employer positions and men account for nearly 90 percent of the board members of leading companies. 
  
  

The challenge for the region will be to encourage more women to work, and create the necessary conditions to allow them to do so, to support an aging population.  A focus should be placed on raising workers’ skills and maintaining a proper balance for women managing both work and family life.

Posted 3/18/08

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Study Shows Child Labor on the Rise on Indian Cotton Farms

A study, jointly commissioned by several international organizations, gives an in-depth picture of the child labor situation that is currently taking place in five Indian states.  Data shows that between 2006-07, there were approximately 416,460 children employed on farms, with 54 percent younger than 14 years of age.

Children are mainly hired on the basis of a long-term contract with local farmers, who are subcontracted by Indian cotton seed companies and larger multinationals, specifically Monsanto and Bayer.  As there has recently been more pressure on multinationals to comply with human rights laws, there are less children working on farms contracted by Monsanto and Bayer than those contracted by Indian companies. 

Trends

Cotton seed production has significantly increased with the introduction of the BT gene in 2002.  Monsanto has patented the BT gene and has sublicense agreements with all Indian companies that use the gene in production. Due to the high demand for hybrid seed cotton, the total area of production in several Indian states has expanded, as well as their workforce. 

Due to the nature of cotton seed production, many farmers prefer to hire female children because they believe girls have more nimble hands and a better work ethic.  Using children allow farmers to easily control them, most children will work longer hours than adults, and farmers can pay children substantially less. 

According to Sivaramakrishna, a seed farmer in Mahaboobnagar district, Andhra Pradesh, “Cross- pollination work is very labor intensive and a large number of laborers is required to do this work. It is also delicate work and needs to be handled carefully. We prefer young girl children for this task because with their delicate fingers (nimble fingers) they can handle this work better than adults. They also work more intensively than adults. We can control them easily. They listen to us and do what ever we ask them to do. The most important thing is labor costs. Nearly half of our investment goes towards payment of labor charges. The wage rates for children are far lower than adult wages. We can reduce our labor costs considerably if we hire girl children. If we want to hire adult labor we have to pay higher wages. With current the procurement price we get from the seed companies we cannot afford to pay higher wages to the laborers.”

There are numerous risks involved for children working on these farms.  Almost 90 percent of the children are school dropouts or never went to school.  They suffer chronic illnesses from inhalation of poisonous pesticides, which have already caused three deaths.  Employing children under unsafe working conditions for below minimum wage rates violates many national laws and international human rights laws. 

Case Studies

Individual case studies were conducted in four states – Andhra Pradesh, Karnataka, Tamilnadu, and Gujarat.  Andhra Pradesh and Gujarat are the largest producers of cotton seed and have gained the most attention for child labor practices.  However, they are also areas where local NGOs, media, social investor groups, and international organizations have been the most active.  The external pressure has led Monsanto and Bayer to develop motivation campaigns, issue price incentives to growers not to employ children, black list farmers who do, and financially support special schools for child laborers in hopes they will go on to regular schools.  Due to these actions, the proportion of child labors to the total workforce on Monsanto farms in Andhra Pradesh dropped from 10 percent in 2005-06 to four percent in 2006-07.  Similarly, the proportion on Bayer farms in the same area dropped from 20 percent in 2005-06 to 11 percent in 2006-07. 

Unfortunately, some conditions have not changed.  The terms of employment still largely remain long-term contracts where farmers pay loans and advances to the children’s parents.  Working conditions also continue to be very unsafe.  Two female minors were raped and killed in 2006 on cotton seed farms and three children died from pesticide in 2004.  Migrant children are treated the worst.  They often endure physical abuse and chronic illness without access to medical care; and farmers will withhold wages and force children to work long hours.

Advocacy groups are fairly active, but this report shows child labor is still a major issue in India.

This study was commissioned by OECD Watch, Deutsche Welthungerhilfe, the India Committee of the Netherlands, Eine Welt Netz Nrw, and the International Labor Rights Forum.  Click here to see the full report.

Posted 10/18/07

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Surveys Show Corporate Investors, Recruiters Putting Larger Stock in Ethics

According to 2007 rankings, a focus on ethics seems high on the priority list

Corporate Rankings

Many media outlets annually publish rankings of the top companies and top business schools as a way of tracking trends in the corporate sector. It is striking to note that the Barron’s 2007 ranking of the World’s Most Respected Companies and The Wall Street Journal’s 2007 Recruiters’ Top Business Schools give high marks to those companies and schools with strong ethical fiber.

Barron’s bases its list of winners on a survey of American money managers, who determined that, in making their selections, what inspires respect is a combination of:  32% strong management; 25% sound business strategy; 21% ethical business practices; 9% competitive edge; 7% shareholder orientation; 4% consistent revenue/profit growth.  The not insignificant importance attached to ethical behavior clearly was an influence in both Berkshire Hathaway and Johnson & Johnson respectively taking the first and second positions.

Despite its reputation as a huge money maker, many investors often cited Berkshire Hathaway, the conglomerate founded and run by Warren Buffet, as a company that shows leadership, specifically Buffett’s “vision, patience, boldness, and modesty.”  It is also telling that in the past year, Buffett pledged his close to $40 billion fortune to the Bill and Melinda Gates Foundation, a multi-million dollar charity fund.

As for Johnson & Johnson, which took second place, Barron’s notes that, “the durability of a hard-won reputation might be most evident in the repeat performance of J&J at or near the top of the list. In most respects, the company is in a rut. Its stock has been moribund, about flat for almost two years in a hull market. The company has faced troubling safety issues...Yet, investors consistently give J&J the benefit of the doubt, owing to generations of prudent management, shareholder attentiveness and careful cultivation of trusted brands. Additionally, Barron’s reports that more than one respondent cited J&J’s recall of Tylenol from store shelves after a cyanide scare back in the 1980s as lasting evidence of the company’s integrity.

Barron’s described the trend in this year’s ranking that “corporate respect must be earned over a span of decades. While scandal or corporate-governance abuses can quickly empty a company’s reservoir of goodwill with investors and others, highly respected companies tend to retain their high marks even during lulls in stock performance or profitability.” 

The list of 10 “most respected” according to Barron’s are Berkshire as number one, followed in order by Johnson & Johnson, Toyota Motor, Procter & Gamble, General Electric, Microsoft, Nestlé, Apple, Cisco Systems, ExxonMobil. 

Business School Rankings

According to the Wall Street Journal survey, Dartmouth College’s Tuck School of Business ranked #1 as recruiters’ favorite MBA programs.  Remarkably, "when asked which graduates come out with the strongest ethical standards, recruiters named Dartmouth most often, followed closely by Brigham Young,” the school that placed second in the rankings.  Some well-respected universities placed lower on the list than in the past. The WSJ reported one respondent who cited “Students weren’t as prepared for interviews and were somewhat more arrogant than in the past. Overall, I would say the students seemed ultra-relaxed and felt that they didn’t need to try to impress the interviewers but rather the interviewers should try to impress them.” 

The most important characteristics that recruiters said they look for are interpersonal and communication skills, a teamwork orientation, personal ethics and integrity, analytical and problem-solving abilities, and a strong work ethic.

Posted 9/19/07

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Report Encourages Preventive Health Care in Indian Corporate Sector

Per Capita Government Health Expenditure in India Is One of the Lowest in the World

The state of Indian health care has changed dramatically over the past couple decades, but a focus on preventive health care is still in its early stages.  The Indian Council for Research on International Economic Relations released a study, called “The Impact of Preventive Health Care on Indian Industry and Economy,” that shows the impact preventive health care can have on economic success.  In India, per capita government health expenditure in India is one of the lowest in the world – US$7, as against US$2,548 in the United States. The report found that almost a quarter of respondent firms lose approximately 14 per cent of their annual working days due to sickness.

The researchers of this report recognize the increased awareness in the corporate sector of the importance of preventive health care for business, but the public sector has not caught up.  Therefore, this report focuses on making specific policy recommendations that will put preventive health at the forefront of corporate governance programs.

Key findings:

• Blue-collared workers face a higher risk of disease compared to medium- and senior-level employees
  
  
• Acute diseases (diarrhea, flu, malaria, dengue, etc.) have the highest prevalence, while lifestyle (or chronic) diseases are on the rise.
  
  
• India’s national income losses due to heart disease, diabetes, and stroke are projected to exceed US$200 billion over the next 10 years; however, with preventive measures, an accumulated economic growth of US$15 billion could be expected.
  
  
• Senior-level management most prone to lifestyle diseases
  
  
• Less than one-third of companies surveyed do not feel preventative health care is necessary
  
  
• Of the 288 respondents, only six offered a comprehensive preventive health plan (preventive health check-ups, regular health screening, facilities for exercising, stress relieving techniques, and lifestyle-related advice)
  
  
• Only one-third of companies have follow-up policies that come after preventive health check-ups
  
  
• 56 percent of respondents had undergone preventive health check-ups, and almost all thought they were beneficial

Recommendations for the Government of India:

• Tax exemption for medical expenses if preventive health care measures are instituted
• Corporate tax breaks to those companies that provide preventive health care facilities to their employees
• Preventive health care voucher system, financed by the government, but delivered through the private sector
• Institute the health policy reforms suggested by the National Health Policy 2002 talks
  
  

Recommendations for the corporate sector:

• Conduct health audit of all employees at regular intervals through preventive health check-ups
• A proper follow-up of preventive check-up reports should be done through treatment, lifestyle and other forms of counseling, gym recommendation, etc.
• A whole range of preventive health care measures should be provided to the employees in consultation with medical experts, not just health checkups
• Employees should be made to bear the partial cost of curative treatment, which will encourage them to adopt a preventive health care lifestyle
• Preventive health care awareness camps should be organized for employees so that they appreciate the usefulness of preventive health care
• Schemes like vouchers that put purchasing power in the hands of employees, while ensuring that they are used for intended purposes could be considered as an efficient means of providing the whole range of health care measures

To read more information about the report, click here to view the .pdf version.

Posted 9/17/07

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Auditors Assess Companies’ Ethical Culture

Oversight Systems, Inc, a provider of automated monitoring solutions, conducted a survey of 86 fraud examiners in late 2006. The results reveal that three-quarters of the respondents feel institutional fraud is more prevalent today than in 2002. The following graphs represent the survey's key findings.

Changing a company's culture is one of the most difficult tasks, but it is also a necessary component of reducing financial misconduct. The survey found that 56 percent of respondents said they have personally observed financial misconduct within the past year. Just one-third of respondents indicated immediate concern by business leaders following the arrest and prosecution by high-profile executives while only 13 percent indicated a perception of great corporate vigilance and 11 percent saw no change in institutional oversight.

According to Dana Hermanson, Dinos Eminent Scholar Chair of Private Enterprise at Kennesaw State University, “If there is a culture of never missing targets, some people will cheat to make the numbers. Their rationalization is that they are just doing what the top people want them to do. Directors and executives need to clearly communicate that ethics come before making targets. If this message is not consistently communicated, then the organization is headed for trouble.”

Participants were asked to select the three main reasons institutional fraud occurs. Four out of five fraud examiners conspicuously chose the pressure “to do whatever it takes to meet goals” as the most common reason behind institutional deceit. Executives seeking personal gain was identified as another major cause of fraud (71 percent), followed by the mentality that “I won’t get caught” (41 percent) and the delusion that they do not consider their actions fraudulent (40 percent). Just five percent indicated that a lack of understanding laws and accounting regulations was a reason behind such fraud.

In order to prevent corruption, the most common response, 43 percent of the total responses, was setting the right tone at the top. Visible prosecution and internal controls were also cited as helpful measures. Whistle-blower protections garnered a notable 12 percent score in curbing fraud.

To read the full report, click here to view the .pdf version.

Posted 8/23/07

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Employees Grade Their Companies' Ethical Environments

Five years after Sarbanes-Oxley, most American employees give publicly traded companies high marks for ethics.

Almost 70 percent of employees at publicly traded U.S. companies – those under the purview of the five-year-old Sarbanes-Oxley Act – gave their employers an “A” or “B” grade for encouraging ethical conduct, according to a new survey by the Ethics Resource Center. However, the survey found that roughly one in seven give their employers a below-average grade or failing grade, with the lowest marks most likely at companies with fewer than 100 employees.

Moreover, the national ERC survey found that a significant share believe their organizations reward employees for getting good results, even if they use ethically questionable practices:

• Overall at public companies, 22 percent said results are rewarded even at the expense of unethical practices
• At companies with 100 or fewer employees, 37 percent said that was the case
• Where there were 100,000 or more employees, 26 percent gave that answer
  

Asked, “How often does your job conflict with your personal values?”

• Overall at public companies, 20 percent of employees said that conflict occurs “sometimes or always”
• Thirty percent of those at organizations with 100 or fewer employees said it occurs “sometimes or always”
• At companies with 100,000 or more employees, 27 percent gave that answer

When asked to grade their organizations’ efforts to encourage ethical conduct on a scale of A thought F, with A being the best, employees of all publicly traded companies surveyed judged their workplaces as follows:

A – 35 percent
B – 34 percent
C – 18 percent
D – 10 percent
F – 4 percent

• Grades for encouraging ethical behavior were lower for companies with fewer than 100 employees
• Nearly one third of employees at smaller issuers gave their company a below-average grade (a “D” or an “F”)

According to previous ERC studies, employee perceptions of corporate ethics are driven by several factors – awareness of the importance of ethics as initiated by top management, an organizational culture that reinforces the importance of ethics, and the presence of an ethics and compliance program (including internal controls) that detect misconduct taking place.

This most recent national poll confirms previous indications that smaller organizations are more challenged and have more work to do in encouraging ethical work environments.

Please visit the Ethics Resource Center's website to read more information.

Posted 8/7/07

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Deloitte & Touche USA Survey Says Work-Life Balance Can Impact Ethical Behavior

Management and supervisors play a direct role in helping to create a positive ethical culture in the workplace.

A recent sruvey revealed there is a strong, positive relationship between good work-life balance and ethical behavior at work.  The 2007 Deloitte & Touche USA LLP Ethics & Workplace survey also showed that the behaviors of management and direct supervisors, coupled with positive reinforcement for ethical behavior, are the top factors for promoting ethical behavior in the workforce.

According to the survey, a combined 44 percent of workers cite high levels of stress (28 percent), long hours (25 percent) and inflexible schedule (13 percent) as the causes of conflict between their work responsibilities and personal priorities, hence contributors to work-life imbalance. Sixty percent of employed adults surveyed think that job dissatisfaction is a leading reason why people make unethical decisions at work, and more than half of workers (55 percent) ranked a flexible work schedule among the top three factors leading to job satisfaction, second only to compensation (63 percent).

Management and direct supervisors also have a big impact on influencing ethical behavior and creating an ethical work culture. Employed adults ranked the behavior of management (42 percent) and direct supervisors (36 percent) as the top two factors contributing to the promotion of an ethical workplace.

"In order to encourage high ethical standards within our organizations, we first have to provide an environment that is conducive to ethical behavior," said Sharon L. Allen, Chairman of the Board at Deloitte & Touche USA. "However, management and leadership have a huge responsibility in setting examples for their organizations and living the values they preach if they want to sustain a culture of ethics."

Posted 6/20/07

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Working Time Around the World: Trends in Working Hours, Laws and Policies in a Global Comparative Perspective

Most men are working too much, while most women cannot work enough. On a global scale, many find inappropiate working hours to be a major challenge to overcoming poverty.

In a new study released on June 7, 2007, Sangheon Lee, Deirdre McCann and Jon C. Messenger of the International Labor Organization analyzed the distribution of working hours in over 50 different countries.  Results indicated that although there has been some progress in regulating normal working hours in developing and transitioning countries, one in five workers are still working more than 48 hours per week.  Peru is at the top of the list, with 50.9% of its workforce working over 48 hours per week, followed by the Republic of Korea at 49.5%, and Thailand at 46.7%.  In more industrialized countries, the figures are lower.  The United Kingdom has only 25.7% of its workforce working over 48 hours per week, and the United States has 18.1%. 

The study highlights several problems associated with long working hours.  There is less time to be spent with family and greater hazards for workplace injury.  A significant observation is the growing gender gap in working hours.  On average, men are working longer hours than women, which is often a necessity just to survive.  Alternatively, women, in almost all cases, are more likely to work short hours.  They are forced to give up longer hours at a paid job to have time for unpaid work, such as caring for family or those who are ill.  In both cases, it is still very difficult for these workers to break the cycle of poverty.

The researchers suggest two key reasons why it is difficult to regulate working hours – the expanding service sector and the growing number of those involved in informal employment.  Industries such as wholesale and retail trade, hotel and restaurant service, transport, storage and communications are all sources of longer work hours.  In addition, as much as 50% of those employed in the developing world work in the informal sector, with 30% of self-employed men working more than 49 hours per week. 

The study also provides a number of suggested policy points designed to advance decent work in the area of working time. Some of these policy suggestions include:

• reducing long working hours to lessen the risk of occupational injuries and illnesses, and their associated costs to workers, employers, and society as a whole;
• adopting family-friendly working time measures adapted to national circumstances, such as flexi-time, emergency family leave, and part-time work;
• promoting the development of high quality part-time work, shaped by local institutions and traditions;
• adopting reasonable statutory hours limits that can contribute towards enhancing firms' productivity, and measures to assist enterprises to improve their productivity, in order to help break the "vicious cycle" of long working hours and low pay;
• considering measures that allow workers to devote more time to their families and to have more influence over their work schedules, in order to make formal economy jobs a possibility for more women.

Posted 6/14/07

In related news... ILO Reports On Asian Labor Conditions: Prospects Shocking. “One thing is clear: doing business as usual is not sustainable over the long term,” said ILO Director-General Juan Somavia. “Asia is experiencing unprecedented growth and development. At the same time, vulnerabilities arising from environmental pressures, economic insecurity, shortcomings in governance and unequal income distribution pose a threat to the region’s future development.”

Recent ILO conference data emerged that noted despite stunning economic growth, more than 50 per cent of the Asian work force, or 900 million workers, still survive on less than US$2 per person, per day. Unemployment rates are slightly higher than ten years ago at 4.7 per cent in 2006, compared with 4.2 per cent in 1996, while the incomes of many workers have deteriorated. About 1 billion people face poor working conditions, lack of job security, benefits and career opportunities. They have less access to information and enjoy fewer market opportunities, voice and representation to articulate their interests.

By 2015, the persistence of the informal economy in Asia, the explosive growth of many Asian countries’ urban populations, and the increase in service-sector employment will combine to significantly expand the urban informal economy.

Posted 9/5/07

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New ILO Global Report on Equality at Work 2007

Despite major progress, workplace discrimination persists and is taking on new forms.

May 10, 2007: The International Labor Organization has released a comprehensive report Equality at work: Tackling the Challenges. It provides a global picture of job-related discrimination, citing both progress and failures in the struggle to fight discrimination ranging from traditional forms such as sex, race or religion, to newer forms based on age, sexual orientation, HIV/AIDS status and disability.

The conclusion is that, “Despite major advances in fighting discrimination at work, mounting inequalities in income and opportunities and significant and persistent forms of workplace discrimination are causing growing concern.”

ILO in Geneva stated that a major theme of the Report is the persistence of gender gaps in employment and pay and the need for integrated policies addressing sex discrimination in remuneration and occupational segregation by sex, while reconciling work and family responsibilities. For example, the report states that throughout the European Union, the difference in average gross hourly earnings between women and men across the economy throughout all establishments has remained high at 15 per cent.

Female labor force participation rates continued to rise significantly, currently at 56.6 per cent, thus narrowing the worldwide gender gap in labor participation rates. However, the report states, progress has been uneven with North America at 71.1 per cent, 62 per cent in the European Union, East Asia and the Pacific at 61.2 per cent and the Middle East and North Africa at 32 per cent.

A key measure of women's improvement is the availability of good-quality jobs for women in legislative, senior official or managerial (LSOM) positions with higher participation rates indicating a reduction of discriminatory barriers. Women still represent a distinct minority in such positions throughout the world, holding only 28.3 per cent of these senior jobs. There is uneven progress across the regions with North America at 41.2 per cent, Latin America and the Caribbean at 35 per cent and the European Union at 30.6 per cent. This indicator has seen the most growth in South Asia, where it has nearly doubled in nine years, however women in this region still hold the lowest share of these jobs at 8.6 per cent.

Noting that the efforts by ILO member States to stamp out workplace discrimination have moved forward significantly, the report says, "The condemnation of discrimination in employment and occupation is today almost universal, as is the political commitment to tackle it."

The need to combat discrimination at work is more urgent than it was four years ago, said ILO.  "In the face of a world that appears increasingly unequal, insecure and unsafe", adding that "significant and persistent inequalities in income, assets and opportunities dilute the effectiveness of any action aimed at combating discrimination. This may lead to political instability and social upheaval, which upset investment and economic growth."

Posted 6/11/07

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