Reference no: EM133311692

Case Study: Hiring Ethics: A Case of Undue Influence in Employee Selection (Case citation - Villegas, S. G., & Bockorny, K. M., (2020). Hiring ethics: A case of undue influence in employee selection. In SAGE Business Cases. SAGE Publications, Ltd., https://dx.doi.org/10.4135/9781529793130) The role of a bank manager provides exciting interactions with hundreds of clients, prospects, and co-workers alike. Sam Vincent, branch manager of the privately owned regional bank Intermountain Trust Bancorp, gladly began the recruitment process for a new personal banker position. Sam had developed a reputation within the organization as someone who sought to build up each of his employees through effective training, coaching, and providing the tools they needed to be successful in their job. His team was happy, self-motivated, highly accomplished, and very competitive. This managerial philosophy and style made Sam a popular manager. During the past year under his leadership, traffic and customer service levels had increased exponentially at his office, surpassing expectations. The growth allowed his office approval to add additional staff to keep up with customer demand. He was excited to grow the number of employees in the office and was hopeful for the reduced workload. A personal banker position for Intermountain Trust Bancorp had several minimum requirements (Table 1). These factors gave a baseline for the minimum criteria needed for employment consideration, yet Sam had crafted a list of desired attributes and characteristics for his team's ideal candidate (Table 2). There was more at stake than solely filling this position. Management was aware that multiple stakeholders that would be affected by the decision, including the existing branch staff, bank clients, community business leaders who would interact with this person, and the organization itself. Contrary to shareholder theory, the ideal candidate for this position would be someone who provided benefit to all branch stakeholders, including staff, customers, and management. Cognizant that the new hire would impact the corporate culture of the branch, the concept of proper team fit weighed heavy in the hiring decision. Whoever was chosen would be expected to have a high level of hardiness, demonstrated success with diversity, and the ability to thrive in the demanding world of retail banking. Table 1. Minimum attributes of a potential candidate. Applicants needed to be a minimum age of 18 years Be authorized to work in the United States Have a high school diploma At least one year of sales experience At least one year of customer service experience Fluent in the English language Able to pass a background check Within hours of the position being posted to the company website, there were several internal candidates (existing employees from other offices/departments within the bank) and external applicants (those outside of the company) who applied for this position. By mid-week, there were 54 applications for this single role. After applications and resumes were sorted, the list was narrowed to a few top candidates. Each of the finalists met the minimum criteria for the position (Table 1), and many had several of the ideal candidate qualities (Table 2). With so many qualified candidates, management was optimistic and determined to find the next successful banker for this office. Table 2. Attributes & characteristics of an ideal candidate. Significant sales experience with a proven track record Sense of urgency to complete work accurately and expediently Values community engagement and is a visible member of the local business community Exudes professionalism Brings a positive attitude and upbeat personality to the workplace Is a team player; Post-secondary education in business, finance, or communications Interviews began, aiming to find the best candidate for the position. Amid the interview process, Laura Henry, an administrative assistant from Intermountain Trust Bancorp's Business Banking department, called Sam's office and requested an urgent and private meeting. This was an odd request, but not completely unprecedented. When Laura arrived at Sam's office, he could tell by her demeanor that something was wrong. Even before he could close his office door to allow for privacy, Laura began crying and demanded loudly that he hire her for the open banker position. Sam was rightfully confused. He closed the door to his office and patiently asked, "Where is this coming from?" Laura was adamant that she be the only candidate considered and that she should be offered the position. Having worked next to Sam and his team over the past year, Laura had developed a good working relationship with everyone in the branch. She was friendly, kind, and loved to joke around with co-workers and clients alike. A natural extrovert, Laura never met anyone that she could not connect with on some level. She had been with the company for over ten years, had held various positions throughout the organization, and had an additional ten years of banking experience working for a direct competitor. With over twenty (20) years of experience in the banking industry, Laura had substantial industry knowledge. Even with these positive attributes, Laura had developed a reputation for her inconsistent work ethic, unprofessional demeanor, and unprincipled communication style. Laura's only work experience from age 18 was in the banking industry. A banker was how she identified herself, and this identity was constructed through the culmination of her personal values, beliefs, and work experience. Prior to Sam's interviewing process, Laura learned on her grapevine that there would be new leadership in the business banking division that she worked in, and that many positions would either be consolidated or cut-out completely. This meant that lay-offs within the company were a real possibility, and Laura's employment and position were now at serious risk of elimination. On the day that Sam began to interview his top candidates, at the morning coffee with her colleagues, she learnt the possibility her reporting to a new manager, her job requirements would change dramatically, and she would be expected to increase sales production among assigned business banking clients. Laura was in shock, scared, and worried about her future, as working in the banking industry was the only career she had ever known. Laura shared with Sam the news about the internal re-organization and her fear of being terminated from her current role. Empathetically, he listened to Laura's employment request and her explanation as to why she felt that she was the ideal candidate. The unexpected nature of Laura's interest in this particular position created a quandary for Sam. On paper, Laura had impressive qualities, and Sam knew the potential benefits of hiring her. However, after working near her for the last year, he was also aware of several drawbacks that made her a less than ideal candidate (Table 3). After having listened attentively, Sam explained that he would like to think about the situation and decide what was best for the company and the entire team. To this request, Laura replied, "We are friends; you need to do me this favor for all of the business clients that I have sent over to your department for loans" Given Sam's meticulous dedication to finding a candidate with specific characteristics, he was surprised that Laura assumed that this position was nothing more than a reciprocal exchange that obligated him to hire her based on her past business referrals. Table 3. Benefits & drawbacks to hiring Laura for the open position. Internal candidate familiar with the organizational culture; Lack of post-secondary education; 20 years of banking experience; Reputation as a procrastinator; Known in the local business community. Inappropriate communication; Well versed in GAAP and credit underwriting; Unprofessional demeanor; Strong understanding of bank systems (limited training required); Difficulty with self-regulation; Excellent relationships with branch business clients. Questionable work ethic. Rather than leave, Laura persisted in her attempt to persuade Sam's decision and leverage their relationship for her benefit. As they had developed a work friendship over the years, Sam patiently gave Laura the benefit of the doubt and listened to her explanation. Laura continued her attempt to convince Sam why she was the best candidate for the position. Then, in an additional attempt to get what she wanted, Laura shifted to a different and more drastic approach. In an instant, she changed her approach, tone, and demeanour. Rather than appeal to Sam with her qualities as a potential candidate, Laura became forceful in her persuasive tactic and demanded, "Friendship aside, it is your ethical responsibility to hire me for this position, and you should not even consider any other candidates. If you do not hire me, I will lose my job, lose my car, become homeless, my grandkids whom I care for will be sent to foster homes, and I will no longer have health insurance benefits for my chronically ill husband." Sam was floored. All of these scenarios were a very real possibility, and Sam knew that Laura cared for a chronically ill spouse and her grandchildren. Laura then said, "You are a manager who cares for his employees; I need you to invest in me as you do for the rest of your team." At this point, the conversation ended. This was not hyperbole, and there was some truth in what Laura said. The magnitude of this hiring decision became clear. The ethics of hiring someone was more than adding a team member; it was providing someone with a means to a livelihood, professional identity, and opportunity for self-fulfillment. As the hiring manager and ethical gatekeeper for his office, Sam was puzzled as to which decision he should make. Sam wanted to be ethical and fair in this hiring process and employee selection. Now faced with a decision that would affect the corporate culture of his office, Sam was placed in an unforeseen and difficult dilemma: how to deal with pressure from a friend/work partner/employee in the form of undue influence to affect his choice. As a new manager he knew the choice was not going to be easy, but a decision needed to be made.

Question (a) Why do you think the organisation encourages stakeholder approach for social responsibility in the hiring decision than shareholder approach?

Question (b) How does stakeholder approach in the hiring decision can build managers who promote social responsibility?