BUSM4499 Human Resource Management - LACK OF ETHICAL LEADERSHIP Assignment Solution

Introduction 

Ethical leadership is important in the current global business environment as it is one of the major components required in creating value for the business by shaping the actions and behaviour of the whole organisation. A successful organisation consists of ethical leadership which builds an atmosphere of trust, respect, dignity and principled culture among its workers. Failure to adopt ethical leadership can have negative consequences which can affect the business in the long term. Based on these notions, this essay will discuss how the ethical leadership in Human Resource Management is failing the organisations of the Hospitality Industry, County Fire Authority (CFA) and the Banks, their staff and other stakeholders. The focus is to identify the key problems in these sectors/industries arising due to bad ethical leadership and then propose recommendations that would enable the HRM to effectively resolve these problems evident in these organisations. The academic literature research will help in identifying the issues that exist in these industries and the AHRI HRM model will help in providing recommendations for each industry. 

Lack of Ethical Leadership in the Australian Hospitality Industry

It is the responsibility of every employer to show leadership qualities for the workers, especially ethical leadership to form a pattern of acceptable behaviour. It means hat the employers need to be unbiased, fair, assign authorities and responsibilities, pay fair salaries, and maintain a safe and respectful environment in the organisation (Kiliç, Pelit and Altunöz 2011). However, as the hospitality industry is known to be competitive and full of challenges, it would not be surprising to know that the increase in these challenges may raise issues of unethical management behaviour. Managers assert their own ethical perceptions and beliefs in the business operations rather than following the codes of conduct (Robertson, Gilley, and Street 2003). The key issues that arise in the hospitality industry include underpayments of wages, non-payment of overtime wages and exploitation of the workers through their visa conditions, gender discrimination, race discrimination, targeting migrants and young workers (Cavanough & Blain 2019). 

According to the articles published by Schneiders and Millar (2018) in The Sydney Morning Herald, there are several issues that exist in the hospitality industry regarding the ethical leadership. The famous and huge restaurants of Rockpool Dining Group and by Heston Blumenthal have been exposed of practicing unethical managerial behaviour with the staff. The unfair wages, long working hours, unpaid overtime, underpayments and exploitation of the immigrant workers, in spite of the huge profits and tax havens, are the recent issues of the eatery business. “It is a breach of workplace laws for an employer to require excessive unpaid overtime that pushes wages below minimum legal rates” (Schneiders 2018). 

Wage theft is one of the major issues arising in the hospitality industry which deprive the workers from their legal entitlements (Queensland Council of Unions, 2018). It occurs when the employer pays the workers less than the minimum wage, refuses to pay overtime, fails to give meal breaks to the workers, demands off-the-clock work from staff and pays the workers with tipped minimum wage for non-tipped or side works (Hatic 2018). Carey (2017) also talks about the insecure nature of the work in hospitality industry and quotes Will Barsby, a lawyer, who states that the workers in the hospitality industry do not have unions similar to other labour industries, therefore, they are open to exploitation by the employers as working might be the condition to their visas. Non-compliance with the ethical codes is becoming common nowadays in the eatery business, where the Fair Work ombudsman audits found out that ‘38% of the business who had breached the law, underpaid their staff, while 28% failed to keep adequate employment records and pay slips’ (Houses & Holes 2018). 

The newspapers like, The Sydney Morning Herald and The Age are full of the examples of the famous Australian restaurants and eatery businesses that are practicing these unethical behaviour with the staff or chefs. In spite of their huge earnings, why they do not pay the workers their legal wages, is a matter of concern. The workers are deprived of thousands of dollars per week. There is also some discrimination based on the gender of the workers. The survey conducted by the Department of Sociology and the Center on Policy Initiatives in the San Diego State University (2015), shows that the wage theft is targeted on women more often: 37% of female respondents and 28% of males in the sample were found in the year 2014. Moreover, the employers force the employees to break laws, practice violations and fraud and record the details of the meal breaks and overtimes falsely (Center of Policy Initiatives 2015). The act of wage theft and other related issues and frauds should be considered seriously and action should be taken in response to it.