The Ethics of Dismissing Employees

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January 1, 2006
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Moses L. Pava

Ten years later, it still stings. A New Jersey Jewish Day School rejected our daughter’s kindergarten application because there was not enough space for her. But friends from her preschool class, in seemingly identical circumstances, were accepted. When I asked for an explanation from the school, I was told that they could not disclose the procedures they used to determine who was in and who was not. This was proprietary information. “You wouldn’t understand the process, anyway,” the president flatly explained. I did not agree. I believed then, as I still do, that while this school was under no obligation to accept our daughter, the school was, and is, accountable to the broader Jewish community upon which the school depends for its continued existence.

This idea of accountability is applicable, of course, beyond Jewish organizations and can be used, especially, to identify an organization’s unique obligations to its employees.

But what precisely is accountability? I define it as the ethical obligation to explain one’s actions to all legitimate stakeholders. In the case of firing employees, it implies a responsibility to explain fully the rationale for their termination. This does not mean employees must agree with the reasons provided by employers, but employees have a right to know the reasons.

In a capitalist economy, accountability is at the very heart of business and organizational ethics. In an efficient free-enterprise system, managers must retain the flexibility to hire and fire employees depending upon changing economic circumstances. And at other times, unfortunately, organizations will have to fire employees for cause. Accountability means that employees are informed why such drastic action was necessary from the organization’s point of view: What is the corporation’s new strategy? What are its corporate values? What formal procedures were used to determine who is in and who is out? Like all stakeholders, employees have come to rightly expect a full and transparent explanation from organizational leaders justifying important actions in a meaningful way.

The ethical obligation of accountability outstrips contemporary legal requirements that employers possess toward workers. Ultimately, this obligation is grounded in the hope of creating more humane organizations, where individuals are treated not only as a means to achieving corporate goals, but as individual human beings.

Accountability to stakeholders – employees, parents of kindergarten students, or others – is a moral minimum. It is a first step to re-imagining the meaning of corporate social responsibility. The ideal of giving a plain and public account of one’s behavior to those parties affected by one’s decisions takes us beyond a purely mechanistic understanding of business. It is a flat-out rejection of the old cliché , ” business is business.”

Martin Buber, the great Jewish theologian and philosopher, provided us a glimpse of a new way of being and interacting with others. He labeled it the “I-Thou relationship.” In his book, I and Thou, Buber upheld the human will to “profit and to be powerful,” but he warned that these desires “have their natural and proper effect so long as they are linked with, and upheld by, his will to enter into relation.” Accountability to the other, whether in personal or business relations, is an acknowledgment and a foundation of our willingness to “enter into relation.” It is only with this realization that a concerted and sincere dialogue on business and organizational ethics can emerge.

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Dr. Moses Pava, Professor of Accounting and Alvin Einbender Professor of Business Ethics at Yeshiva University, is the author of Leading with Meaning and Business Ethics: A Jewish Perspective. Next month attorney Sam Wyman wrestles with a decision to reduce the staff at his law firm.

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