Ethical Solutions

Workshop Five-Ethical Solutions Paper
Jackie Marshall
June 19, 2013

Workshop Five-Ethical Solutions Paper The owner of a company reduced wages by 5% for all employees in 2010 due to the aftereffects of 9/11: an action that was necessary in order to save the company from financial ruin during a very turbulent economy. Since that time, no one within the organization has gotten a raise. However, the business has now stabilized, showing a net profit for the fourth quarter of 2011, all of 2012, and the first and second quarter of 2013. Unfortunately, the owner of the company still refuses to grant any wage increases for 2013 or even consider giving back the 5% reduction taken in 2010. I believe there are unethical elements to this situation. The employees were willing to work with the owner when the business encountered financial difficulties. More than 75% of these employees, hardworking and loyal to the business, have been with the company for more than 15 years and agreed to the pay cut in order to help save the business. However, now that the business has turned the corner, the owner refuses to work with his employees regarding pay increases or even giving back a portion of what the employees gave up. The owner is ignoring the loyalty and continued hard work of the employees that helped to make his company become successful once again. The result is unhappy, disgruntled employees, many of whom are considering looking for employment elsewhere.

Step 1-Relevant Stakeholders The relevant stakeholders in this situation include the owner, the employees, the families of the employees, the customers of the company, and competing businesses.

Step 2-Relevant Economic Issues The relevant economic issue was originally the turbulent economy created by the aftereffects of 9/11. However, the relevant economic issue currently is that employees are having difficulty making ends meet because of the continued increase in costs of food, shelter, gas, and health care (each employee pays 75% of the cost) without an increase in pay.

Step 3-Law, government guidelines, or company policy violations. In the ethical dilemma presented above, the owner has not broken any laws, government guidelines, or company policies with his decision. However, the motto of the company is, “At ___ we are a family, a family that takes care of one another.” Fortunately, the family came through and took care of the company in its time of need. Unfortunately, the company is refusing to come through and take care of the family in their time of need.

Step 4-Three plausible solutions to provide a desired resolution to the dilemma.
Solution 1 – The owner could grant a 2% wage increase across the board for all employees for 2013. He could then meet with the employees and explain that his intention is to give back the 5% wage reduction the employees were generous enough to give up in 2010 by returning 2% in the current year, 2% in the following year, and 1% in the third year. He could also explain that this plan is contingent on the company making a profit in each of those years.
Solution 2 – The owner could provide a bonus for each employee, based on salary and length of time with the company. He could then meet with the employees and explain the bonuses are his way of showing appreciation for their continued loyalty and hard work for the company.
Solution 3 – The owner could choose do nothing in regards to wages. His business is currently successful and the less he pays out in wages the more profit his company makes.

Step 5-Biblical ethical principles supporting or rejecting the solutions.
Solution 1 – If the owner were to choose this solution, I believe he would be following the idea of justice found in Isaiah 56:1 by “doing what’s right and doing it in the right way.” Although the business has made a large enough profit over the past seven quarters to give back the entire 5% pay cut immediately, spreading it out over the next 2 ½ years allows the employees to feel valued by the company while not jeopardizing the company’s cash flow.
Solution 2 – The I Timothy 5:8 principle of “providing for his own” supports the decision of the owner to take care of his “family” by rewarding the loyal and hard-working employees with a bonus. Not only is the owner providing for his own but he is allowing his work family to better provide for their home families.
Solution 3- This solution is contrary to the concept of not holding back an employees pay as found in Deuteronomy 24. While the employees voluntarily took a 5% pay cut during a difficult economic time and there was no written agreement the pay cut would be temporary, it was assumed the employees would be given back the 5% when the economy turned around. The company has now been profitable for almost two years, yet the owner is still holding back the employees pay.

Step 6-Secular ethical principles supporting or rejecting the solutions.
Solution 1 – Ethical egoism rejects this solution because it considers what is best for the employees rather than just what is best for the owner. If the owner chooses to give percentage increases over several years, it will cut into the profits of the owners company putting less money into his pocket. On the other hand, Kantian ethics supports this solution because the owner has a duty and obligation to his employees. While the employees agreed to a reduction in pay without a promise from the owner to give that reduction back when the business starting to turn a profit, the owner should feel a duty and obligation to return it.
Solution 2 – This solution is supported by utilitarianism because the positives outweigh the negatives. While giving a bonus may eat into the company profits, doing so generates good will with the employees. Employees are recognized and rewarded for their hard work, which makes unhappy and disgruntled employees happy and content. Happy and contented employees tend to be more productive which can result in higher profits for the company. This solution is further supported by the principle of following the common moral beliefs approach to decision-making. The owner is doing the fair thing by recognizing the employees for their loyalty and support during a very difficult financial time.
Solution 3 – Ethical egoism supports the decision of the owner to do nothing in regards to wages for the employees because giving raises or providing bonuses would cut into the profits of his company. On the other hand, utilitarianism does not support this decision because it does not consider the impact this decision has on all the stakeholders. The choice to do nothing lacks impartiality because it is made in the self-interest of an individual-the owner.

Step 7-Selected solution is the best alternative based on analyses from steps 5 & 6.
The best alternative to solve this ethical dilemma is solution 1. By providing percentage wage increases over a three-year period, the owner is being just and fair with his employees by giving back what they were willing to give up without jeopardizing the cash flow of the company. This solution is really a win/win for the company and the employee. The employee feels valued and appreciated by the company, which makes him or her more productive. A more productive employee increases production, which generates higher profits for the company.