Labor law and human capital management

Law and HCM

Equal Opportunity and Employee Rights and Human Capital Management: It's Not Just a Good Idea, it's the Law

Equal employment opportunity and wrongful discharge definitions are two important legal aspects of human capital management today. These two sets of labor laws define acceptable standards and practices for all phases of employment at almost every organization. In the software industry, these issues can be very immediate and expressly important due to the industry's highly competitive and multicultural nature. Specific organizations have more issues with these areas of legal and practical interaction than others, but all are affected by them. This paper identifies and briefly details the manner in which these legal requirements interact with the practicalities of human capital management.

Introduction

Human capital management is a complex field of practice and endeavor simply due to the varying and varied demands of any given business organization -- effectively and efficiently allocating human resources and utilizing available human capital in a way that is beneficial to the organization and the individuals that comprise it is a time-consuming and often uncertain affair without the addition of any outside constraints. These constraints are necessary, however, especially in the form of legal requirements ensuring the fair and ethical treatment of employees and allowing them recourse when management infringes on employee's rights. There are many ways that labor laws interact with human capital management; two are discussed below.

Equal Opportunity and Wrongful Discharge

Equal employment opportunity is one of the most discussed and scrutinized topics in human capital management, as it is both enforced by federal law and central to the ethical performance of human capital management functions (Bohlander & Snell 2009, pp. 100). The equal opportunity requirements cover all phases and functions of almost every job, from hiring procedures to treatment on the job, promotions and rewards, and tasks assigned. It also governs the process of termination, to some degree, though this is the more narrow and detailed focus of laws pertaining to wrongful discharge. Up to two-hundred thousand people are wrongfully discharged every year, under a concept that challenges the basic precepts of employment-at-will (Bohlander & Snell 2009, pp. 572-3).

Important Legal/HCM Relationships

The practical implications of these legal imperatives on operating human capital management procedures and professionals are difficult to overstate. Equal employment opportunity is guaranteed in several different laws, which taken together insist that there be no discrimination in hiring, pay-scales, tasks and promotions, or any other facet of work based on nationality, religion, gender or race (Bohlander & Snell 2009, pp. 105-6). Human capital managers must ensure that all employees are judged/promoted/rewarded based solely on their merits, and must make sure that this is clearly evident, as well. The same applied to wrongful termination; not only must management ensure that all terminations take place for valid, non-discriminatory, non-retaliatory, and honest fashions, or risk litigation (Bohlander & Snell, pp. 573).

Labor Law in the Software Industry

Equal employment opportunity requirements are a source of no small amount of frustration in the software industry, for human capital managers and employees alike. The international and highly multicultural nature of the software industry can at times assuage feelings of unfair practices, but at other times factions can emerge that claim -- rightly or wrongly -- unfair treatment based on nationality or religion. Women, too, often feel (and often are) undervalued in the software industry, especially in lower-level positions. Wrongful discharge complaints are not as common, but the high level of competition in the industry and the rate of overturn at many companies has led to some significant issues and claims, perhaps more so than in other less competitive industries and organizations.

Closer to Home

At organizations in which this author has more direct experience, the relationship of these legal requirements to human capital management practices and policies has been somewhat more seamless than in other companies within the software industry. As a smaller company with a core group of employees that outsources much of the workload rather than expanding (in both size and complexity), human capital management is a more immediately obvious facet of the business to all concerned, allowing conflicts and grievances to surface and be dealt with quickly and easily rather than having them become entangled in a legal morass. This does not mean that there have not been allegations of unfair treatment, but these were handled very rapidly in a professional and direct manner.

Gaps Between Textual Ideals and the Real World