TnT Company currently is one major plastic manufactures in the plastic industry. The success that the firm has today is so much thanks to great contribution of all employees. However, there is an issue that has arisen among the company. There is an 57 years old employee who works in the Marketing Department now not be able to perform his tasks as well as before. However, firing or continue hiring this employee both have major impacts on TnT due to some ethical and economic issue. Therefore, managers in TnT have to be very carefully examine and analyze the situation in order to point out the best solution for both company and the old worker.
2. ETHICAL ISSUE:
In this case, the firm knows that firing this employee will affect badly to his annual income and furthermore to his family. Besides that, this old employee has been working for the firm 19 years, it is not a short time, and definitely he contributed not a small part in the company. The “fairness or justice approach” implies that everybody should be treated equally base on the ethical action. Thus the firm seems to be unfair with this employee because of age discrimination and furthermore unfair with the one who has lots of contribute to the company success. Firing him also makes the firm against the “right approach” which strongly respect one own human’s rights. This employee has his right to work like every other people as he is willing to work until 62 years old. If the company does not treat its employees well, of course, those employees will not take the firm’s business serious. It will raise a question among the employees as if they would be treated the same way with this man. Consequently, it results to the lower productivity and loyalty of the firm’s employees. The company will not just has bad view from its employees but also bad perspective from customers and society as a whole; that what “Common good approach” talks about. “This approach calls attention to the common conditions that are important to the welfare of everyone”. Therefore the company should not ignore this important field because it could affect the firm strongly in term of productivity, reputation and sale volume.
On the contrary, another thing that the firm is considering is still employing this old employee. It could also influents many other aspects. As mention above, the “fairness or justice approach” concern about the equality between people, however, it also indicates that people should be treated fairly and proportionately if unequally base on ethical action. In this case, other labors in the company may not be treated equally; this old worker now cannot fulfill his job but he still earns money from the firm. However, it could be argue that there are more positive ethical perspectives when keep this old worker with the company. According to the “utilitarian approach”, it identifies the harms and benefits in term of the satisfaction of personal preferences or in purely economic term. It means the company does not put much concern about the economic term, how much to employ this inability working employee and how much money will regard. It focuses on moral and ethical issue which tries doing the least harm to anyone who are affected. Employ him does not harm to any people excluding some employees who feel unfair with this one, additionally, it bring more benefits for the company. The firm will have good reputation because it respects the old one and appreciates the well-contributed working life one. As a result, the firm’s productivity and sale volume could increase. It also fit to the “Virtue approach” which says “the ethical action is the one that embodies the habits and values of humans at their best”. By doing this, the firm will be seen as a moral and ethical organization which tolerate, honesty, fairly, fidelity and generosity.
3. RELEVANT STAKEHOLDER:
3.1. INTERNAL STAKEHOLDERS:
3.1.1. The older employee
The older people always contribute an important voice in society, especially in Vietnam. For the older worker in this case, his advice or idea is valuable and have great esteem from other people in company, therefore, a clever solution of this issue may change not only in that worker’s thought but also in other employees in TnT’s company. If TnT’s managers cannot give any acceptable decision, they will break the solidarity between employers and employees. It seems to make people feel no more truth in company and like the bad forecast for TnT future.
Whatever solution will be chosen, the young employees will think it seem to be the result in their future if they still work for TnT. Therefore, when young workers look at the way TnT’s managers solving the problems with older employees, they may change their views about TnT company. If workers feel satisfy with the managers decision, the output of productivity may be improved and the company will also get more benefits. The increasing of belief and’ loyalty of employees will lead to the increase in quality of products. However, if the company managers do not do well in this issue, they will get the protest from other workers. It may cause to the reducing in productivity, company’s reputation or even occurring a strike of employees, then TnT will get into many problems including inside and outside of company. For example, while people are in strike, TnT’s production will come to a standstill which directly affect on company’s income, the government legal department will also find out the cause of issue and they can punish or close the business.
3.1.3 Manager departments
Marketing, production and financial managers are also impact to TnT’s decision. The ideas or advises of these department are very important to deciding the best solution for TnT’s problem. For example, Production department are able to know clearly about TnT’s employees, their ability and can suggest that TnT can keep this worker or should not basing on his profile and his working performance. Besides that, financial manager can show that which decision is able to perform depending on company’s financial situation. In addition, marketing department can find out the best solution by their micro and macro environment researching.
3.2. EXTERNAL STAKEHOLDERS
3.2.1. Competitors and customers:
Firing or keeping the older worker also influence on TnT’s competitors and customers. If TnT cannot make the older worker satisfy with company solution, competitors may take unfair advantages of this situation and embroiling TnT’s experienced workers to their companies. A remarkable example occurring in Vietnam last year is Vedan company and the way they pour toxic waste into Thi Vai River. That action impacts badly in its local’s environment and makes Vietnamese people turned their backs to Vedan. Similarly, in case that TnT makes an unfair treatment with that old worker, then the bad rumor spread out, the support from TnT’s customers will be reduced rapidly. As a consequence, TnT business will get threats very soon.
3.2.2. Public organization
Employees are protected by many organizations, especially Vietnam Labor Unions. Therefore, any actions that affect the right of this older worker may be kept a close watch on company by these organizations, which established to protect the rights of employees. If they unite together to support that old employee to sue TnT or forcing company to keep him until his retirement age, the dilemma will become a serious problem. Since, TnT will be always under these organizations control as well as their pressures.
3.2.3. Social view
To run a success business in long term, the view of social is very important. In Vietnam, where the older people are always respected as the traditional thinking, TnT may be isolated with the social if company cannot show its respects to that older worker in particular and to the old people in general. Similarly, there are no more changes for TnT to develop its brand wealthy and successfully in Vietnam.
4. OPTION ANALYSIS
4.1. OPTION 1: “Carry the employee for one year until his retirement benefits are in full force”.
In case that TnT Company takes this action it can be considered as a safe solution for the old worker because there is no effect on employee’s morale and loyalty. It also refers to the right approach if the solution is undertaken. The company will offer the old worker a chance to continue his job and protect his right to be awarded due to long time he was up and down with the firm. Moreover, many other employees especially the older ones in the company will look at manager’s manner and they highly possible form a positive perspective of the way TnT treats its labours. Therefore, they know that the company respects the old workers and it creates belief for them. Through this action the firm reaches to the virtue approach which encourages its employees perform their tasks better.
However, on other aspect this solution does affect quite much on company budget. First of all, the company will definitely have to hire additional employee to fulfill lacking performance ability of the old one and it charges $40.000 in next quarter. Additionally, many legal advisors concern about the same situation might happen in the future and it costs $50,000 incurs if other workers require for the same treatment. Ethical issue should be concerned by any company but if it is not realistic and effects too much on the company expenses rather than the benefits it can get, the solution might not be a good way to go.
4.2. OPTION 2: “Fire the employee”.
In reality, many companies will prefer this solution because it only costs $27,000 for employee severance payment. Moreover, the company does not have to worry about its labours productivity or negative effect on Marketing Department because it is quite flexible to fire the old worker and hire a new one. Therefore, it guarantees every activity in the company will be processed well and it may bring more profit rather than expenses. At the point of economic perspective view this action brings the best benefit to TnT Company.
Nonetheless, it has high probability of being sued for age discrimination. In other words, if TnT takes this solution the firm would fight against the common goods approach. The reason is this employee is 57 years old; he is vulnerable and too old to be able to find another job. Thus, if he is fired it indicates that TnT Company does not protect the weak people and there is a distinguishable line from old employees to the young ones. Furthermore, the firm would not also concern to the justice approach while firing the old worker. He may feel unfair because he contributed so much to the company growth throughout 19 years and cannot be kicked out easily like that. Therefore, the probability of this case can be happened is very high and it will cost additional $100,000 in total for the lawsuit. Furthermore, the company will get bad reputation of being disrespect for old worker. In terms of both ethical perspective and economic perspective, this solution is the worse one.
4.3. OPTION 3: “Offer the employee early retirement with full benefit of a 20-year employee”.
With this solution, it obviously carries less harmful effect on worker. Thus, there will be no chance of being sued if the company stops the old labour from work together with offering him an early retirement with full benefit of a 20-year employee. This solution shows fairness approach because the old worker will retire with his deserving reward and other employees who have better skills will have chance to take his place. Hence, TnT is still able to keep its employees belief and loyalty and in addition have an effective employee to replace this weak point and the company can remain its productivity and keep growing.
Nonetheless, in other point of view, it might cause dissatisfaction for the old worker and it does not follow the right approach because this labour is willing and wants to work until he is 62 years old. Thus, this action will upset him and somehow make him lose face because everybody in the company will know that he is now unable to catch up with the workload and he no longer being an able employee as in the past. In addition, if other older workers demand equal treatment it will increase cost incur up to $100,000 in total. This kind of situation will highly happen so it charges the company very high price if the solution would have been done and also HR Department will have to deal with blank positions and losses experienced workers.
4.4. OPTION 4: “Offer a training program for older workers”
Following this option, it seems to have the highest moral intensity so consequently, the turnover rate will be reduced moderately. Moreover, with special training program it can increase the old worker’s performance and he will be able to remain and work in the company until his wish age. Through this virtue approach, it does not only conduct satisfaction and more loyalty for employees but also brings benefit to the company thanks to the improvement of the old workers and good reputation. Besides, comparing to other solution it costs only $65,000 at least to train all older workers. It can be viewed that this solution bears of both the most ethical perspective and economic perspective.
However, there is still disadvantage of the solution due to some people may think it is not necessary to train old workers who is weak and only continues working in a few years.
5. EVALUATION AND OPTION SELECTION
After examining all of four options, we realized that every option brings both advantages disadvantages to the company and none of them are perfectly fit into ethical perspective either economic perspective. Therefore, it requires more carefully solutions analyzing in order to choose the best one. After a discussion involved managers in company, TnT decided to choose solution 4 to solve the problem.
5.1. IMPACT ON TNT COMPANY AND ITS STAKEHOLDERS
5.1.1. Internal impact
Following the option 4 means the company have to pay $65,000. It is clearly not a few bucks but huge amount of money but, TnT believes that this money is spent in right place. This employee has a very long working time in the company; his contribution to TnT cannot measure into specific number. Thus, there is no reason for the company to treat him like useless people when his performance is not effective as before. The employee has the right to work because he is still not at retired age and actually, he is willing to continue his career in the company. Hence, stop him from working by anyway is totally unfair for him and the worker might feel like he is discarded. For those reasons, the company drew a solution to offer a special training program for not only him but also other older workers to be trained and improve their working skills.
This action intends to show all the employees in company that they are not hired to work and make profit for the company but the company in return does care about them. The company does not only offer them job opportunity while they are young and have full ability but also encourage them and help them improve when they become weak and old. Besides, it demonstrates that there is no age discrimination that old workers will have to suffer and they will never be considered as a burden for TnT.
Through this method, TnT can increase loyalty from employees therefore, increase productivity thanks to positive thinking of workers and they will try their best to work for the company. Considering to long-term growth, the solution costs $65,000 at the first place but as a result, when productivity of all employees increases the company will definitely grow faster. Besides, due to high morale intensity TnT will not have to face with any legislation issue that may occur.
The solution brings benefit to both employee and the company. It guarantees for better production process, the company is able to keep an experienced worker as well as the old employee is allowed to continue working, contribute to the company with more effective performance as his desire and be able to earn more money for himself.
5.1.2. External impact
Vietnam is a country that has a very strict tradition costumes especially in respecting the older. Therefore, TnT as a company operates its business in Vietnam cannot against this tradition and the country culture. Every activity, which is undertaken by the company, will have impact on other external stakeholders. In this case, social view is considered as the biggest one. If TnT does not know how to treat old employees in right way and regard them like expired products, society may view at the company as a material manufacture. Thus, there will be never a good reputation for the company, customers might boycott its products and eventually the company will fail.
5.2. CONSEQUENCES OF SELECTION
Generally, option 4 is considered as the best solution to solve the problem that TnT Company is facing. Nevertheless, there is no perfect way and this option does bring some limitations. First of all, the company will have to pay extra money for training workers and it takes quite a long time. Meanwhile, demand of the market changes every day as well as new technology. Therefore, it is not easy for old people to cope with new business. The Manager will have to consider carefully about designing training program to be appropriate and accurate for what employees are lacking.
Moreover, many people might feel that it is not necessary to train old workers who can work for only few years. The company is wasting money on them and instead of trying to improve those old workers the company should save money to hire a young and talent one to take their positions.
Another issue is that, it is a risk probability that the program may not work out and the old employees are still unable to work as before. Thus, the company does not only throwing away a lot of money but also fail its employees’ trust.
5.3. IMPROVEMENT OF IMPACTS OF CONSEQUENCES
In order to limit disadvantages of the solution, it is suggested that the manager should take time to identify the accurate lacking skills of the employees and through that he can be able to conduct the most effective program to fulfill their ability. Besides, the company should think about establishing a friendly working environment whereas young and older employees corporate and helping each other freely. Thus, the old employees can be more up to date with new technology, new trend of the market while young employees will gain more experiences from predecessors.
5.4. OTHER IDEA TO SOLVE DILEMMA
5.4.1. “Change the employees’ salary situation”:
Recently, TnT are paying the same level salary to every working employees. However, every worker has the different ability to work, different healthy status, that lead to the output of productivity different. By this calculating, it is not matter that any worker performs many or less products, they get the same amount of money. If TnT pay salary depend on the output that each worker can make, it is more fairly for workers, who have high distribution and company also can salvage the capacity of high performance workers. So, the old workers will get the salary as much as they can perform. Moreover, a bonus budget will be awarded for workers, who have the highest output in each quarter. This way will encourage TnT employees hard working to get higher income.
5.4.2. “Short term labour contract”
TnT can also sign a short term contracts with employees and resign it annually. This method will clearly indentify the duties and the benefits of each part in contract. By this method, TnT can avoid similar dilemma in the future and also other different problems. Beside, employees will work more effectively, improving their working skills frequently to be able to resign the labour contract with company in the next periods.
In conclusion, the dilemma situations occur normally in business and requiring company to solve the problems effectively. For this dilemma, there are no perfect or completed decisions are given, but TnT chose the option that company think it is the best solution which was decided among the managers of company. TnT believes that the long term benefit of company will come up by contributing the good relationship with employees as well as the respecting them.
Anderson, P., Beveridge, D., Scott, T. and Hofmeister, D., 2008, Threshold Competitor, ver. 4.17, Prentice Hall
Manuel V., Dennis M., Michael J. M., Thomas S., Margaret R. M., David D., Claire A., and Kirk O. H., ‘A Framework for Thinking Ethically’, Viewed 15th, April 2009.