chapter  3
12 Pages

Universal and national norms for Organizational Compensation Ethics: Using severance pay as an illustration

Many compensation strategies, policies and decisions have a significant impact on employees’ lives. For example, the decision to terminate long-term employees without any compensation for their service to the firm reduces the employees’ medium-term income because employees who are involuntarily terminated seldom obtain employment at their previous compensation level. Consequently, compensation strategies, policies and decisions have an ethical dimension because ethical considerations are relevant whenever someone’s decisions result in harm to others who are not involved in making such decisions (Morris, 2004).