What Is HR's Ethical Responsibility in the Digital Transformation Age?

​Company executives are eager to supercharge their decision-making process with technology that helps them process massive amounts of data. Keeping a strong focus on company values and ethics when gathering, using and disseminating that data can be critical to the organization's success. 

As companies embrace new tools that drive efficiency, cut costs and improve the delivery of products and services to customers, human resources managers recognize that the growing amount of sensitive data available requires the data to be collected, managed and used in a way that is consistent with company values and adheres to legal and regulatory requirements.  

Additionally, software that closely monitors employees' daily activities challenges HR managers who are trying to build a good employee experience. 

Bringing Values to Work

Examples of how new technology can perpetuate bias and violate privacy are increasing. When Amazon wanted to automate its recruiting system, it built a machine-learning computer model from resumes mostly from men that were submitted to the company over a 10-year period. The system taught itself to downgrade female candidates and prefer male candidates. It was therefore scrapped and never used companywide. A valuable lesson was learned: Building a machine-learning algorithm for recruiting works best when gender-neutral data is used.

Privacy advocates are wary of facial recognition technology that law enforcement organizations say helps them track people suspected of serious crimes. Studies reveal that racial and gender bias plagues facial recognition technology.

HR managers need only look at the $5 billion settlement that Facebook has to pay to the Federal Trade Commission for the social media company's mishandling of massive troves of personal data to know that the inappropriate collection and use of customer information can be costly, both financially and to a company's reputation.

[SHRM members-only toolkit: Introduction to the Human Resources Discipline of Ethics]

Artificial intelligence, biometrics, and tools that monitor employee behavior at work and consumer activities online result in volumes of personalized data being introduced into an organization's workflows, often without a clear regulatory framework to guide companies on how they should handle that data, said Anjali Lai, senior analyst at Forrester Research.

"The continued rise of emerging technologies at the workplace has put ethics to the test," Lai said. "The challenge for HR managers is trying to figure out what is the potential of technology and what are all of the scenarios in which it both provides value but also destroys value."

Values and ethics are inherently personal, she added, which makes rallying an entire organization around a value code relating to workplace technology even more challenging. In a time of record-low unemployment, as employers search high and low for new talent and struggle to retain the workers they have, 87 percent of respondents to a recent Forrester poll said they are more likely to stay with a company that shares their values.

"You have to account for an incredibly diverse set of ethical codes," Lai said. "Finding that alignment between the shared values in the company among employees and management and those among consumers is a challenge in itself, but one that is necessary to be successful in the future."

Using Data Well and Ethically

At a growing number of companies, HR managers must figure out how to use the information gathered from software that measures how workers spend their time on the job. Tools from ActivTrak, for example, can monitor the minute-by-minute activities of employees when they surf the Internet. Teramind's software monitors employees and generates data for behavior analytics. Inevitably, many ethical questions arise with this kind of tracking.

One big issue, according to Brian Kropp, group vice president and HR practice leader at Gartner, is that employers are relying on technology to generate data on an employee and are then using that data to apply a predictive model to that employee, but the predictions are not 100 percent accurate. One question that arises: Where is the ethical line between what data is acceptable to collect about employees and what is not?

"That line is moving quickly," Kropp said. "For example, we can put sensors in our employees' chairs to track how often they sit at their desk, but should we? On one level you can argue absolutely yes, because you want to know that people that are sitting there are productive. Furthermore, for health reasons, by knowing how often people are sitting down, we can make suggestions to them that they should stand up and move around and that will improve their health, which is a good thing. But should we?" Kropp said.

As these ethical questions become increasingly important in the digital transformation age, many employees and managers will turn to HR, Kropp said. HR leaders need to create and implement policies that are transparent, and they should explain why management wants to collect data on workers and how it will help make their working lives better.

According to Kropp, if the decision-making is left to the general counsel or the compliance division, the company will avoid risk but also miss out on the opportunity to deploy breakthrough innovations using analytics that generate valuable insight about employees. If the decision is solely managed by the IT staff, the technology will be the priority at the expense of employees' response to it, and that will create a variety of ethical violations.

"It's HR's job to manage between those two competing tensions and work with those other entities to get to the right answers that employees across the company feel comfortable with," Kropp said.  

Nicole Lewis is a freelance journalist based in Miami. She covers business, technology and public policy.