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Workbook for model training package on integrity

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					                                                                                                                                   CMD April 2004



     Workbook for model training package on
                   integrity



1.      How it all fits together.................................................................................................................... 5
2.      Ethics.............................................................................................................................................. 8
     2.1.       So what is ethics? .................................................................................................................. 8
     2.2.       Professional values ................................................................................................................ 8
     2.3.       The ACT Code of Conduct.................................................................................................... 9
     2.4.       Key documents .................................................................................................................... 10
3.      Dealing with fraud and corruption................................................................................................ 11
     3.1.       SERBIRs ............................................................................................................................. 11
     3.2.       Focus on prevention ............................................................................................................ 11
     3.3.       Dealing with cases of fraud and corruption......................................................................... 11
     3.4.       Monitoring and accountability.............................................................................................12
     3.5.       Key documents .................................................................................................................... 12
4.      Public Interest Disclosure (PID)................................................................................................... 13
     4.1.       Who can make a disclosure? ............................................................................................... 13
     4.2.       What sorts of things can be disclosed? ................................................................................ 13
     4.3.       Who can you make a disclosure to? .................................................................................... 13
     4.4.       How are you protected if I make a disclosure?.................................................................... 13
     4.5.       What happens after you have made the disclosure? ............................................................ 14
     4.6.       What you are still not satisfied? .......................................................................................... 14
     4.7.       Key documents .................................................................................................................... 14
5.      ATTACHMENT - Some ethics case studies ................................................................................ 15




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You may have been a bit surprised to see the title of the ACT’s policy change recently
from ‘fraud control’ to ‘integrity’.

There is a very good reason for this change. Chief Minister’s Department became
aware that the existing framework for fraud control had fallen out of step with other
changes in ACT administration. In particular, the government’s policies on enterprise
risk management had made many of the procedures out dated.

When, in consultation with all ACT agencies, fraud control was examined to see how
it could be improved, it became very apparent that fraud control was very closely
linked to the ACT’s anti-corruption activities. As well, both of these issues were
related to the code of ethics that governs ACT public servants. A further area that is
closely related is the procedures that encourage and protect citizens (including public
servants) when they report some wrongdoing in ACT administration.

Having recognised how interrelated all these areas are, it made sense to look at it all
together, under the one policy umbrella. We called it integrity.

This workbook looks in more detail at the components of the integrity system. It
outlines the ACT whole-of-government policies in these areas.

Of course, within this framework, your own agency may have particular policies and
procedures that supplement the elements of the integrity framework. Where these are
relevant they have been included in this training program.

If the agency wants to make some statement about the importance it places upon
integrity, it should be inserted here.




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    1. How it all fits together
The following diagram 1is one way of thinking about the relationships between ethics
and the criminal justice system.

                                                      ETHICS




     INDIVIDUAL                                  INTEGRITY                                  ORGANISATION




                                               CRIMINAL JUSTICE



In the Individual/Ethics quadrant we have the mechanisms that focus upon the ethical
behaviour of individuals – even when they are working in a particular organizational
setting. Characteristic of these types of mechanisms is the statement of the ‘seven
principles of public life’ as articulated by the United Kingdom Parliamentary
Committee on Standards in Public Life2.
        Selflessness
        Holders of public office should act solely in terms of the public interest. They
        should not do so in order to gain financial or other benefits for themselves,
        their family or their friends.
        Integrity
        Holders of public office should not place themselves under any financial or


1
 This diagrammatic representation is based upon the work of Dr John Uhr, Research School of Social
Sciences, Australian National University
2
 United Kingdom Cabinet Committee on Standards in Public Life (no date) The Seven Principles of
Public Life http://www.public-standards.gov.uk/about%20us/seven_principles.htm Accessed 29
August 2003


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           other obligation to outside individuals or organisations that might seek to
           influence them in the performance of their official duties.
           Objectivity
           In carrying out public business, including making public appointments,
           awarding contracts, or recommending individuals for rewards and benefits,
           holders of public office should make choices on merit.
           Accountability
           Holders of public office are accountable for their decisions and actions to the
           public and must submit themselves to whatever scrutiny is appropriate to their
           office.
           Openness
           Holders of public office should be as open as possible about all the decisions
           and actions that they take. They should give reasons for their decisions and
           restrict information only when the wider public interest clearly demands.
           Honesty
           Holders of public office have a duty to declare any private interests relating to
           their public duties and to take steps to resolve any conflicts arising in a way
           that protects the public interest.
           Leadership
           Holders of public office should promote and support these principles by
           leadership and example.
What is noticeable about these principles is that they focus on individual, rather than
group responsibility.

In the Organisation/Ethics quadrant we have ethics issues addressed in a far more
collective form. An example is the values of the ACT Public Service3:

Government agencies shall have an objective of implementing the following values
and principles:
(a)        service to the public;
(b)        responsiveness to—
           (i) the requirements of the government; and
           (ii) the needs of the public;
(c)        accountability to the government for the ways in which functions are
           performed;
(d)        fairness and integrity;
(e)        efficiency and effectiveness.
Moving down to the Individual/Criminal Justice quadrant, we enter the area of using
the criminal law as a deterrent to individual wrongdoing. This statement by a former
Commonwealth Director of Public Prosecutions about using criminal sanctions in the


3
    Section 6 of the Public Sector Management Act 1994


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area of corporate regulation, gives a feel for the purposes of these traditional
mechanisms.

        Its force as providing an effective deterrent to criminal behaviour should not
        be underestimated. If the only sanction available to deal with corporate
        misconduct is civil action designed to disgorge illegally obtained benefits then
        the corporate criminal will simply factor the likelihood of being caught and
        penalised into the cost of doing business. It becomes a fairly straight forward
        mathematical equation to estimate the risks involved and the likely penalty.

        On the other hand if there is a real chance of going to gaol then this introduces
        another factor into the equation. Whatever you may have heard and read gaol
        is not a nice place to be and the thought of going to gaol is a real deterrent to
        the white collar criminal4.

Finally, in the Individual/Criminal Justice quadrant we find mechanisms where
organisations, or collectives of organisations attempt to increase the effectiveness of
the criminal justice sanctions. Characteristic of this approach is this statement in the
ACT Integrity Policy, (page 1):
‘The ACT Government is committed to:
    •   encouraging its employees, and all persons who perform functions on its
        behalf, to act with the highest integrity;
    •   ensuring that its employees do not abuse their office; and
    •   protecting its revenue, expenditure and property from any attempt, either by
        members of the public, contractors, sub-contractors, agents, intermediaries or
        its own employees to gain by deceit financial or other benefits.
This policy is designed to protect public money and property, protect the integrity,
security and reputation of our public sector agencies while maintaining a high level of
services to the community consistent with the good government of the ACT’.

What will have already become obvious is that these quadrants all mesh into one
another – with the common element being the notion of ‘integrity’. Organisations,
and individuals who work within those organisations, will quite obviously need to
cover off on all four dimensions. The emphasis that will be placed upon them will
depend upon the environment the organisation is working within.




4
 Rozenes, Michael and Graeme Davidson 1996 Corporate Misconduct and the Criminal Justice
System AIJA Seminar on The Courts and Corporate Law, Melbourne Business School, Melbourne
University, 31 October 1996


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    2. Ethics.
    2.1. So what is ethics?

While ethics may sound like a very academic issue, far removed from our everyday
lives, it is something that impacts upon us and an issue we often have to deal with –
particularly in the workplace. Recently there has been a vigorous public debate as to
whether women not in a marriage-type relationship should be able to access in-vitro
fertilisation services. Also, there was, a little time ago, considerable discussion as to
whether the radio personalities John Laws and Alan Jones should have revealed
sponsorship deals when they were commenting on issues where their sponsors had an
interest. All this would seem to indicate that ethics is increasingly a matter of interest
and concern in our community.

Some of these ethical issues are matters that we need to think about, like abortion and
euthanasia. Other ethical issues are more a matter of will, for example, where an
individual has to grapple with a decision on whether to accept a bribe.

In the workplace, ethical issues centre around our role as administrators – of people
and of resources. Before going any further into management ethics, it is worth taking
a moment to consider what is (and is not) ethics. Closely related to the domain of
ethics and morality, are issues of legality. These two overlap, but not exactly, because
some actions that are legal (like refusal in-vitro fertilisation facilities to homosexual
couples) are immoral or unethical. Other actions that are immoral and unethical (like
adultery) are not illegal. And of course many actions (like murder) are illegal, are
immoral and unethical. In a similar way, personal self-interest overlaps, but is not
synonymous, with the domain of ethics and morality.

So how do you know when we have entered the domain of ethics?

•   when we ask ourselves the question ‘What should I do?’, or

•   when we use words like ‘right’, ‘wrong,’ ‘good’, ‘bad’, ‘moral’ or ‘immoral’.

    2.2. Professional values

       The key ethics ideas (core values) in public sector roles are -

               that public officials occupy a position of trust;

               they exercise delegated powers assigned by the Assembly, on
               behalf of the public at large;

               they are therefore expected to use those powers for a proper
               purpose as expressed in law, or

               under a valid direction by a Minister;

               officials are expected to act competently (that is, with relevant
               skill), and responsibly (that is, with due consideration of the
               consequences of their actions);


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               officials can expect to be accountable for their advice and
               actions - to a manager, the head of their organisation, and perhaps
               ultimately to the Assembly, and may be required to give reasons
               for decisions to those affected by them;

               officials are expected to act in the public interest, or sometimes,
               the national interest - that is, for the overall good of the
               community as a whole, or the nation, depending on the
               circumstances.

              officials are expected to be disinterested - that is, to exclude
              conflicts of interests , so that when acting in an official capacity,
              their advice, decisions and actions should be, and appear to be,
              unaffected by any interest arising from their private capacity.

       Some additional features of the role of the public official is that they are
       employed at public expense, use public resources, and enjoy a range of specific
       legal protections. Public Service Codes of Conduct therefore emphasise the
       values of responsibility, legitimacy, fairness, efficiency and effectiveness,
       diligence, accountability, and integrity.

   2.3. The ACT Code of Conduct

The code of conduct can be found in Section 9 of the Public Sector Management Act
1994. It is so important that it is reproduced below in full:

A public employee shall, in performing his or her duties:
   •   exercise reasonable care and skill;
   •   act impartially;
   •   act with probity;
   •   treat members of the public and other public employees with courtesy and
       sensitivity to their rights, duties and aspirations;
   •   in dealing with members of the public, make all reasonable efforts to assist
       them to understand their entitlements under the laws of the Territory and to
       understand any requirements which they are obliged to satisfy under those
       laws;
   •   not harass a member of the public or another public employee, whether
       sexually or otherwise;
   •   not unlawfully coerce a member of the public or another public employee;
   •   comply with this Act, the management standards and all other Territory laws;
   •   comply with any lawful and reasonable direction given by a person having
       authority to give the direction;
   •   if the employee has an interest, pecuniary or otherwise, that could conflict, or
       appear to conflict, with the proper performance of his or her duties—
           o disclose the interest to his or her supervisor; and


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           o take reasonable action to avoid the conflict;
       as soon as possible after the relevant facts come to the employee’s notice;
   •   not take, or seek to take, improper advantage of his or her position in order to
       obtain a benefit for the employee or any other person;
   •   not take, or seek to take, improper advantage, for the benefit of the employee
       or any other person, of any information acquired, or any document to which
       the employee has access, as a consequence of his or her employment;
   •   not disclose, without lawful authority—
           o any information acquired by him or her as a consequence of his or her
             employment; or
           o any information acquired by him or her from document to which he or
             she has access as a consequence of his or her employment;
   •   not make a comment that he or she is not authorized to make where the
       comment may be expected to be taken to be an official comment;
   •   not make improper use of the property of the Territory;
   •   avoid waste and extravagance in the use of the property of the Territory;
   •   report to an appropriate authority—
           o any corrupt or fraudulent conduct in the public sector that comes to his
             or her attention; or
           o any possible maladministration in the public sector that he or she has
             reason to suspect
   2.4. Key documents

As well as the code of conduct reproduced above, other key documents are:

   1. ACT Public Service Code of Ethics Booklet

   2. Public Sector Management Standard 1

Both these documents are available on the CMD, Industrial Relations and Public
Sector Management website http://www.psm.act.gov.au/publications.htm.

If there are any agency specific codes, or directions that impact upon conduct, these
should be mentioned at this point.




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   3. Dealing with fraud and corruption
The ACT Government takes the maintenance of the integrity of the ACT public
service very seriously. For many years it has had policies for dealing with fraud and
corruption and these were updated in December 2003 with the Integrity Policy. The
following is a very brief outline of the arrangements for dealing with fraud and
corruption.

   3.1. SERBIRs

In every ACT agency, there is a senior executive appointed by the Chief Executive
responsible for business integrity risk (SERBIR). The SERBIR’s responsibilities are
to ensure that the Government’s integrity policy is implemented in the agency.

If you have any questions about issues of integrity that you do not want to raise with
your superior, the SERBIR is a good point of contact.

   3.2. Focus on prevention

Fraud and corruption are best dealt with by ensuring that all the proper controls are in
place. To achieve this, every agency undertakes an assessment of the risks to integrity
based upon the Australian New Zealand Risk Management Standard (ASNZ
4360:1999). This is done every two years and involves looking at each function very
carefully. If you are asked to participate in this process, please give it careful
attention and provide information honestly and frankly. Good protections against
fraud and corruption can only work if controls are analysed carefully.

Of course if, outside the risk management cycle, you see any processes that you think
make your agency vulnerable to fraud or corruption, you are strongly urged to raise
this with your supervisor or the SERBIR.

   3.3. Dealing with cases of fraud and corruption

Most cases of fraud and corruption come to light because a concerned staff member
raises the matter. You will have already noted that under the code of conduct, when
fraud or corruption is suspected, officers have a duty to report the suspected fraud or
corrupt act to the Manager of their section.

Situations can potentially occur where you do not want to report the suspect activity
to a particular person because you might suspect that person may be involved in the
issue in some way. To fulfil the obligations to report in these circumstances, there is a
hierarchy of procedures:

   1. In the event that the you believe the suspect activity relates to the Manager,
      then you should report the suspect activity to the Director of the business unit;

   2. If you feel uncomfortable about raising a matter with the Manager of their
      section or the Director of the business unit, you should report the suspect
      activity to the SERBIR;


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    3. If you feel uncomfortable about raising a matter with the SERBIR, then the
       you should report the suspect activity to the Chief Executive; and

    4. If you feel uncomfortable about raising a matter with anyone in the agency,
       including the Chief Executive, then you should report the suspect activity to
       the Ombudsman or the Commissioner for Public Administration.

If you feel that you may be exposed to some sort of reprisal or legal action because
you have raised an issue of fraud or corruption, you should raise these concerns with
officer receiving the report and the matter will be dealt with under the Public Interest
Disclosure procedures and the protections under that legislation will apply. These
procedures are described in detail in Section 4 of this workbook.

If you come across an issue that you think might be fraud or corruption in the course
of your work, you must not assume that it is your task to get to the bottom of the case.
It is essential to talk to supervisors and/or the SERBIR before going any further. If
there is a serious breach, it is essential that the first steps in dealing with it are taken
very carefully, otherwise a possible prosecution could be jeopardised.

Confidentiality is also essential. The more people that know about the issue, the
greater the danger of any action to deal with the case being compromised.

    3.4. Monitoring and accountability

Under the Integrity Policy, CEOs are responsible for ensuring that fraud prevention
procedures are developed and implemented. Usually the SERBIR will be the action
officer for these arrangements.

Your agency will have an Audit Committee, with an independent chair, that assists the
CEO in making sure that all these procedures are appropriate and are being
implemented.

External organisations play an important accountability role. The Office of the
Auditor-General takes a close interest in the area. Also, the ACT Ombudsman
frequently becomes involved when complaints are made that may impact upon fraud
and corruption.

    3.5. Key documents

The key documents on the fraud and corruption are:

    1. Integrity Policy

    2. Public Sector Management Standard 1.4

Both these documents are available on the CMD, Industrial Relations and Public
Sector Management website http://www.psm.act.gov.au/publications.htm.

Another document of relevance is Model Chief Executive Financial Instruction (1.7)
which can be accessed on the Treasury website at
http://www.treasury.act.gov.au/accounting/html/guidelines.htm.



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   4. Public Interest Disclosure (PID)
The ACT has legislation enabling all citizens to bring forward information about
improper conduct within the ACT public sector.

That legislation is the Public Interest Disclosure Act 1994 and it is an important
element in maintaining the highest standards of integrity in the administration of the
ACT. Persons who use this scheme to bring forward information have protection
from reprisal action that could happen as a result of bringing forward the information.

   4.1. Who can make a disclosure?

Anyone can make a disclosure, including ACT public employees.

However, there are penalties for providing information that you know to be false or
misleading.

   4.2. What sorts of things can be disclosed?

The PID Act covers reporting of a range of types of wrongdoing by public officials in
the ACT public sector such as:
   •   Dishonesty or bias;
   •   Misuse of public information;
   •   Negligent or improper use of government funds;
   •   Trying to influence a public official to act improperly;
   •   Conduct that could endanger the health or safety of the public; or
   •   Victimising a person because they have made a public interest disclosure.
   •   The Act only deals with improper conduct in the ACT public sector.
   4.3. Who can you make a disclosure to?
   •   Most ACT Departments, Commissions and Authorities can receive a
       disclosure. Every one of these agencies has a nominated person to help you
       with disclosures.
   •   It is best if you make the disclosure to the public sector agency that handles
       the wrongdoing that you are concerned about, in most cases this will be the
       agency that you work in.
   •   Do not worry if you make the disclosure to the wrong ACT agency, the
       receiving agency will pass it on to the correct agency.
   4.4. How are you protected if I make a disclosure?
   •   The Act makes it an offence to victimise a person because that person has
       made a disclosure.
   •   If you are at risk of victimisation, you can be moved to another job.



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   •   If you are victimised, you can go to court to take action to stop victimisation
       or to seek damages. You may need to see a lawyer to obtain legal advice
       about your case or going to court.
   4.5. What happens after you have made the disclosure?

First the agency will examine the information you have provided and make some
decisions:
   •   The agency will look at it to see if it comes under the Act;
   •   The agency will then decide if it is the appropriate agency to deal with the
       disclosure. If it is not, it then pass it on to the agency best able to deal with the
       matter; and
   •   The agency will find out if another agency, court or tribunal has already
       looked at the matter.
   •   You will be notified in writing if the agency refers your disclosure to another
       agency (including the Ombudsman) for investigation. If, for any reason, the
       agency decides not to investigate the matter, you will also be notified in
       writing and the reasons for that decision explained.
   •   You will be notified in writing if the agency commences an investigation into
       the matter. Competent, impartial people who have no previous involvement in
       the matter will undertake the investigation.
   •   If the investigation finds that some wrongdoing has occurred, the agency is
       under an obligation to take appropriate action. At any stage in the process,
       you are entitled to be notified of progress of the investigation.
   4.6. What you are still not satisfied?
   •   You can contact the ACT Ombudsman to discuss whether you can lodge a
       further disclosure.
   •   Alternately, you could seek your own legal advice about your rights.
   4.7. Key documents

The key documents on public interest disclosure are:

   1. Public Interest Disclosure Act 1994

   2. A guide to the Public Interest Disclosure Act 1994

   3. Public Interest Disclosure Leaflet

These documents are available on the CMD, Industrial Relations and Public Sector
Management website http://www.psm.act.gov.au/publications.htm.




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   5. ATTACHMENT - Some ethics case studies
The purpose of these case studies is to encourage participants, preferably in small
groups, to learn through discussing particular cases, even though they may be
hypothetical. It is suggested that participants each have a copy of the CMD
publication ACT Public Service: Code of ethics and that they be encourages to
identify which part of the code applies.

Case Study 1

As the newly arrived manager, an administrative clerk who works in the finance
section approaches you. The clerk tells you he has heard a rumour that the section is
to be investigated over an alleged significant misappropriation of cash funds and
accountable documents. The clerk offers to assist your investigation, by providing the
name of the perpetrators of the fraud, on condition that he receives an absolute
indemnification against disciplinary action for any part he may have played in the
fraud.

What should be your response?

Case Study 2

Three times in the same week, different staff members approach you "informally"
with allegations of unwelcome conduct by a named employee, who works for another
supervisor. The allegations are at the less serious end of the sexual harassment scale.

You raise the allegations, confidentially, with your supervisor who tells you that
unless you can produce evidence supporting the allegations, they should not be
considered further. There is a strong hint by your supervisor that you could face
disciplinary action for damaging workplace morale and team effectiveness.

What rights and interests am at issue in this case? What ethics principles are
involved?

What would you do, and why?

Case Study 3

You are asked to chair a selection committee, and one of the applicants is a friend of
yours. You regularly socialise with the applicant's spouse. You decide that this will
not influence your judgement in acting as Chair of the selection panel, and decide that
if anyone challenges you, you will stand aside from the final decision, but not the
selection process itself.

Is this a solution to an ethics problem for you? For anyone else?

Case Study 4

An officer responsible for awarding maintenance contracts awards a contract to the
company which has tendered the lowest price. This person happens to employ the
officer’s father. The officer did not mention this to anyone in the organisation, as he


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did not believe it was a conflict of interests. His father works in a middle-level
management job in the tendering company.

What would make this problematic? What would make it OK?

Case Study 5

A psychologist working for you presented a paper a conference on a questionnaire
tool she had developed for determining depression in adolescents. At your
suggestion, the Unit agreed to pay for her to attend. You know that she started work
on this project some years before coming to the Unit, and you have approved her
working on it in official time, using patients to validate the instrument. On her return,
she tells you that she was approached by the representative of a large American
company that commercially markets such products and has entered a lucrative
licensing agreement with the company. She says she has ‘finally hit the jackpot’ and
wants to take you out to dinner to celebrate.

Is there a problem with this?

Case Study 6

Because of budget cutbacks, it is clear that some services are going to have to be
curtailed. As part of a regular community consultation process, you attend a
community meeting dealing with alcohol and drug issues. When the information
about the cutbacks was given to you, it was made clear that the Minister had not made
a final decision and therefore the matter was confidential. At the meeting a citizen
asks you specifically to confirm or deny that services are to be cut back. You know a
Sixty Minutes camera crew is at the meeting doing a piece on alcohol and drug issues.

What do you say? Are there any ethical issues involved?

Case Study 7

Sara is a junior staff member in your organisation. You manage another work unit.
Sara comes to you and tells you that she is suffering victimisation at the hands of her
supervisor and co-workers. A number of anonymous public interest disclosures have
been made in relation to a string of losses of cash in her work area, and she believes
that the co-workers think the disclosures have been made by her.

You know that the disclosures are being investigated and are close to producing a
positive result. You also know that Sara is not the informant, but you do not know for
certain who is.

What, if anything, would you do in the circumstances?

Case Study 8

You overhear a conversation in the washroom, in which an employee claims to have
“got even” by making a sexual harassment allegation against their former supervisor.
The supervisor was dismissed last week. The conversation makes it clear that the
allegation was false.



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Would you disclose this situation? Why? Would this be a protected disclosure? Would
it be ethical?

Case Study 9

You discover that a close friend at work had for years forged financial records and
stolen tools and equipment from your employer.

What would you do? What should you do? What if your friend was about to retire?

Case Study 10

To avoid the hassle and expense of advertising a temporary position which is to be
filled for twelve months, a manager appoints a person who has been working in the
area as a consultant to the Department to the position for three months. The manager
tells the appointee that the arrangement may be continued “subject to satisfactory
performance”. The consultant has a reputation for being quite good at the work, and
is available immediately.

What are the issues here? What should be done?

Case Study 11

A middle-level manager repeatedly refuses to select employees from a particular
ethnic background for training and development opportunities because "those people
are nothing but trouble".

What is the problem here? What would your organisation expect you to do if you were
the manager’s supervisor? What if you were another subordinate?

Case Study 12

A manager repeatedly directs Ms X to act in a vacant higher-level position. Each
direction is for one month: this goes on for over a year. The vacant position is
eventually advertised and Ms X is appointed because the selection panel was
impressed by her "demonstrated ability to perform the duties of the position".

Is this fair? Is it ethical? Who loses out because of this arrangement? Who wins?
What does “the public interest" require?

Case Study 13

A supervisor repeatedly postpones the mid-year review of a subordinate's
performance agreement. The review eventually takes place in the tenth month of the
twelve-month cycle.

Is this an important problem? Why? Whose interests are at issue?




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