When using the free-cash flow model, cash flows are discounted at the weighted average cost of capital (WACC) and when using the dividend discount model, dividends are discounted at….
REPLY TO CLASSMATE POST DISCUSSION BOARD
Is it ethical to fire a “minimally competent” employee before their probationary period ends simply because they are only “minimally competent?” What ethical theory can be used to justify such a decision?
PLEASE EXPLAIN WHETHER YOU AGREE WITH MY CLASSMATE ANSWER TO THE ABOVE QUESTION AND WHY? (1 Page)
Terminating employment during the probationary period typically includes analyzing the employment situation through a number of different lenses. When applying ethical theory to the analysis you will find reason to take the terminating action and reasons to not take the terminating action.
Virtue Ethics: This theory references sense of personal character valuing integrity, honesty, courage, compassion, and coming from a place that is acting rightly. If you have a probationary employee with honesty concerns, potential conflicts of interest, or acting in a manner that provides as self serving within the probationary period you would find, under this theory, cause to terminate. While one wrong choice or poor decision is rarely grounds to end employment, these areas speak to a character, or lack thereof, base that is foundational to all decisions made by the employee going forward.
Utilitarianism: This theory is about the amount of happiness or unhappiness you create. In this instance, even though the probationary employee may be proficient in their selected role, if their presence or ancillary relationships cause greater concern throughout the organization then there may be cause for dismissal. This may end up more aptly described as a series of unfortunate events, but it may be more important for the organization to identify an individual who fits with the greater group rather than trying to explain an individual’s technical proficiency over poor fit on a personality base. A more common way this is phrased can be a Talented Terror. The individual is capable at his/her job, but is a “terror” in all other aspects regarding the team dynamic.
Contract Theory: Under this theory is where you might see individuals arguing the ethical nature of a termination of a minimally competent individual. This theory espouses that it is most ethical to abide by the contractual nature of relationships and to meet the contractual understanding of most social interactions/engagements. Theorists of this line of thought would argue that the probationary employee met the standards of the job and therefore should stay employed. There is an argument that if you wanted the individual to go above and beyond that standard, you as the administrator, should have raised and stated that expectation. They would likely argue that termination should only happen if someone performed below the competence standard.
In general the administrator has to be mindful of each ethical theory and apply the situation as their intuition and own conscience informs them. As each situation is very different and small nuances may sway an administrator in many different directions. It is important, though, that the administrator is aware of the different theories and how to apply them in this type of a situation.