Using the Three Risks Strategy to Analyze Legal Risks in Human Resource Management

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Reality of Lawsuits
Dealing with Lawsuits
Reducing Damages
Conclusion
References

Compliance and litigation are common aspects of human resource management. In the article “Will Your Workers Sue You?: State-by-State Risks and Strategic Responses”, Posthuma (2012) presents some of the legal dilemmas that frequently occur in workplaces. The article touches on legal cases and lawsuits that directly involve human resource management.

In this paper, the author reflects on the various arguments presented by Posthuma (2012) from the context of course readings. To this end, the author applies the three risks dimension developed in the case study to analyze loss and exposure in human resource management with regards to litigations.

Reality of Lawsuits

Posthuma (2012) guides practitioners on the actions to take when dealing with lawsuits. The first step entails identifying and assessing factors that trigger employment liability losses. The lawsuits in reference are categorized according to their severity, frequency, and range.

Frequency

Frequency deals with the number of losses (Posthuma, 2012). High frequency lawsuits occur mainly as a result of racial diversity. African Americans sue more frequently for racial discrimination compared to other individuals. It is mainly because they are underrepresented in most organizations.

When individuals in one group believe they are treated unfairly, the likelihood of an employment lawsuit increases. However, this argument may appear biased. The reason is that even individuals from other racial groups sue their employers (Phillips & Gully, 2013). Unemployment is another cause of lawsuits. Many unemployed individuals are competing for the few available job opportunities (Phillips & Gully, 2013). Consequently, more lawsuits against human resource managers arise.

Range

Range deals with the breadth or variety of risks (Posthuma, 2012). Discrimination, right to work, and state OSHA plans are some of the common lawsuits facing human resource managers. A number of federal laws deal with the employer-employee relationship. Breaching these laws can result in lawsuits against the human resource management department (Phillips & Gully, 2013).

Severity

Severity deals with the amount of money at stake (Posthuma, 2012). One may assume that this aspect has no connection to human resource management. However, the truth is that hiring often leads to endless lawsuits. In cases where the jury is easily persuaded, the severity of the losses to the organization may be significant (Posthuma, 2012).

Dealing with Lawsuits

After identifying the level and potential of threat associated with different types of lawsuits, the next step is to find an effective way to manage the risks posed. Most of the actions are meant to shield the employer from damages (Posthuma, 2012). In human resource management, losses arising from lawsuits can be avoided in a number of ways.

First, complying with anti-discrimination laws can avert litigations. High severity lawsuits can be managed by taking up liability insurance covers. Other efforts that can be made to manage risks of litigation in human resource management involve familiarity with rules and regulations established by the Department of Labor, maintaining consistent employee policies, and effective documentation (Phillips & Gully, 2013).

Reducing Damages

In spite of efforts made by employers to avoid lawsuits, significant losses may still arise from court battles (Posthuma, 2012). Posthuma (2012) suggests ways of mitigating the damage caused by such lawsuits. The solutions provided in the case study are applicable and relevant to human resource management.

For instance, managers can pay the defense fees and fines incurred over a period of time. The practice is especially common where large amounts of money are involved. Cutting losses is also an important strategy. For instance, managers can settle for less expensive alternatives, such as mediation and arbitration (Posthuma, 2012).

Conclusion

The three risks technique highlighted in the case study can be used to deal with litigation issues in human resource management. Grouping lawsuits into the three categories allows managers to deal with the risks efficiently. Finally, human resource professionals should understand the legal issues facing them. As a result, they can effectively deal with the associated challenges.

References

Phillips, J., & Gully, S. (2013). Human resource management. New York: Cengage Learning.

Posthuma, R. (2012). Will your workers sue you?: State-by-state risks and strategic responses. Business Horizons, 55(1), 65-79

Click Here To Order Now!