It's been a long time since I had to report to anyone at work other than my customers or a Board of Directors. But not so long that I couldn't remember being asked to fetch coffee, pick up a birthday gift for the wife, have my suggestions mocked (instead of politely declined), or simply ignored. I'm fairly thick-skinned, and that type of treatment most often inspired a wait-until-I'm-rich-and-you're-still-working-here internal response. But when I witnessed this behavior happening to others, and ultimately to my children, my response was much more emotional.
What does it mean to honor an employee's dignity? For starters, it means remembering that you are not doing them a favor. The employer/employee exchange is one of parity - one works, the other pays money. These exchanges need to be in balance for dignity to be a possibility.
Second, it means that the employer takes seriously his responsibility to train, guide, and communicate. People don't come into any new job automatically knowing how things work. Even the same job in a different company can be radically different than your version of that job. To bring a new employee on and then doom her to failure due to lack of structure, expectations, or instruction is to undermine her dignity.
Its a bit too easy, when you're the boss, to forget that there are often many ways to arrive at a particular destination. It's your responsibility to honestly identify which paths are nonnegotiable and which have some flexibility of approach. To deny others the right to think any way but your way is to discount their value - and therefore their dignity.
Unfortunately, many business owners believe that the absence of profanity or yelling means they have created a dignified workplace, but some of the most demeaning behavior I have ever witnessed was done with a smile and polite language. To respect someone's dignity is to respect his essential equality, his inherent value, and his full potential to not only contribute, but to teach you something as well. To create a workplace imbued with dignity, we must endeavor to be genuinely dignified ourselves.