A recent report on whistleblowing in the workplace is an eye-opener. Titled “Inside the Mind of a Whistleblower,” the study attempts to determine why certain employees will and others will not report activities they perceived to be misconduct. Most of the report focuses on factors influencing employees to report misconduct, and how they do it. But aAnother interesting observation relates to the identification of misconduct. Many employees did not recognize certain actions as misconduct, so naturally they never thought to report it.
The first major factor depends on whether the employee felt that the report would make a difference. If the employee believed that no one would listen or care, then he or she was less likely to take action. Therefore, according to the study’s findings, managers report at a higher rate, increasingly so as they move up the ladder.
The second factor is the employee’s sense that the employer would retaliate for the report. Employees who felt more financially secure and who believe that they will not suffer retaliation are more likely to report misconduct. Interestingly, though, the employee’s confidence in the company’s financial health makes a difference.
The third influence is the whistleblower’s level of support both within and outside of the job. Not only does this affect an employee’s confidence in doing the right thing, but also is likely to make the employee understand the best place to report. Most workers would rather report to a supervisor, if they had a good relationship, than to an anonymous tipline. This is true, of course, only if the employee regards the supervisor as an ethical person.
The report counsels that employees do not prefer to report externally, despite the available “bounties” from such sources as Dodd-Frank Act, and the IRS tip line, which is a weak motivator. Companies without an ethics hotline or some anonymous way to report misconduct are more likely to have report of their misconduct reach the outside world.
The biggest conclusion from this report seems to be that the corporate culture is critical. A workplace that is perceived to be healthy, interested in what its employees have to say, and likely to make changes when needed will find its employees speaking up. Companies that exact retribution, or which ignore reports of wrongdoing, are more likely to find themselves the subject of some outside investigation.
Employers ignoring reports of wrongdoing not only do the companies a disservice, but also lose certain defenses for charges of discrimination. For example, an employer is not liable for the hostile work environment caused by sexual harassment unless it knows about the situation. An employer fielding and ignoring reports creates a multi-faceted problem. This leads to loss of morale, loss of valuable personnel, and often the loss of a lawsuit. Other losses caused by the ostrich syndrome can include ignoring reports of theft, bribery, environmental violations, and revealing insider information.