May 19 2010 - Research from the University of Illinois published in Business Ethics Quarterly found that connecting with employees' emotions and personal value systems could encourage whistle-blowing in relation to to a range of work-related crimes and misconduct. Researchers point out that fraud alone is estimated to cost U.S. businesses US$ 652 billion annually.
Graduate student Abhijeet Vadera said:
"It's very difficult to encourage people to blow the whistle if you ignore the role of emotions and personal identity, which most company policies do at this point."
Researchers comment that previous studies have proved inconclusive about the motivations of whistle-blowers and found no consistency in characteristics such as age, gender and length of employment.
The current study surveyed employees of a large cement-manufacturing plant in India, of whom 40 per cent said they had witnessed wrongdoing in the workplace. Half failed to report it, citing reasons such as lack of confidence that management would act or fears of retaliation, including losing their jobs. However, emotional reactions were a strong factor for those who did speak out.
Abhijeet Vadera explained:
"When I interviewed whistle-blowers, almost all of them cried during the interview. The survey showed that people mostly blow the whistle because they are absolutely angry over something that they feel is unfair or unjust."
Researchers conclude that organisations can encourage an active moral response to wrongdoing through regular training sessions examining a range of right and wrong behaviors and their consequences for individuals and the company itself.
Ruth Aguilera, professor of business, commented:
"Employers need to explain that wrongdoing can cause an Enron-type scandal that could sink the company, or eat into the revenue that covers payroll and raises. Knowing the implications can bring their moral identity and emotions to the forefront, making them more likely to blow the whistle."
This approach can also facilitate identification with the organisation and employee loyalty, especially in the economic downturn.
Ruth Aguilera continued:
"If I care deeply about my company, I'm more inclined to defend it and blow the whistle on wrongdoing. If my job is just a paycheck, I'm more inclined to just say 'whatever' if I see something wrong."
The researchers argue that this approach should be adopted in conjunction with a company ethics policy that incorporates guidelines for whistle-blowers and commits the organisation to acting on the information received. They suggest that the majority of current policies are designed merely to comply with U.S. Federal law. Those adopted by Fortune 500 firms tend to confirm to a pattern and fail to reflect the distinctive qualities of the different organisations.
Abhijeet Vadera concluded:
"Training programs and capitalizing on emotions are only effective if you have a good system in place. If you don't have a good system, what's the use of encouraging people to report wrongdoing?"