Don’t fear whistle-blowers

Janet Wiscombe

With HR’s help, principled whistle- blowers can be a company’s salvation. Here is how several organizations encourage a culture where bad news can be heard and acted on before it’s too late (continuation from the last issue).

Developing an honest, open culture

There has been a trend in the past decade among large employers to create departments that specifically deal with ethical matters. A 1999 study conducted by accounting professor Curtis Verschoor at DePaul University found that among 300 large public companies, the firms that made an explicit commitment to follow an ethics code provided more than twice the value to shareholders in comparison to companies that did not.

Sears, Roebuck and Co. established an ethics program in 1994 to deal with standards and conduct, and to develop effective lines of communication for receiving candid information from employees, known as “associates.” At Sears’ headquarters in Chicago, Gael Hanauer, director of associate services/ethics, serves as company ombudsman. The corporation has several programs related to ethics, including an annual 70-question survey titled “My Opinion Counts.” Sample questions include “Do you believe unethical issues are tolerated or not tolerated here?” and “Do you know how to report an ethical issue?”

The survey was developed as a way for employees to report problems without fear of reprisal, Hanauer says. Like many other companies, particularly large corporations, Sears also offers anonymous help lines to its 330,000 employees. “Questions come up about how to interpret company policy, how an employee wasn’t treated fairly, what to do about an associate who is misusing a discount, or mis-ringing the register, or how Joe backed up a truck to a loading dock and a TV disappeared,” she says.

Last year, 17,000 calls were made to one of Sears’ two assist lines. About 11,000 were directed to an associate-relations line that is staffed by an HR manager and five associates, all of whom are trained in negotiation, conflict resolution, and investigation. There are also 18 HR consultants specifically trained to handle ethical problems such as theft, fraud, and violence. Their responsibilities include listening to callers, documenting cases, and helping to launch investigations.

To be continued in the next issue of UNS.