March 25, 2011 SHRM Poll: Organizational Whistle-blowing—Reporting Unethical and Illegal Behavior in the Workplace.

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Presentation transcript:

March 25, 2011 SHRM Poll: Organizational Whistle-blowing—Reporting Unethical and Illegal Behavior in the Workplace

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Key Findings How do organizations inform employees about how to report unethical and/or illegal behavior? The top two methods that organizations use to let their employees know how to report unethical and/or illegal behavior are the employee handbook/company intranet (85%) and new- employee orientation (70%). What channels do organizations use for reporting unethical and/or illegal behavior? Among organizations that encourage specific methods for reporting questionable behavior, the vast majority encourage employees to contact HR (85%). The next two most frequently offered channels for reporting unethical and/or illegal behavior are contacting the reporting employee’s direct supervisor (65%) and contacting other senior management (53%). About two out of five organizations (41%) offer an ethics hotline as a channel for reporting unethical and/or illegal behavior within the organization. How do organizations respond to reports of unethical and/or illegal behavior? More than four out of five organizations (83%) indicated that all reported allegations are investigated, and 17% indicated that reported allegations are investigated on a case-by-case basis. Who investigates reports of unethical behavior or illegal activity? The largest percentage of respondents indicated that HR investigates reported unethical behavior (89%) and illegal activity (86%). The next most often cited responsibility for investigating reported unethical behavior and illegal activity is senior management (53% and 56%, respectively). 2

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM How does your organization generally inform employees about how to report unethical and/or illegal behavior in your organization? Note: n = 356. Percentages do not total 100% due to multiple response options. Excludes responses of “N/A, my organization does not currently have a formal communication method regarding this type of reporting." ”During employee training" and “in policies in addition to employee handbook documentation" were recoded from write-in responses for "other."

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 How does your organization generally inform employees about how to report unethical and/or illegal behavior in your organization? Differences Based on Organization’s Operations Location Differences Based on Union Status Differences Based on Organization Staff Size Differences Based on Organization Sector In the employee handbook or on company intranet Nonunion 87%) > union (70%) During new-employee orientation Multinational operations (77%) > U.S.-based operations only (66%) 2,500 to 24,999 employees (82%) > 1 to 99 employees (53%) Through posters or brochures displayed in staff areas Multinational operations (42%) > U.S.-based operations only (26%) Union (42%) > nonunion (28%) 2,500 to 24,999 employees (48%) > 1 to 99 employees (12%), 100 to 499 employees (17%) 25,000 or more employees (74%) > 1 to 99 employees (12%), 100 to 499 employees (17%), 500 to 2,499 employees (31%) Publicly owned for-profit (56%) > privately owned for-profit (23%), nonprofit (24%), government (25%) In communications (e.g., written, , verbal) from the organization’s CEO, president or owner Multinational operations (33%) > U.S.-based operations only (17%) Union (34%) > nonunion (21%) 2,500 to 24,999 employees (32%) > 100 to 499 employees (13%) 25,000 or more employees (56%) > 1 to 99 employees (14%), 100 to 499 employees (13%), 500 to 2,499 employees (21%) 4 Comparison by Selected Organizational Demographics Note: Blank cells indicate that there were no significant differences in this category.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 How does your organization generally inform employees about how to report unethical and/or illegal behavior in your organization? Differences Based on Organization’s Operations Location Differences Based on Union Status Differences Based on Organization Staff Size Differences Based on Organization Sector In communications (e.g., written, , verbal) from the organization’s ethics officer, compliance officer, audit function or organizational ombudsman Multinational operations (32%) > U.S.-based operations only (15%) Union (38%) > nonunion (17%) 2,500 to 24,999 employees (43%) > 1 to 99 employees (8%), 100 to 499 employees (12%), 500 to 2,499 employees (17%) 25,000 or more employees (37%) > 1 to 99 employees (8%), 100 to 499 employees (12%) In communications (e.g., written, , verbal) from direct supervisors 25,000 or more employees (37%) > 1 to 99 employees (9%), 500 to 2,499 employees (12%) In communications (e.g., written, , verbal) from the organization’s legal counsel Multinational operations (16%) > U.S.-based operations only (1%) Union (12%) > nonunion (5%) 2,500 to 24,999 employees (12%) > 100 to 499 employees (1%) 25,000 or more employees (22%) > 1 to 99 employees (2%), 100 to 499 employees (1%) 5 Comparison by Selected Organizational Demographics (continued) Note: Blank cells indicate that there were no significant differences in this category.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM What methods does your organization encourage employees to use when reporting unethical and/or illegal behavior in your organization? Note: n = 361. Percentages do not total 100% due to multiple response options. Excludes responses of “N/A, there are no specific methods that employees are encouraged to use to report unethical or illegal behavior.”

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 What methods does your organization encourage employees to use when reporting unethical and/or illegal behavior in your organization? Using the organization’s ethics hotline (by staff size): In general, the larger the organization staff size, the more likely organizations are to encourage the use of the organization’s ethics hotline. Larger organizations (those with 2,500 or more employees) were more likely than smaller organizations (those with 2,499 or fewer employees) to report that they encourage employees to contact the organization’s ethics hotline. Contacting the organization’s ethics officer, compliance officer, audit function or organizational ombudsman (by staff size): Larger organizations (those with 2,500 or more employees) were more likely than smaller organizations (those with 1 to 99 employees) to report that they encourage employees to contact the organization’s ethics officer, compliance officer, audit function or organizational ombudsman to report unethical and’/or illegal behavior. 7 Comparison by Organization Staff Size Smaller OrganizationsLarger OrganizationsDifferences Based on Organization Staff Size 1 to 99 employees (2%) 100 to 499 employees (23%) 500 to 2,499 employees (49%) 2,500 to 24,999 employees (79%) 25,000 or more employees (89%) Larger organizations > smaller organizations Smaller OrganizationsLarger OrganizationsDifferences Based on Organization Staff Size 1 to 99 employees (12%)2,500 to 24,999 employees (52%) 25,000 or more employees (48%) Larger organizations > smaller organizations

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 What methods does your organization encourage employees to use when reporting unethical and/or illegal behavior in your organization? Contacting the organization’s legal counsel (by staff size): Larger organizations (those with 2,500 to 24,999 employees) were more likely than smaller organizations (1 to 99 employees) to report that they that they encourage employees to contact the organization’s legal counsel. 8 Comparison by Organization Staff Size (continued) Smaller OrganizationsLarger OrganizationsDifferences Based on Organization Staff Size 1 to 99 employees (5%)2,500 to 24,999 employees (26%) Larger organizations > smaller organizations

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 What methods does your organization encourage employees to use when reporting unethical and/or illegal behavior in your organization? Differences Based on Organization’s Operations Location Differences Based on Union Status Differences Based on Organization Sector Using the organization’s ethics hotline Multinational operations (65%) > U.S.-based operations only (31%) Contacting the organization’s ethics officer, compliance officer, audit function or organizational ombudsman Union (50%) > nonunion (28%) Contacting the organization’s legal counsel Multinational operations (25%) > U.S.-based operations only (9%) Publicly owned for-profit (26%) > nonprofit (7%) 9 Comparison by Selected Organizational Demographics Note: Blank cells indicate that there were no significant differences in this category.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Generally, how does or would your organization respond to reports of unethical and/or illegal behavior in your organization? 10 Note: n = 358. Excludes responses of “not sure/don’t know.”

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Generally, how does or would your organization respond to reports of unethical and/or illegal behavior in your organization? Differences Based on Union Status Differences Based on Organization Staff Size All reported allegations are investigated (formally or informally), regardless of type of infraction, credibility of allegation, availability of resources, etc. Nonunion (90%) > union (80%) 2,500 to 24,999 employees (95%) > 100 to 499 employees (74%) Reported allegations are investigated (formally or informally) on a case-by-case basis, depending on the nature of the allegation (e.g., type of infraction, seriousness of allegation, credibility of allegation, etc.) Union (20%)> nonunion (10%) 100 to 499 employees (26%) > 2,500 to 24,999 employees (5%) 11 Comparison by Selected Organizational Demographics Note: Blank cells indicate that there were no significant differences in this category.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM Generally, who investigates (or would investigate) reports of unethical and/or illegal behavior in your organization? Note: Percentages do not total 100% due to multiple response options.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Generally, who investigates (or would investigate) reports of unethical behavior in your organization? Differences Based on Organization’s Operations Location Differences Based on Union Status Differences Based on Organization Staff Size Differences Based on Organization Sector Senior management U.S.-based operations only (57%) > multinational operations (41%) The organization’s legal counsel Multinational operations (41%) > U.S.-based operations only (29%) The organization’s ethics officer Multinational operations (28%) > U.S.-based operations only (8%) Union (27%) > nonunion (12%) 500 to 2,499 employees (13%) > 1 to 99 employees (1%) 2,500 to 24,999 employees (26%) > 1 to 99 employees (1%), 100 to 499 employees (8%) 25,000 or more employees (37%) > 1 to 99 employees (1%), 100 to 499 employees (8%) Publicly owned for-profit (29%) > privately owned for profit (9%) The organization’s compliance officer 2,500 to 24,999 employees (32%) > 1 to 99 employees (8%) 25,000 or more employees (37%) > 1 to 99 employees (8%) The organizational ombudsman Multinational operations (6%) > U.S.-based operations only (1%) Publicly owned for-profit (7%) > privately owned for profit (1%) 13 Unethical Behavior: Comparison by Selected Organizational Demographics Note: Blank cells indicate that there were no significant differences in this category.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Generally, who investigates (or would investigate) reports of unethical behavior in your organization? Differences Based on Organization’s Operations Location Differences Based on Union Status Differences Based on Organization Staff Size Differences Based on Organization Sector The organization’s audit function Union (18%) > nonunion (9%) Law enforcement Publicly owned for-profit (7%) > privately owned for profit (1%) 14 Unethical Behavior: Comparison by Selected Organizational Demographics (continued) Note: Blank cells indicate that there were no significant differences in this category.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Generally, who investigates (or would investigate) reports of illegal behavior in your organization? Differences Based on Organization’s Operations Location Differences Based on Union Status Differences Based on Organization Staff Size Differences Based on Organization Sector Senior management U.S.-based operations only (60%) > multinational operations (46%) 1 to 99 employees (73%) > 500 to 2,499 employees (47%), 2,500 to 24,999 employees (39%) The organization’s legal counsel Multinational operations (63%) > U.S.-based operations only (42%) 2,500 to 24,999 employees (64%) > 1 to 99 employees (30%) 25,000 or more employees (63%) > 1 to 99 employees (30%) The organization’s ethics officer Multinational operations (26%) > U.S.-based operations only (8%) Union (28%) > nonunion (10%) 2,500 to 24,999 employees (21%) > 1 to 99 employees (3%) 25,000 or more employees (33%) > 1 to 99 employees (3%), 100 to 499 employees (9%), 500 to 2,499 employees (9%) Publicly owned for-profit (24%) > privately owned for profit (9%) The organization’s compliance officer 2,500 to 24,999 employees (30%) > 1 to 99 employees (9%) 25,000 or more employees (41%) > 1 to 99 employees (9%) The organizational ombudsman Multinational operations (5%) > U.S.-based operations only (1%) Publicly owned for-profit (21%), government (23%) > privately owned for profit (8%) 15 Illegal Behavior: Comparison by Selected Organizational Demographics Note: Blank cells indicate that there were no significant differences in this category.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Generally, who investigates (or would investigate) reports of illegal behavior in your organization? Differences Based on Organization’s Operations Location Differences Based on Union Status Differences Based on Organization Staff Size Differences Based on Organization Sector Law enforcement Union (42%) > nonunion (27%) 500 to 2,499 employees (13%) > 100 to 499 employees (1%) 25,000 or more employees (19%) > 100 to 499 employees (1%) Government (51%) > privately owned for profit (24%) 16 Illegal Behavior: Comparison by Selected Organizational Demographics (continued) Note: Blank cells indicate that there were no significant differences in this category.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Does (or would) your organization award financial incentives (e.g., spot awards, bonuses) to employees who report unethical and/or illegal behavior in your organization? 17 Note: n = 336. Excludes responses of “not sure.”

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 During the past 12 months, have you personally observed misconduct that you thought violated your organization’s ethics standards, company policy or the law? 18 Note: n = 372. Excludes responses of “not sure.”

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Has your organization implemented policy and procedural changes related to whistle-blowing on unethical and/or illegal behavior in the past 12 months or is it planning to in the next 12 months? 19 Note: n = 321. Excludes responses of “not sure.” Percentages do not total 100% due to rounding.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Differences Based on Organization’s Operations Location Differences Based on Organization Staff Size Yes, we have already implemented policy and procedural changes Multinational operations (49%) > U.S.-based operations only (35%) 2,500 to 24,999 employees (52%) > 100 to 499 employees (27%) 25,000 or more employees (65%) > 1 to 99 employees (29%), 100 to 499 employees (27%) No, we have no plans to implement policy and procedural changes 100 to 499 employees (67%) > 500 to 2,499 employees (44%) 20 Comparison by Selected Organizational Demographics Note: Blank cells indicate that there were no significant differences in this category. Has your organization implemented policy and procedural changes related to whistle-blowing on unethical and/or illegal behavior in the past 12 months or is it planning to in the next 12 months?

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Demographics: Organization Industry Industry Manufacturing—other14% Health care, social assistance (e.g., nursing homes, EAP providers)12% Services—professional, scientific, technical, legal, engineering10% Financial services (e.g., banking)8% Educational services/education7% Government/public administration—federal, state/local, tribal6% Retail/wholesale trade6% Other services (e.g., nonprofit, church/religious organizations)4% Transportation, warehousing (e.g., distribution)4% 21 Note: n = 374. Percentages do not total 100% due to rounding.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Demographics: Organization Industry (continued) Industry Insurance3% High-tech3% Construction, mining, oil and gas2% Consulting2% Publishing, broadcasting, other media2% Manufacturing—auto/auto-related2% Real estate, rental, leasing2% Services—accommodation, food and drinking places2% Utilities2% Arts, entertainment, recreation1% Association—professional/trade1% Biotech1% Telecommunications1% Pharmaceutical1% Other5% 22 Note: n = 374. Percentages do not total 100% due to rounding.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Demographics: Organization Sector 23 Note: n = 352. Excludes “other” organization sectors.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Demographics: Organization Staff Size 24 Note: n = 349. Percentages do not total 100% due to rounding.

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 Demographics: Other 25 Note: n = 384 U.S.-based operations70% Multinational operations30% Single-unit company: A company in which the location and the company are one and the same. 30% Multi-unit company: A company that has more than one location. 70% Multi-unit headquarters determines HR policies and practices 54% Each work location determines HR policies and practices 1% A combination of both the work location and the multi-unit headquarters determine HR policies and practices 45% Is your organization a single-unit company or a multi-unit company? Are HR policies and practices determined by the multi-unit corporate headquarters, by each work location or both? Does organization have U.S.-based operations (business units) only or does it operate multinationally? Note: n = 385 Note: n = % of organizations indicated that employees at their work location were unionized. Note: n = 374

Organizational Whistle-blowing - Reporting Unethical and Illegal Behavior in the Workplace | ©SHRM 2011 SHRM Poll: Organizational Whistle-blowing—Reporting Unethical and Illegal Behavior in the Workplace Response rate = 15% Sample comprises 390 HR professionals randomly selected from SHRM’s membership. Margin of error is +/- 5% Survey fielded January 6-14, Methodology For more poll findings, visit: Follow us on Twitter: