Tuesday, April 9, 2013

Ethics Hotlines

Ethics Hotlines
Kristin Clauw

Ethics policies are put into place in all companies to prevent behavior that can lead to white collar crimes. These actions can include fraud, bribery, harassment, discrimination, and theft. This list is definitely not exhaustive but it does include some of the most common issues Human Resources must handle. While every company has different needs when it comes to these types of policies it is becoming more and more common for ethics hotlines, or report channels, to be a standard. However, there is always a question of whether or not their benefits out way their possible downsides.  This query becomes even more important when the company is located outside the United States. Many times the answer falls not only into the hands of Human Resources but the employees as well.

Since companies like Enron have given light to such unethical corporations, directors, and employees it is becoming increasingly common for “whistle blowers” to be supported. Since 1990, Fortune 100 companies have increased their implementation of ethics hotlines from 6% up to 80% (Church, 2007). Creating this type of system for employees allows them to feel empowered, especially when their reports are followed through and used to correct behavior. This fosters a trusting environment between the employees and the hotline allowing for more honest and necessary reports. The key to doing this is for HR to promote the ethics policies and encourage respect. Once this has been done personnel will use the hotline to report situations internally instead of externally (Weaver, 2011). Along with stopping and diminishing the occurrence of ethical issues, this hindrance of company information being leaked to the public is a main reason these hotlines are put into place. If situations can be handled internally without having to make anything public knowledge it can save the company image and reputation. Depending on the issue at hand internal reporting can prevent lawsuits, loss of profits, loss of employees, and even termination of the company. 

When a situation results in reporting a co-worker or manager there is always some apprehension associated.  Probably the most common criticism of hotline is fear of retaliation from the “whistle blowers”. People are afraid that if they speak up they may lose their jobs, be denied a promotion, or be pushed out by co-workers (Church, 2007). Peer pressure is often one of the strongest motivators of people and this fear resonates from the school yard days of being called a tattle tale. Even still, it is understandable for employees to feel this way especially when ethics policies are not seen as entirely fair (Weaver, 2011).
Another issue arises with those that are not afraid to report. There are instances when workers choose to use the hotline unethically. For example, someone with a personal agenda of taking over a co-workers position, or simply wanting them gone, may call in accusing them of untrue or exaggerated actions. A question is then raised on whether the hotline serves a purpose or is only used by “snitches” or “whiners” (Church, 2007). One way to determine this would be by surveying employees. However, some companies struggle to get enough responses to make their efforts worthwhile (Church, 2007). Whether the cause is nostalgia, lack of education on the programs, or any other explanation without feedback there is not much a company can do to make changes. Therefore any current problems with the hotline or its efficiency are likely to remain. 

Cultural Limitations
In the United States ethics policies are required in every company and hotlines are “best practices”. However, this is most certainly not the case overseas. In some countries “whistle blowers” can face retaliation not only from co-workers or bosses but from the government as well. Places like Russia, India, the Middle East, Latin America, portions of Asia, and most of Africa fear this blowback so much they view these hotlines as a form of entrapment (Dowling, 2011). In addition to this inherent fear there are ever laws in place that prohibit “whistle blowing” activities or services (Dowling, 2011). The main reason for this extreme difference in policy is based on societal beliefs and practices. Not many nations have the privilege of freedom equivalent to that of the United States. While this imposes a barrier on many companies already or looking to become present overseas there have been moves to create some types of policies that satisfy both parties.  

In conclusion, there is a lot to consider when implementing an ethics hotline in any company. Their use is more widespread in larger more diverse businesses but is on the rise for smaller ones as well. Hotlines can provide a very useful tool for companies that wish to promote a high ethical vision. However, they must be taken seriously and employees should be thoroughly trained on their importance. This will hopefully diminish the amount of “whining” or “tattling” done on the lines and promote its use for the intended purpose. The tactic is used highly in the United States but overseas there is a lot of negative reaction. Many countries see this as a breach of privacy and have laws in place to prohibit it. However, American companies with expansions in other countries are slowly making the movement towards implementation. 

Church, A. H., Gallus, J. A., Desrosiers, E. I., & Waclawski, J. (2007). Speak-up all you whistle-blowers: An OD perspective on the impact of employee hotlines on organizational culture. Organization Development Journal, 25(4), P159-P167. Retrieved from http://search.proquest.com/docview/197994561?accountid=12924
Dowling, D. C., (2011). Global whistleblower hotline toolkit: How to launch and operate a legally-complaint international workplace report channel. International Lawyer, 45(4). Retrieved from http://go.galegroup.com/ps/i.do?action=interpret&id=GALE%7CA285532173&v=2.1&u=lom_oaklandu&it=r&p=LT&sw=w&authCount=1
Weaver, G. R., (2011). The role of human resources in ethics/compliance management: A fairness perspective. Human Resource Management Review, 11(1/2), P113. Retrieved from http://web.ebscohost.com/ehost/detail?sid=b17d76d5-c9f6-434c-8f38-a0c9b98efb53%40sessionmgr15&vid=1&hid=20&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bsh&AN=5201780

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