Clearhouse
5 Keys to Understanding and Addressing Workplace Retaliation
Publication Date: May 29, 2018

The Ethics & Compliance Initiative (ECI) empowers organizations to build and sustain high quality ethics and compliance programs.

An alarming trend is occurring in our workplaces; retaliatory behaviors are on the rise. According to the Global Business Ethics Survey (GBES), a longitudinal study of employees in for-profit organizations, rates of retaliation for reporting suspected wrongdoing have doubled over the past 3 years. Forty-four percent of employees who alerted management to a potential violation said that they experienced some form of retribution for having stepped forward.

Retaliation is very difficult for leaders to address; not for lack of desire or recognition of its importance. It is often not reported and therefore it quietly perpetuates, with victims sometimes experiencing ongoing punishment from management and peers. It can also be difficult to prove, with only circumstantial evidence to rely on, addressing the problem becomes even harder.

Despite the challenge, it is vital for an organization's long-term success that boards and senior leaders acknowledge and prioritize retaliation as a credible business risk.

There are 5 key insights that can help directors and executives better understand and address retaliation:

1.   Reporting and retaliation rise and fall together.

In part, the retaliation trend is the result of corporate investment in ethics and compliance (E&C) programs that encourage employees to recognize and report suspected wrongdoing. When an organization successfully implements an E&C program to encourage employees to report misconduct, they are often successful in creating "speak up cultures" with increases in reports by as much as 33%. However, along with that, they often see the employees who report being punished by their colleagues for coming forward. It is the difficult reality of E&C programs; the more employees attempt to report wrongdoing, the more likely it is that they will experience repercussions for having done so.

Twelve percent of employees who report wrongdoing only once say they experienced retribution. That number increases to almost 40% of employees who attempt to report three times. The likelihood that that those individuals will be retaliated against increases by another 50% if they try to come forward two times thereafter. Eighty percent of employees who try to report wrongdoing five or more times say they experience retaliation. This pattern is true globally. In working to mitigate retaliation in an organization, employees should feel assured in being able to report wrongdoing confidentially.

Another worrisome trend is that, in the past, reporting and retaliation have tended to rise and fall in similar amounts. However, over the past three years, reporting rose by 7% while retaliation rates increased 50%. It is difficult to say why this is the case. However, one possibility is that the majority of misconduct that was observed involved senior leaders. Generally speaking, wrongdoing that occurs at higher levels of an organization tends to be more serious in nature. The more power a violator has, and the more serious the alleged misconduct, the more likely it is that employees who report will experience reprisal.

2.   Most retaliation is social in nature.

Nearly 60% of employees who say that they have experienced retribution for reporting indicate that they were snubbed or shunned in subtle gestures, excluded from social situations, or overlooked in teaming environments. Nevertheless, half of employees say that they experienced verbal abuse by their supervisor or someone else in management, and almost 40% said that they almost lost their job.

3.   It doesn't matter whether the retribution really happened.

So long as an employee perceives that he/she has experienced retribution, the damage is done. Not only will that individual be unlikely to report the retaliation, the likelihood of their going outside the organization to report to a third party (such as an enforcement agency) is greatly increased. Furthermore, that individual is 65% less likely to come forward to report any other act of misconduct, should that take place. Therefore, it is important that management actively seeks out and manages perceptions of the reporting process.

4.   Acts of retaliation have a long-lasting and wide-reaching effect.

When retribution occurs, three new problems surface. A new form of misconduct has taken place (the retaliatory act); a new victim (the reporter) has been created; and the retaliatory act seeds an environment that is cancerous to the overall culture of the organization. Once it becomes known among other employees that retaliation occurs, there is a widespread silencing effect. Fifty-three percent of employees with first-hand knowledge of misconduct do not come forward out of fear that they will experience retribution for doing so. This fear of retribution then enables misconduct to become engrained in the culture of the organization. Therefore, tolerance of retaliation can be a leading indicator of future misconduct.

5.   Retaliation can be reduced and even eliminated.

The more an organization does to implement a high-quality ethics and compliance (E&C) program, the less retaliation occurs. While it may sound contradictory to the first insight in our list, the quality of the program makes a difference. While more than half of those who report misconduct say they experienced retaliation in companies without high quality E&C programs, only four percent say they have suffered from retaliation in companies with high quality programs. The same pattern is true for the extent to which misconduct occurs in the first place. That is because the higher the quality of the program, the stronger the culture in the organization. The stronger the culture, the less retaliation occurs.

To improve the quality of E&C efforts, boards and executives should shift from a narrow view of risk and compliance to a broader focus on culture and accountability. Message matters. Individuals are more likely to come forward to report wrongdoing if they believe that their report will make a difference; and they trust that they will be protected by management if they come forward. That is not a message of compliance. Boards should insist that management establish safe "speak up cultures" that emphasize a set of core values as the highest priority and the standard for all conduct. Management should also promote the availability of resources for those who observe wrongdoing; empower individuals to come forward; and clearly communicate that all individuals who engage in retaliation will be disciplined.

When it can be identified, retaliation is very difficult to prove in such a way that management can formally respond with legal or disciplinary action. Yet it is essential for leaders to find a way to address retaliation, for the sake of individual employees and the ongoing vitality of the organization.

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The Ethics & Compliance Initiative (ECI) is a best practice community of organizations that are committed to creating and sustaining high quality ethics & compliance programs. ECI provides independent research about workplace integrity, ethical standards, and compliance processes and practices in public and private institutions.


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