CHAMPAIGN, Ill. - A gut-level connection with workers may be the key to encouraging whistle-blowing that could chip away at an estimated $652 billion lost to fraud annually by U.S. businesses, an ongoing University of Illinois study suggests.
Though largely overlooked, tapping into employees' emotions and personal values can produce powerful triggers for calling out wrongdoing in the workplace, from petty theft to embezzlement and sexual misconduct, U. of I. researchers say.
"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," said Abhijeet Vadera, a graduate student who is studying the issue along with business professor Ruth V. Aguilera and former U. of I. professor Brianna Caza.
Past studies are fuzzy on why employees blow the whistle, exploring factors such as age, gender and time on the job, but providing inconsistent results, according to a report by the Illinois researchers that will appear in Business Ethics Quarterly.
They followed up that study with a survey of workers at an Indian manufacturing plant, which they say provides insight that could guide employers seeking to build a culture that encourages workers to report wrongdoing.
In the survey, 40 percent of respondents said they witnessed wrongdoing on the job. Half failed to report it, citing reasons such as doubt that management would act or fears of retaliation, including losing their jobs.
But for the half who blew the whistle, emotions trumped even the possible loss of income, said Vadera, who interviewed workers at the 1,500-employee cement manufacturing plant.
"When I interviewed whistle-blowers, almost all of them cried during the interview," Vadera said. "The survey showed that people mostly blow the whistle because they are absolutely angry over something that they feel is unfair or unjust."
Aguilera says companies can help breed a moral compass and emotional response to wrongdoing through regular, extensive training sessions that detail right vs. wrong - from stealing pens to misappropriating funds - and the consequences.
"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," she said. "Knowing the implications can bring their moral identity and emotions to the forefront, making them more likely to blow the whistle."
Those trainings sessions also build a connection between workers and the company that can encourage whistle blowing, said Aguilera, a fellow at the U. of I. Center for Professional Responsibility in Business and Society.
"If I care deeply about my company, I'm more inclined to defend it and blow the whistle on wrongdoing," she said. "If my job is just a paycheck, I'm more inclined to just say 'whatever' if I see something wrong."
No ethics policy or compliance program will convince every employee to report wrongdoing, Aguilera said. But she says the timing is ripe to ramp up whistle-blower programs, based on studies that show employee outrage is mounting amid corporate misconduct that fueled the nation's deepest recession in decades.
"Everybody has a different definition of right and wrong, but most people like to look at themselves in the mirror and think they are doing good things," she said.
Vadera says connecting with workers' emotions and personal identity has to be done in concert with a company ethics policy that clearly outlines how to report abuses, and then follows through.
Aguilera says most ethics policies are little more than "window dressing" to comply with federal law. Nearly 90 percent of ethics guidelines are common among Fortune 500 firms, even though every company has its own unique circumstances and culture.
"Training programs and capitalizing on emotions are only effective if you have a good system in place," Vadera said. "If you don't have a good system, what's the use of encouraging people to report wrongdoing?"