Don't Pay the Whistle Blower (even if he gets you to the other side)

The Ethics Institute of South Africa recently challenged members to reflect critically on the topic of financial incentives for whistle-blowing. It's an approach raised by the South African Public Protector in her reference to bounty rules as a possible weapon against corruption. Opposing views are held by regulators around the world. Whatever the best practice in public ethics or in the public-private interface, in the employer-employee context it is a concept that raises significant concerns for in-house ethics officers.

If we analyse the sources of motivation for whistle-blowers in the "un-incentivised" workplace, we confront the prospect that the introduction of financial reward will deter rather than encourage whistle-blowing.  Worse, such a system can deter the majority of potential whistle-blowers and sow suspicion and conflict that renders teams dysfunctional.    

Outrage and anguish, but seldom avarice, drive whistle-blowing 

Ask in-house practitioners hearing confidential disclosures or hotline operators receiving anonymous reports for a broad-brush view and they are likely to tell you that employees reporting genuine wrong-doing in the workplace are typically motivated by one of a few emotions. Featuring strongly amongst these emotions are either outrage or anguish.  

Propelled by outrage, the first group are largely driven by indignation. Compelled by anguish, the second group unburden themselves when the mental pressure of the knowledge they hold becomes unbearable. Comparatively rarely, one experiences a whistle-blower who is seemingly without an underlying emotional driver, one with a barely-disguised or explicit goal of achieving some form of reward.

Propelled by outrage

Outrage, coming from a sense of righteous indignation, is what compels some whistle-blowers to report perceived wrong-doing when an activity or behaviour that they are not party to offends their moral code.  Surprisingly often though, it is outrage driven by perceived unfairness on the part of those with a direct or indirect personal interest that drives a significant percentage of valuable whistle-blowing.  A sense of injustice, a perception of unfairness and even feelings of jealousy rather than simple rectitude fuel many of these reports. 

Sometimes the whistle-blower will have been turning a blind eye or been complicit to a point, as with an employee willing to "pay" one chicken to her supervisor for a weekend's worth of overtime but who blows the whistle when he crosses a line by increasing the "fee" to two chickens.  Similarly, the employee living in company housing who reports a colleague for running an illegal bottle store from her quarters - only when his line of credit is cut. Or the man who reports a supervisor for trading light duty for sexual favours and explains that he is motivated by the unfairness of the "opportunity" presented to his female colleagues and not by concern for their comparative vulnerability.    

While this category of whistle-blower may not conform to some ideal of a courageous and conscience-driven innocent, the insights they offer prove just as valuable to an organisation wishing to maintain a strongly ethical internal environment.  It's also very likely that the introduction of financial incentives will interrupt and deter their instinct to blow the whistle: the indignation that gives this whistle-blower the sense of holding a "moral high ground" does not easily co-exist with the prospect of becoming, what is in effect, a paid informant.     

Compelled by anguish

The whistle-blower who probably best fits our stereotypic image of an employee "doing the right thing" typically exhibits more emotion than this rather rational-sounding catch phrase implies.  In fact, it is often despite strong ambivalence and when the anguish that is keeping them awake at night becomes overwhelming that they come forward and unburden themselves of their information.

These employees have listened to their conscience and understand the fact that as an employee they have a duty of care to their employer.  Having wrestled with their fear of being victimised or exposed and alienated with all the loss that would follow, these employees feel compelled to share their information with those in authority.

They often report experiencing extreme levels of anxiety and one may observe sweating, trembling, nausea and the like amongst otherwise empowered and well-educated employees with little objective reason to feel fearful. The relief and calm that replaces their anxiety as they release their information burdens can be immediately apparent.

The ethical conscience and care for the sustainability of the organisation on the part of these employees triumphs over fear and ambivalence. Often, it is a belief in the responsibility of the individual to the greater good that these employees hold on to as they embark on their disclosure journey.  Introducing a financial incentive to whistle-blowing is as incompatible with reporting for this group of employees as it is for those in the "outraged" group.  They are doing the right thing for the right reason, and are less likely to do the right thing for the wrong reason.     

Driven by avarice

While the majority of reports tend to be made by those who are outraged or experiencing anguish, very occasionally the information being offered comes from an employee seeking a trade - their information for your good favour and their improved fortunes.

It's not only when you clarify that no reward will be forthcoming that disappointment ensues - even schemes with explicit rewards on offer can fail to deliver on a whistle-blower's expectations. In other contexts where rewards are offered for information, such as police investigations, the likelihood that disappointment and even dispute will replace the dollar signs in the informant's eyes is well anticipated. This is because there is seldom a simple cause-effect relationship to be found between the reporting of information and the successful conclusion of an investigation.  It is inevitable that the party seeking reward will attach a premium to their role in what may be an unpredictable process involving a number of individuals, initiatives and multiple sources of information.  

Whistle Blowers South Africa's Reg Horne points out that one must make the important distinction between a genuine whistle-blower and a paid informant. Horne cautions that when offering employees the prospect of reward, we need to anticipate the likely undesirable consequences of what can become a perverse incentive.  It seems that the only uncertainty will be the lengths that some may go to in their effort to acquire or create "sellable" information. 

Deterrence, disappointment, deviousness and disruption - the dangers of incentivised whistle-blowing in the workplace

If we want employees to report genuine wrong-doing in the workplace and you are prepared to go along with my broad-brush categorisation of the emotions underlying a large percentage of whistle-blowing, it is important to consider the possibility that the introduction of a reward incentive will deter the majority of whistle blowers. This is because the predominant emotions of righteous outrage or of anguish arising from a heart-felt sense of duty are, by definition, incompatible with the prospect of being seen as a paid informant.

Even those for whom a financial reward is synchronous with their motivation may suffer disillusionment, given the challenges devising a system that caters for the multitude of eventualities that tend to play out during a single investigation. And amongst them will be those who find the lure of a reward so attractive that they will resort to undesirable methods to obtain or create information for sale.       

To add to the undesirable possibilities of deterrence and disappointment that an incentivised whistle-blowing system may introduce, the potential disruption of healthy workplace relationships should be a major source of concern for organisation behaviour specialists. An atmosphere of suspicion and mistrust may be engendered that will work against teamwork and that at worst could threaten the physical safety of individuals in the team.  

But if you must

If you remain unconvinced and really want to reward a whistle-blower, apply the concept of ad-hoc "now-that" recognition rather than the systematised "if -then" rewards concept that Daniel Pink so compelling distinguishes between when discussing remuneration and reward in his book "Drive - The Surprising Truth about What Motivates People".

To the full extent possible, keep the reward confidential and preferably at arm’s length.  Public recognition of the whistle-blower is likely to be met with ambivalence at best, and at worst can result in social isolation and physical harm.  These are not outcomes that we desire within organisations where performance is dependent upon collaboration and mutual trust, and in which the physical safety of our employees is paramount.

Promoting whistle-blowing without financial incentives

The challenge remains. If there is wrong-doing taking place in an organisation that is not detected or detectable by internal controls, we need employees in the know to bring this to the employer's attention.  The many excellent institutions promoting ethics offer evidence-based best-practice guidelines for those wishing to create organisation climates that promote the reporting of wrong-doing by employees.

If the perspective in this post fits with your views on organisational ethics, look out for a follow-up on the workplace practices that will increase the likelihood of whistle-blowing using the "propelled by outrage and compelled by anguish" conceptualisation.  

Penny writes in her personal capacity as a contribution to her profession and not for profit.