The Ethics Resource Center has just released a report from its 2009 National Business Ethics Survey. The report, called "Retaliation: The Cost to Your Company and Its Employees," documents how companies that tolerate retaliation suffer increased levels of employee misconduct. The report documents how the employees’ mere perception of retaliation is sufficient to deter reporting of misconduct.  It is also an indicator of the level of actual misconduct. The report finds that 15% of employees who report misconduct experience retaliation. The rate is higher for union members (21%) and those in firms of 100 to 500 employees (also 21%, an increase from 14% in 2007). If employees feel "extreme pressure" to compromise standards, then they report retaliation at a rate of 59%.

Of those reporting retaliation, most experienced exclusion from decisions and work activity (62%), a cold shoulder (60%), and verbal abuse by a supervisor or manager (55%). The survey reports that 48% say they almost lost their job, 43% say they lost promotions or raises, 18% were demoted, and 4% experienced physical harm to person or property. The survey included only respondents who are currently employed — a methodology that might cause underreporting of discharges as a form of retaliation.

The ERC study associated retaliation with the ethical culture of the employer.  Retaliation is much more common in organizations that have a weak ethical culture. If management tolerates retaliation, employee trust levels drop markedly. Employee engagement and commitment to the organization drops from 78% to 38% when employees experience retaliation for reporting misconduct. Among all employees who reported misconduct (including those who experienced retaliation and those who did not), engagement is 66%.

The ERC makes the following recommendations:

  • Examine and, as needed, revise systems of procedural justice to make sure that reports are handled appropriately and that reporters feel heard, respected and protected.
  • If your company has not done so already, develop a non-retaliation policy. Make sure that it is communicated broadly, included in your code and addressed in all-employee and management-level training and enforced when situations arise.
  • Sanitize cases that have been reported and use them as case studies so reporters know that their decision to report made a difference.
  • Be mindful of groups that are more likely to feel retaliated against. Take extra steps to make sure that these employees are safeguarded from punishment for reporting and, just as importantly, that they do not feel vulnerable to retaliation.
  • Train everyone who is likely to receive reports—especially supervisors—to follow-up with reporters in an appropriate manner and to be mindful of how unrelated actions might be misinterpreted by an employee who is feeling uncertain and exposed after deciding to report.
  • Encourage managers at all levels to communicate that retaliation is unacceptable and to back it up with action.

SAI Global sponsored the survey. Ann Wootton, President and General Manager of SAI Global Compliance Americas, told the Examiner, “This report demonstrates just how toxic the fear of retaliation can be in an organization.” She adds, “Companies that make zero tolerance their goal are doing their employees and themselves a big favor. Retaliation brings a lot of baggage with it that can truly damage an enterprise.”

Patricia J. Harned, president of the Ethics Resource Center. told the Examiner, “ERC’s research shows workplace retaliation for what it is – a destructive attitude-killer. The best antidote is a company-wide ethical culture where employees feel that reporting is not only tolerated but welcome. And surveys are the best way to assess what’s on employees’ minds.”