Organizational Justice: The Importance of Transparency

transparencyYou know a company’s culture is suffering when you hear the CEO or senior executives say the best way to develop a “Speak Up” culture is to just tell all the employees “we want to hear from you.” I am an advocate for simplicity but sometimes simplicity can slip into stupidity.

A “Speak Up” culture requires a commitment to a number of important principles and functions. Employees will report misconduct when they trust the company’s system. In order to earn the “trustworthy” badge, a system has to operate fairly and in a timely manner.

One important principle for a fair internal justice program is transparency. When employees see that a system is structured fairly with defined standards and procedures, they will gain comfort. A system that defines standards and procedures can gain credibility. In operation, of course, the justice system has to resolve cases in a timely manner and treat similarly situated cases the same. Additionally, the system must be perceived as treating whistleblowers fairly.

There are two key requirements for building a transparent system.transparency3

First, the company has to establish an oversight committee, consisting of key stakeholders, to manage the internal investigation system and dispense justice by ensuring consistency in the resolution of cases. Internal investigators should not resolve a case. Their job is to determine if the allegations are substantiated. If they are, the committee should decide on the punishment.
The committee can set out factors that it weighs when deciding cases – such as length of service at the company, egregiousness of the violation, prior violations, amount of money involved (if theft or other misconduct), impact on the company’s reputation, and other factors.

Second, the company should describe its internal investigation procedures so that everyone understands what rights they have and how the internal investigation function will operate. The description of procedures should be made available to everyone on an Intranet portal and publicized so that employees understand how a complaint is handled and the steps involved in the internal investigation.

One of the key areas to describe is how the company intends to treat complainants/whistleblowers, how much information will be disclosed to the complainant/whistleblower, and what remedies the complainant/whistleblower may have during and at the end of the process.

A transparent system, however, must not cross the line and improperly intrude on employees’ privacy rights. Here is where the issues can get very tricky.

One the one hand, companies may want to demonstrate they have a fair system that imposes discipline in appropriate cases by describing generally actions taken against employees. For example, the company may want to disclose that seven employees transparency2were terminated or suspended for theft of company property.

On the other hand, companies do not want to disclose information from which other employees can determine the offending employee’s identity.

A transparent system also should seek to publicize success stories – where the company heard from an employee and fixed a particular problem, especially if it improved the company’s operations. Publicizing and rewarding employees who help protect the company or promote the company can be a very effective way to give employees positive reinforcement for speaking up.

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