The new director of the Serious Fraud Office suggests introducing pay for whistleblowers, to speed up investigations.
But should HR introduce financial rewards for whistleblowers? And how could it work?
Pam Parkes, executive director of people and transformation, Essex County Council
Based on last year’s significant rise in whistleblowing claims, there does not appear to be a need to financially incentivise whistleblowers. The Lucy Letby case and the Post Office scandal shows that whistleblowers’ motivation to do the right thing is not financial.
The focus should be on the experience we want whistleblowers to have once they have made a claim, the credence is it given, how deftly it is managed and how well they are supported and protected during and after they have raised their head over the parapet. If I were in such a situation, this would be my main concern, alongside whether my intervention would make any difference at all to the current situation. Will the wrongdoing stop? And will the individuals or organisation be appropriately sanctioned once the investigation is over?
Read more: How to identify whistleblowing and protected disclosures
Rena Magdani, partner and head of employment, Freeths
One concern employers will have is defining what constitutes whistleblowing for these purposes. For example, what if someone raises an issue which turns out to be poor practice, rather than unlawful activity? It would be helpful for the company to know about the bad practice, but would it justify a financial reward? Financial rewards might also make people less likely to blow the whistle in cases where they have suspicions, but no concrete evidence, of wrongdoing.
Currently, to be protected by UK law, the whistleblower need only a reasonable belief in unlawful activity, which encourages whistleblowers to raise suspicion of wrongdoing. Any internal reward system is likely to have to include provisions making clear that rewards will not be paid for false disclosures. This may make employees nervous of whistleblowing if they do not have clear evidence, because of a fear of what might happen if their suspicion turns out to be wrong. Their concern will be that the employer might accuse them of making a false disclosure for financial gain.
Read more: Navigating the whistleblowing landscape
Roujin Ghamsari, CEO, Mappd HR
The essence of whistleblowing is anchored in protecting the public interest, and the courageous act of standing up for what is right. Introducing financial incentives risks altering this ethos, potentially shifting the focus from altruism to profit. While financial rewards might increase the number of reports, it could also complicate whistleblowers’ motivations, making it challenging to discern genuine concerns.
The crux of enhancing whistleblowing efficacy lies not in complicating the landscape with financial incentives but in simplifying the process of raising concerns. Organisations should demystify policies and procedures, making them accessible and understandable to all employees. Empowering individuals to identify and report genuine cases of wrongdoing effectively allows organisations to allocate resources and address issues with appropriate gravity.
Ultimately, any measure that contributes to preventing future misconduct and safeguarding the public interest is worth considering. But it must be approached with caution and a deep understanding of the broader implications.
Jonathan Lord, senior lecturer in human resources, Salford Business School
Financial rewards for whistleblowers may encourage employees to report unethical behaviour, fraud, or other violations of company policies. But it may introduce challenges and risks that need to be carefully managed.
The most important consideration for HR is to ensure that any financial reward for whistleblowers complies with relevant laws and regulations. HR should also develop clear policies and procedures outlining the criteria for eligibility, the process for reporting concerns, confidentiality protections, and the mechanism for determining and distributing rewards.
Communication and training will be vital in signalling the reward programme’s existence to employees. HR should establish fair and objective criteria for evaluating whistleblower reports and determining the appropriate reward, if any.
Organisations should also regularly monitor the effectiveness of their whistleblower reward programme and evaluate its impact.
This article was published in the March/April 2024 edition of HR magazine.
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