1:

MGT 222

TERM PAPER

ON

WHISTLE BLOWING

-AN ETHICAL DILEMMA IN HRM

2:

Acknowledgement

3:

TABLE OF CONTENTS

S.no. Topic Page no.

1. Introduction 4

2. Whistleblowers 4

3. Whistleblowing as an ethical issue 5

4. Examples of whistleblowing 6

5. Role of HRM in whistleblowing 7

6. Advantaged of whistleblowing 9

7. Disadvantages of whistleblowing 9

8. Protection initiatives 10

9. Protecting whistleblowers in India 11

10.Zero tolerance 12

11.Conclusion 13

4:

12.References 14

Introduction

The term whistleblower derives from the practice of English police officers, who would

blow their whistles when they noticed the commission of a crime. The whistle would alert other

law enforcement officers and the general public of danger.

Whistleblowing can be defined as the attempt by an employee or former employee of an

organization to disclose what he or she believes to be wrongdoing in or by the organization.

Whistleblowers

A whistleblower is a person who raises a concern about wrongdoing occurring

in an organization or body of people. Usually this person would be from that same

organization.

Whistleblower can be:

5:

Internal whistleblowers , who report misconduct on a fellow employee or superior within

their company. One of the most interesting questions with respect to internal

whistleblowers is why and under what circumstances people will either act on the spot to

stop illegal and otherwise unacceptable behavior or report it. There is some reason to

believe that people are more likely to take action with respect to unacceptable behavior,

within an organization, if there are complaint systems that offer not just options dictated

by the planning and control organization, but a choice of options for individuals,

including an option that offers near absolute confidentiality.

External whistleblowers , however, report misconduct on outside persons or entities. In

these cases, depending on the information's severity and nature, whistleblowers may

report the misconduct to lawyers, the media, law enforcement or watchdog agencies, or

other local, state, or federal agencies. In some cases, external whistleblowing is

encouraged by offering monetary reward.

Whistleblowing as an ethical issue

6:

Whistleblowing entails an ethical dilemma as the individual considering becoming a

whistleblower is torn between two competing loyalties:

loyalty to the corporation and

Loyalty to society or the law or some higher morality.

One problem is that whistleblowers nearly always experience retaliation, ranging from being

fired to being vilified. Society recognizes that there is a need for whistleblowing, the need

to expose corruption and wrongdoing, and legal structures have been developed to encourage and

protect the whistleblower, showing that society recognizes this as a socially valuable act.

Inherent in any discussion of the matter is a comparison and conflict of responsibilities--both the

employer and the employee have responsibilities to themselves, the organization, and society, as

well as to each other. The whistleblower in a sense challenges this relationship by accusing the

employer of having abrogated his or her responsibility, and the employer in turn claims that the

employee is doing precisely that by revealing confidential matters, true or not. The law says that

revealing the truth is socially valuable and that both parties have a responsibility to do so, while

revealing false information on either side is to be punished. Freedom and responsibility here go

hand in hand.

Examples of whisteblowing:

The Telgi scam in Maharashtra is the latest instance of whistleblowing in the state. The

whistleblower, in all probability a high-ranking police officer, remains anonymous, but

7:

his act leaking out the crucial Subodh Jaiswal report to the media triggered a series events

that culminated in the arrest of former Mumbai police chief R.S.Sharma. 

Frank Serpico  is the legendary ex-cop of the New York Police Department (NYPD)

whose story was the subject of a best-selling book, and a film starring Al Pacino — both

titled `Serpico.' When he became a cop in 1960, payoffs, kickbacks and protection

rackets were rampant in NYPD. Refusing to look the other way, Serpico complained to

the Police Commissioner and the Mayor, but they ignored him. Frustrated, Serpico

revealed NYPD's dirty laundry to theNew York Times in 1971, after which the cops as

well as the criminals started gunning for him! Matters came to a head when he was shot

in the face during a raid; his colleagues did not come to his help. Serpico quit NYPD in

1972 but NYPD has become a more honest force since his time.

Jeffrey Wigand  is the one-time head of R&D of America's third largest tobacco

company, Brown & Williamson. In a 1995 interview to "60 minutes," he spoke about the

company's knowledge of nicotine's addictive properties, its reckless use of harmful

additives, it’s quashing of research on safe cigarettes, and a variety of other abuses. He

was the central witness in the U.S. government's lawsuit against the tobacco, which

eventually led to the $246 billion federal tobacco settlement. The story of his

whistleblowing and subsequent harassment was made into a critically acclaimed movie,

`The Insider,' starring Russell Crowe.

8:

Role of HRM in whistle blowing

HR is considered a neutral department in organizations and can play a critical role in hearing

the voice of employees.

For HR, setting up channels and other mechanisms that not only allow but also promote

healthy, open communication will be important for setting up an employee friendly

culture.

Training which explicitly states the ethics policy in organizations and the means that

employees can take to handle issues of corruption in organizations will be relevant.

Assigning accountability officers and providing special telephone numbers and e-mail

accounts encourage employees to bring out issues and will help in maintaining

anonymity.

Meindertsma, an expert in whistle blowing litigation suggests that it is important for

organizations:

to formulate a zero tolerance policy

9:

should be ready to respond quickly

encourage employees in bringing forth issues

understand the legal implications and

provide training to managers and supervisors regarding whistle blowing

Independent and neutral provision for reporting may be critical. Setting up a clear value system

in the organization which is implied in recruitment, training, performance appraisal etc would

help to develop and sustain an open, honest culture.

As employees or former employees, it is important to make sure that certain aspects are

taken into consideration before whistle blowing:

Whistle blowers should confirm whether the practice followed in the organization will

cause harm to an individual or the general public if uncorrected

Make sure that the facts in hand are reliable and not mere rumors

Be fairly certain that by bringing the matter before an outside group the problem can be

corrected and harm avoided.

10:

Weigh the personal risks that are to be encountered if the choice is made to be a whistle

blower (quite often this will be the critical factor which makes the process difficult.

However, this will help to deal with the future problems in a much easier way).

Law can become handy for the whistle blowers in some cases. Support from the law can help

prevent sufferings of whistle blowers

Advantages of whistle blowing

There is exposure of wrongdoing and corruption in the organization.

Genuine whistleblower can get some reward for complaining like bonuses, promotions,

incentives etc

This leads to benefits of the company e.g. the wrong usage of resources by corrupted

person is minimized and now these resources can be used in a productive manner.

Disadvantages of whistleblowing

If a whistle blower continues to talk to people about the wrong doing of someone, then

the whole office environment gets affected. Even in society this could lead to common

people taking some extreme measures to control the wrong doing.

Also, the claims of whistle blowers are not always genuine and sometimes a person may

be doing it for their selfish reasons. However, a lot of people get dragged into it

unnecessarily. Especially in health care industry, whistle blowing causes severe problems

to the industry and the industry has to deal with false claims and law suits.

A whistle blower lawsuit can cost a company millions of dollars and sometimes it may

have been spent unnecessarily. By the time the company tries to prove its innocence or

justify the case, they would have already spent thousands of dollars dealing with the case.

Only the lawyers get to make the money in the bargain.

11:

Protection initiatives

The U.S. Whistleblowers Protect Act of 1989 (amended in 1994) protects public interest

disclosures by federal employees. An Office of Special Counsel (OSC) was created to aid

whistleblowers in the investigation of their disclosures and prevention of retaliatory

action against them. It has had only modest success due to a series of hostile judicial

rulings undercutting the protection afforded by the Act. More than 40 States have passed

similar or even stronger legislation in respect of State employees.

After the spectacular collapse of Enron and WorldCom, U.S. Congress passed the

Sarbanes-Oxley Act of 2002 granting sweeping legal protection to whistleblowers in

publicly traded companies. Anyone retaliating against a corporate whistleblower can now

be imprisoned for up to 10 years. The Department of Labour (DoL) is required to

complete its adjudication of whistleblower cases within 180 days, failing which the

whistleblower may either elect to stay with DoL or seek a de novo trial in court.

Remedies include reinstatement, back pay with interest, compensatory damages, special

damages, attorney fees and costs.

The U.K.'s Public Interest Disclosure Act of 1998 is a unique piece of legislation

providing protection to employees in the public, private and non-profit sectors, including

those working outside the U.K. Under the law, employment tribunals have power to

`freeze' a dismissal and make unlimited compensation awards.

South Africa has followed the U.K. example in providing protection to employees of all

organisations through its Protected Disclosures Act of 2000.

A number of countries such as Australia, Canada, South Korea, Argentina, Russia,

Slovakia, Mexico and Nigeria have enacted or are in the process of enacting

whistleblowers protection legislation (but only to government employees).

12:

Protecting whistleblowers in India

In India, till now there is no whistleblower protection act.

Together with the Freedom of Information Act (which received Presidential assent on

January 19, 2003), it can be a potent tool for promoting good governance in the country.

What we lack at the moment are public interest groups like the Government

Accountability Project and the National Whistleblower Centre in the U.S., and the Public

Concern At Work in the U.K., to lobby for whistleblowers' rights and defend employees

against retaliation.

With the consent of the required number of State governments, Parliament should try to

enact a single Act for all employees working in any tier of government, and also for

employees working in any form of organisation in the private and voluntary sectors.

Employees of contractors, sub-contractors and agents of an organisation; applicants for

employment, former employees and overseas employees; attorneys and auditors should

also be covered.

The Official Secrets Act should be overridden to provide for a public interest defence

and the `gagging clauses' in employment or severance contracts should be declared void

in respect of public interest disclosures.

13:

What constitute `public interest disclosures' need to be clearly defined. In my opinion,

the protection should apply to specific disclosures only involving an illegality,

criminality, breach of regulatory law, miscarriage of justice, danger to public health or

safety and damage to environment, including attempts to cover up such malpractices.

The whistleblower must reasonably believe that his information about a malpractice is

substantially true, and must act in good faith. Those caught making anonymous or

pseudonymous leaks should not be protected. The period of limitation for filing a

complaint must be sufficiently long (say, 1 year).

The Act must encourage employees to raise the matter internally in the first instance and

mandate organisations to establish suitable mechanisms for this purpose. Where it is not

reasonable to raise the matter internally, or where attempts to remedy the matter from the

inside have been unsuccessful, employees who make an external disclosure in a specified

way should also be protected. What should be the `specified way' is a matter of debate. In

my opinion, apart from certain `designated offices' (such as SEBI, Pollution Control

Boards, etc.), public interest disclosures to MPs and MLAs; employee unions and

associations; and reputed public interest groups must be protected.

Zero tolerance

As things stand today in India, the chances of enacting such legislation may seem remote.

But whistleblower protection measures are gathering a momentum of their own around the

world, aided partly by spectacular government and corporate scandals. It is just a question of

time before we shift from our present culture of zero tolerance of whistleblowing to a culture of

zero tolerance of whistleblower retaliation.

14:

Conclusion

The guts and high moral responsibility of whistle blowers shows that whistle blowers can

play a vital role in fighting loose ethics and slack corporate governance. Ironically, they have to

undergo insult and injury in form of job loss, ridiculing, retaliation and boycott. However an

important aspect here would be the tolerance of the society towards corruption and unfair

practices. In the Indian context it is of high importance that organizations takes a serious view of

instilling high sense of ethics and laws are formulated to protect the employees who play the role

of whistle blowers against corruption both in the private and public sector.

15:

References

http://www.hroutsourcingconnection.com/2010/01/28/whistleblower-protection-rules/

http://www.humanrightsinitiative.org/programs/ai/rti/news/whistleblowing_law.htm

http://en.wikipedia.org/wiki/Whistleblower

http://www.hindu.com/thehindu/op/2003/03/25/stories/2003032500110200.htm

http:// www. whistleblowing .org/  

http://www.besr.org/Article.aspx?ArticleID=441

http:// www. mightystudents. com/ essay/ Whistle. Blowing. impact. 21236

http://timesofindia.indiatimes.com/city/mumbai/Blowing-the-whistle-blowing-their-

cover/articleshow/357294.cms