Successful compliance programs typically take place in organizations with examples coming from the top. There is no doubt about the fundamental factor for success in such programs: top management engagement, or a culture of example. There is no way for a compliance program to prosper otherwise.
The issue then is how to engage the rest of the organization, since activities and actions therein are not the exclusive responsibility of top management.
Some organizations focus on disciplinary measures, intending to make it clear that, should an employee deliberately transgress a company policy, they will suffer a corresponding sanction proportional to their action. It seems that the mandatory nature of compliance with rules, associated with a set of disciplinary measures in cases of non-compliance, are the most appropriate measure to force compliance by employees.
However, the issue is much more complex than it seems. Organizations that fit this description often have unexpected problems, especially in the face of increased pressure for results on their employees. Complying with standards, which should be seen as something positive, becomes “a thorn in the side”, an obstacle to results which needs to be circumvented at the first opportunity, as what counts at the end of the day is the achievement of goals.
In companies with the culture of punishment above, the prevailing discourse in Human Resources is that doing the right thing is the standard behavior expected from every employee, thus should not be awarded. This could not be more wrong.
Employees are human beings, not machines. Alongside rationality is emotional intelligence, and nothing motivates a human being more than recognition. Furthermore, there is nothing better than promoting recognition for those doing the right something and contributing to the solidification of the organization's ethical culture.
The promotion of internal recognition to those acting correctly does not imply in the extinction of disciplinary measures to those equally deserving them. However, not recognizing compliant employees makes compliance culture look like “friendly fire”, thus jeopardizing the achievement of goals defined for the employee.
On April 22, 2022, the Wall Street Journal wrote a piece on a 2-day event organized by the Practising Law Institute in New York. The event focused on the Foreign Corrupt Practices Act (FCPA), and there was a consensus by the part of the speakers regarding the following rationale:
“THE INCENTIVES EMPLOYEES ARE GIVEN WITHIN THEIR ORGANIZATION TO BE ETHICAL AND FULLY COMPLY WITH U.S. LAWS PLAY A CRUCIAL ROLE IN ESTABLISHING THE RIGHT CULTURE.”
This conclusion is perfect! Efficient compliance programs combine disciplinary measures with a plan for recognition, according to the employee's attitude.
The issue is what's the most appropriate method to implement this plan for recognition.
Some actions come to mind:
1. Establishing an adequate budget to recognize good conduct by employees.
2. Providing objectives or performance indicators as criteria of achievement of goals and good conduct.
3. Working on internal communication so as to inform the team of the good conduct of their members.
4. Highlighting, with due prominence and immediacy, the recognition of any relevant good conduct, which serves as an example for other employees.
5. Identifying, by means of risk assessment, employees in positions that are more prone to pressure from tough business goals, which may deviate their behavior, and implementing preventive measures to mitigate such risks.
In addition to all the above, recognition will help employees see compliance with the rules as a bonus instead of a burden; both for themselves and the business, thus preventing risks that could impact the company either financially or by tarnishing its reputation.