Articles On November 27, the president signed the Whistleblower Protection Enhancement Act Source: Issues in Science and

Technology. 29.2 (Winter 2013): p25. From Academic OneFile. Document Type: Brief article

Full Text: COPYRIGHT 2013 National Academy of Sciences http://www.issues.org Full Text: * On November 27, the president signed the Whistleblower Protection Enhancement Act, which protects government employees from retaliation when disclosing evidence of gross mismanagement, gross waste of funds, or abuse of authority within the government. Of interest to the research community, the legislation includes language that protects against censorship related to research, including efforts "to distort, misrepresent, or suppress research, analysis, or technical information." * An effort to pass cybersecurity legislation failed, after Republican leaders objected because Senate Majority Leader Harry Reid (D-NV) would not allow an open amendment process. The Senate also failed to pass cybersecurity legislation in August. At that time, Republicans were concerned that mandatory security standards in the bill would put unnecessary burdens on the private sector. Source Citation (MLA 7th Edition) "On November 27, the president signed the Whistleblower Protection Enhancement Act." Issues in Science and Technology 29.2 (2013): 25. Academic OneFile. Web. 19 Mar. 2013. Document URL http://go.galegroup.com/ps/i.do?id=GALE%7CA319229564&v=2.1&u=cclc_trade&it=r&p=GPS&sw=w

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Title: Retaliation for whistleblowing is on the rise Author(s): Curtis C. Verschoor Source: Strategic Finance. 94.5 (Nov. 2012): p13. From Academic OneFile. Document Type: Article Full Text: COPYRIGHT 2012 Institute of Management Accountants http://www.imanet.org Full Text: Many favorable outcomes have resulted from the courageous actions of whistleblowers. Examples include the disclosures revealing the efforts of tobacco companies to get smokers hooked on nicotine, UBS's massive efforts to help U.S. taxpayers evade federal income taxes, and drug giant Pfizer's illegal marketing efforts that resulted in $2.3 billion of criminal and civil penalties. Unfortunately, those blowing the whistle on such events are likely to face the painful cost of retaliation. The provisions of the Dodd-Frank Act that were enacted to encourage whistleblowers and protect them from retaliation are still being adjudicated in the court system. One recent case is Kramer v. Trans-Lux Corp., Case No. 3:11-cv-01424-SRU (D. Conn. September 25, 2012). The result was encouraging for whistleblowers. The U.S. District Court for Connecticut held that a whistleblower may pursue claims under the Sarbanes-Oxley Act (SOX) as well as Dodd-Frank. The court also ruled that a whistleblower doesn't have to report a tip to the SEC in the manner prescribed by the SEC in order to qualify as a whistleblower under Dodd-Frank. Instead, the individual only must allege that he or she had a reasonable belief that the information relates to a possible violation of securities laws. Though the courts continue to address the Dodd-Frank provisions, a report issued September 4, 2012, by the Ethics Resource Center (ERC) highlights the need for greater protection for whistleblowers. Titled Retaliation: When Whistleblowers Become Victims, the report details the practices of reporting illegal and unethical conduct in U.S. companies. Retaliation analyzes data obtained in the 2011 National Business Ethics Survey (NBES), conducted before the protections of Dodd-Frank became effective. The NBES survey interviewed U.S. employees at all levels working at least 20 hours per week in the for-profit sector. Data was weighted for gender, age, and education. (The NBES study was covered in the April 2012 column, "New Survey of Workplace Ethics Shows Surprising Results.") Retaliation analyzes data obtained in the 2011 National Business Ethics Survey (NBES), conducted before the protections of Dodd-Frank became effective. The NBES survey interviewed U.S. employees at all levels working at least 20 hours per week in the for-profit sector. Data was weighted for gender, age, and education. (The NBES study was covered in the April 2012 column, "New Survey of Workplace Ethics Shows Surprising Results.") According to ERC's Retaliation report, retaliation against work-place whistleblowers is now extending to previously safe groups such as senior managers and is involving more acts of physical violence. "Addressing workplace retaliation should be a high priority for business leaders," ERC President Patricia J. Harned said. "When an employee experiences retaliation for reporting misconduct, companies have two new problems. A second form of misconduct has been observed, and the reporter is now a victim. Additionally, retaliation can create an environment that is cancerous to the organization."

The rate of retaliation against whistleblowers is increasing far more quickly than the rate of people reporting misdoing. Since 2007, the rate of reporting misconduct, or whistleblowing, has increased from 58% of those who observe improper behavior to 65%. Of the reporting group, the rate of employees experiencing retaliation increased from 12% in 2007 to 22% in 2011. Among the unfavorable side effects of retaliation is the dampening of motivation for future whistleblowers and the increased risk that unreported wrongdoing will continue and expand because management has no opportunity to take corrective action. Perhaps the most surprising findings set forth in Retaliation involve the striking increases in specific types of retaliatory acts--particularly those related to managerial employees. In the past two years alone, traceable retaliation (those that leave proof of having happened, such as physical harm, online harassment, harassment at home, job shift, demotion, or cuts to hours or pay) increased from 4% of those who experienced retaliation to 31%, managerial demotions increased from 18% to 32%, and relocations or reassignments increased from 27% to 44%. This is the first time in the history of the ERC's studies of ethics that supervisory and managerial employees are now more likely to experience retaliation after whistle-blowing. In addition, retaliation among union employees (another group with higher job security) increased dramatically in the past two years. Retaliation rates for union members were 25 percentage points higher (42%) than the rate for nonunion employees (17%). Employees who feel comfortable enough to first report misconduct to their supervisor experience far less retaliation (17%) than those who first report to higher management (27%) or to their organization's hotline (40%). Possible explanations for this disparity are that (1) more significant violations would be reported to higher executives directly so that they could take immediate corrective action or (2) the reporter's supervisor may have some involvement with the situation. The severity of the wrongdoing also may be a factor here. Logically, more significant violations are more likely to result in retaliation. If the action being reported is serious enough that the reporting would be escalated above a supervisor or done through a hotline, it's also more likely that there would be retaliation for reporting that action. But in organizations with an open culture, speaking up to benefit the firm in the long run is more likely to be accepted. The ERC report also shows a direct link between increased retaliation and job pressures or stress. Fifty-two percent of people who report wrongdoing and feel pressure to compromise standards also end up experiencing retaliation. But only 12% of those who didn't feel such pressures experience retaliation. This suggests that an open and ethically strong culture encourages whistleblowing, while an unethical culture is more likely to result in employees "going along to get along." The ERC study measures critical aspects of ethical culture, including management's trustworthiness, whether managers at all levels talk about ethics and model appropriate behavior, and the extent to which employees value and sup-port ethical conduct, accountability, and transparency. Openness and the willingness to report misbehavior for the good of the organization is a positive outcome. The best news in Retaliation is that ethics and compliance pro-grams, strong ethical cultures, high standards of accountability that are applied consistently, and positive management behaviors are all linked to a reduced likelihood of retaliation. Though the rate of retaliation increased in stronger ethical cultures, that rate (15%) was still lower than the retaliation rate in ethically weak cultures, which increased to 27% from 24%. In addition, retaliation is lower in organizations with comprehensive ethics and compliance programs (2% of reporters) than it is in companies that lack all of the standard program elements (36%).

Using other measurements, retaliation is far less likely when employees agree that management is accountable. Managers also have the power to curb retaliation. When they are perceived as trustworthy and committed to ethics, retaliation is far less likely. Some of the measures of accountability include: * Trust supervisor to keep promises and commitments, * Trust top management to keep promises and commitments, and * Trust coworkers to keep promises and commitments. Retaliation includes additional recommendations from the ERC for organizations that want to reduce the likelihood of the damaging effects of retaliation for whistleblowers. They include: * Assess the views of the organization regarding whistleblowing and the protection of those who come forward with concerns about actions they have observed. * Target managers with anti-retaliation training so they can recognize reporting, address the issues if possible, and interact with reporters in ways that aren't perceived as retaliatory. * Communicate the reporting process broadly among all employees so they can feel reassured that progress is being made and are aware of the protections for those that do the reporting. * Move investigations along and provide information as to the status of the issue so that reporters will feel they are being heard and won't need to bring up the same issues multiple times. * Take steps to ensure that retaliation doesn't happen--show that fairness and consistency are the norms in the organization. * Implement systems and procedures that ensure confidentiality. * When a claim of retaliation is substantiated, take action in a way that is both decisive and, if possible, visible to employees. * Track progress and periodically check up on reporters. In view of the motivations for whistleblowing contained in Dodd-Frank--and the Act's greater protection against retaliation--the subject of whistleblowing and its influence in helping to establish and maintain a strong ethical culture within an organization deserves immediate attention and is likely to remain important for many years to come.

A report from the ERC shows that retaliation against whistleblowers is increasing. While provisions in the Dodd-Frank Act strengthen the protection of whistleblowers, companies can still do more to strengthen their ethical culture and encourage employees to report misconduct. Curts C. Verschoor, CMA, Editor Curtis C. Verschoor is the Emeritus Ledger & Quill Research Professor, School of Accountancy and MIS, and an honorary Senior Wicklander Research Fellow in the Institute for Business and Professional Ethics, both at DePaul University, Chicago. He was selected by Trust Across America as one of North America's Top Thought Leaders in Trust-worthy Business Behavior-2012. His e-mail address is curtisverschoor@sbcglobal.net. Verschoor, Curtis C. Source Citation (MLA 7th Edition) Verschoor, Curtis C. "Retaliation for whistleblowing is on the rise." Strategic Finance Nov. 2012: 13+. Academic OneFile. Web. 19 Mar. 2013. Document URL http://go.galegroup.com/ps/i.do?id=GALE%7CA309735343&v=2.1&u=cclc_trade&it=r&p=GPS&sw=w

Gale Document Number: GALE|A309735343 Top of page Can ethics education improve ethical judgment? An empirical study Author(s): Peggy A. Cloninger and T.T. Seivarajan Source: SAM Advanced Management Journal. 75.4 (Autumn 2010): p4. From Academic OneFile. Document Type: Report Full Text: COPYRIGHT 2010 Society for the Advancement of Management http://islander.tamucc.edu/~cobweb/sam/ Full Text: Ethics scandals and corrupt practices can ruin a business. Can good judgment and ethical decision-making be taught in business schools? While these schools are now trying to incorporate ethics education, few studies have examined the effectiveness of such courses. This study focuses on the influence of successful outcomes on perceptions of ethical behavior. Is a successful person more likely to be considered ethical, regardless of other factors? A statistical analysis of responses from 175 people who were working and also pursuing master's degrees in business supported the hypothesis that a comprehensive course with an ethical focus mitigated bias in judging the ethical standing of others. ********** Ethical behavior has interested business researchers for decades (e.g., Akaah and Lund, 1994), but recent ethical scandals in major organizations worldwide (e.g., WorldCom, Adelphia, Parmalat, WIPRO, Sanlu Group) have brought business school curricula under intense scrutiny. Masters of

business administration programs have been subject to criticism for failing to develop critical competencies such as decision-making (Rubin and Dierdorff, 2009) and for fostering amoral theories based on opportunistic behavior and lack of trust (Ghoshal, 2005). Business organizations and society alike are demanding that business schools examine their curricula and work toward graduating managers who will perform their jobs in an ethical manner. The primary accrediting organization for business schools has responded to this demand and has indicated that schools should ensure that all students understand the symbiotic relationship between business and society (AACSB International, 2004). Business students themselves also are interested in having classes explore issues related to corporate social responsibility (Net Impact, 2006). Many of the 2009 graduates of the Harvard Business School took a voluntary student-led pledge to "serve the greater good" (Wayne, 2009). Yet, the effectiveness of education to improve ethical judgment and performance remains in doubt. Many suggest that a business school course is unlikely to make students more ethical decision-makers (Giacalone and Thompson, 2008). However, the differences in the day-to-day ethical judgments of those who have completed required courses covering ethics are not well understood. Much research in ethics has tended to be either prescriptive or focused on surveys regarding perceptions or opinions of ethical performance. Empirical research has often been correlational and exploratory (Tenbrunsel and Smith-Crowe, 2008). Theoretical work has consisted primarily of developing models that propose various personal and organizational variables as the determinants of ethical behavior (Akaah and Lund, 1994). It has been argued that the influence of organizational context is often unrecognized and unappreciated by researchers (e.g., Johns, 2006). Yet, relatively little research has examined whether or not completing a course on ethical decision-making can reduce organizational influences and improve ethical judgment and performance. Our research addresses this gap in the literature. In particular, this study examines whether or not ethics education reduces the influence of performance outcomes and results in improved ethical judgment. Performance outcome, that is, whether or not an employee is considered successful or unsuccessful on the job, has been found to bias ethical judgments (e.g., Selvarajan and Cloninger, 2009). Those considered successful have been judged to behave more ethically than those deemed unsuccessful. In other words, employees' performance levels have been found to influence judgments of whether they are ethical or not. Furthermore, the respondent's personal beliefs do not affect this finding. That is, the evidence suggests that organizational influences (e.g., job performance levels), can override respondents' personal ethical systems. Since personal ethics are developed over a lifetime, this finding raises the question of whether or not ethics education can help students improve their ethical reasoning skills sufficiently so that their ethical judgments overcome the influence of job performance levels. Specifically, this research tests if a single comprehensive course that includes substantial attention to ethics can accomplish this task. Or simply put, can ethics education reduce job performance outcome bias? This research is important for theory and practice. From a practical perspective, job performance appraisals are used by most organizations to improve job performance. Yet job outcomes (performance levels achieved by employees) have been shown to bias the ethical judgments. In particular, employees who receive positive appraisals are judged to be more ethical than employees who receive negative appraisals. If ethics education reduces bias and improves ethical judgment, implications for businesses seeking to hire ethical managers are significant. From a theoretical perspective, this research is important because it systematically examines whether or not ethics education can mitigate the influence of job outcome bias. Performance appraisals are subject to the cognitive limitations (Selvarajan and Cloninger, 2009; Cardy and Dobbins, 1994), and given their prevalence, the influence of job outcome bias on ethical judgments is likely to be common. Yet job outcome bias is relatively unstudied. Also, unlike the previous ethics research examining undergraduates (e.g., Neubaum, Pagell, Drexler, MckeeRyan and Larson, 2009), this research examines ethical judgments of graduate students who are full-time employees, are generally older, and have more experience than undergraduates entering the field of management. The judgments of full-time employees are of greater practical interest and relevance in the field of management, and ethical judgments of older individuals have frequently been found to differ from those of younger individuals. Finally, systematic

examination of the influence of bias may shed light on the mixed findings of prior studies regarding the influence of education on ethical judgment. Therefore, this research provides new empirical evidence evaluating the relationship of ethics education to performance appraisal systems, and can be used to help build better theories. Theoretical Foundations and Hypotheses Performance appraisals and ethics Researchers have recommended recently that ethical behavior be explicitly incorporated into performance appraisals (Buckley, 2001; Weaver and Trevino, 1999), suggesting that incorporating ethical dimensions into performance appraisal systems will help integrate ethical expectations into formal role identities. Yet many organizations primarily reward other measures of performance, especially financial, regardless of ethical or unethical behavior. Although research remains limited, theoretical evidence suggests that job performance outcomes influence ethical judgments (e.g., Selverajan and Cloninger, 2009). Ashkanasy, Windsor, and Trevino (2006) found that perceptions that an organization rewards unethical behavior or punishes ethical behavior influences employees' decision-making. Other studies have found that respondents judged those with successful job performance outcomes to have exhibited more ethical behaviors than those who had unsuccessful job performance outcomes (Selvarajan and Cloninger, 2009). Furthermore, the ethical judgments in these studies were consistent regardless of the respondent's personal ethical beliefs. Education and ethics Arguments on the effectiveness of ethics education vary. Some research finds that integrating ethics into the curriculum is significant and decreases tolerance for unethical behavior (e.g., Lopez, Rechner, Sundaramurthy and Olson-Buchanan, 2005). Hartman (2006) suggests that ethics education can help students think critically about their values and how to put them into practice. In other words, ethics education can help students better assess complex situations and realize that being ethical is in their own best interests. Alternatively, Neubaum, et al. (2009) found the moral philosophies of undergraduate business students and nonbusiness students were similar as they progressed through four years of college, and that seniors were more likely than freshman to expect businesses to behave ethically. This finding is consistent with O'Fallon and Butterfield's (2005) review of the literature that indicates that more education, employment, or work experience is positively related to ethical decision-making, but that the type of education has little or no effect. Organizations support and undermine ethical judgment On the other hand, some make the argument that managers already know what is ethical, and know that they should be ethical (e.g., Velthouse and Kandogan, 2006), but that ethical judgments are undermined by organizational behavior. Moral reasoning may be context-specific and only weakly linked to behavior (Svanberg, 2008). Evidence suggests that organizations can support or oppose ethical behaviors (Hartman, 2006; Shelley, 1994). Organizations can foster an ethical environment or one in which customers, suppliers, or employees are treated dishonestly or unfairly (Shelley, 1994). In the latter, rationalizing unethical actions may be easy.

Similarly, some organizations require managers to meet unrealistic performance goals (Shelley, 1994), and meeting an immediate financial goal is rewarded while ethical behavior is not. In these organizations, ethics simply doesn't 'fit' into managers' daily tasks (Velthouse and Kandogan, 2006:153). Ethical judgments are subject to biases Given that unethical behavior can take a variety of forms, ranging from convenient disregard of company policies to breaking civil or criminal law, improving the ethical judgments of employees is vitally important to an organization. Although evidence suggests that more education generally improves ethical judgment (O'Fallen and Butterfield, 2005), ethical judgments are subjective. The ethical nature of behavior is seen as a social reality (Payne and Giacalone, 1990) rather than as an objective fact, and is subject to biases arising from cognitive limitations of the person rating the performance. Biases degrade decision outcomes (Doerr and Mitchell, 1998). The performance appraisal literature suggests that performance judgments (positive or negative) can be biased by outcomes achieved by the ratee, the characteristics of the respondent (e.g., education) as well as trait inferences made by the respondent (e.g., Cardy and Dobbins, 1994). From a schematic perspective (e.g., Neisser, 1967), a worker who achieves excellent work outcomes may be placed in a successful-performance cognitive category by the respondent. Thus, an outcome schema may influence the evaluation of the performer's ethical nature. Unethical behavior may be ignored, discounted, or reinterpreted as consistent with the schema of a high performer. This is consistent with research that finds people tend to rate the ethical nature of a successful employee more favorably than that of an unsuccessful employee (Selvarajan and Cloninger, 2009; Cardy and Selvarajan, 1997). Improving ethics education Recently, researchers have called for business courses to emphasize ethical and social responsible behavior as an aspirational standard for business and as a strategic way to earn greater long-term benefits for the firm (Kashyap, Mir, and Iyer, 2006). As an aspirational standard, ethical and socially responsible behaviors are expected much in the same way that the Hippocratic Oath is an aspirational standard for the medical profession, that is, an ideal that should be pursued regardless of other rewards. On the other hand, from a strategic perspective courses should seek to convince students that ethical and socially responsible behavior increases the likelihood of short- and long-term advantages for themselves and the firm. The twofold approach is posited to be more meaningful for students. In this thinking, a comprehensive business and society course with a significant ethics component can be expected to improve ethical judgments by providing a body of information, ethical tools and reasoning methods, and a variety of relevant cases and examples to which students can refer as they make ethical judgments. Education may increase a person's capacity for ethical reasoning (Svanberg, 2008), and education focused explicitly on improving ethical reasoning should improve ethical judgment. Therefore, this research posits that education, specifically a comprehensive business and society course with an extensive focus on ethics, will improve ethical judgment such that the respondents' ethical judgments are less biased by job performance outcomes. Hypothesis 1. Ethical judgments of students who complete a comprehensive business and society course will be less biased by job outcomes than ethical judgments of students who have not completed the course.

Rater age Rater characteristics have been found to significantly affect performance judgments (Cardy and Dobbins, 1994). In the appraisal literature, rater characteristics such as personality and ability have been recognized as potentially important influences on ratings (e.g., Lee 1988). Many studies have reported that age appears to be positively correlated with more ethical decisions. In O'Fallon and Butterfield's (2005) review of 37 studies on the effect of age and ethical decision-making, 10 found a positive relationship and six a negative relationship, but 14 reported no significant differences based on age. They concluded that the relationship between age and ethical decision-making is complicated and not necessarily captured by previous studies. This is likely true, but studies continue to find that age appears to be related to improved ethical judgments. Therefore, to focus more effectively on the influence of education on bias and improve our confidence in the results, this study will also examine if the students' age influences the relationship between ethics education and ethical judgments, or if there is an interaction effect between age and education. However, it will not make a hypothesis with respect to student age, although there is a general expectation that older respondents are likely to make better ethical judgments due to their greater work and life experiences. Methodology Self-selection bias All students in the program used in the study were required to take the business and society class, so the sample was not biased by self-selection. In other words, students who took the class were not necessarily more interested in ethics or social responsibility than those who took the class for other reasons (e.g., it fit their schedule). Sample The convenience sample consisted of 175 (90 men and 85 women) with an average work experience of 9.1 years. The average age of the respondents was 30.9 years. The respondents were employed in organizations ranging from large firms employing more than 1,000 to smaller firms employing fewer than 100. The respondents were all pursuing master's degrees, primarily in business at a Southwestern University. There were 82 participants in the after condition and 93 participants in the before condition (before and after taking a course). Experimental vignettes The basic material for this research was a vignette that described the performance of a fictitious sales person. The respondents randomly received one of four written vignettes (ethical-high performer, unethical-high performer, ethical-low performer, unethical low-performer). An example of the vignette is in the Appendix. Each vignette contained 10 critical incidents describing a salesperson's ethical or unethical behavior. The critical incidents represented five of the six dimensions (two incidents for each dimension) of ethical behavior. The six dimensions of ethical behavior (personal use, bribery, deception, padding expense accounts, passing blame, and falsification) were based on the research by Newstrom and Ruch (1975) and Akaah and Lund (1994).

Ethical behavior was manipulated by providing ethical or unethical incidents for each of the four ratees. The "ethical" ratees had ethical incidents and "unethical" ratees had unethical incidents for all the dimensions of ethical performance. In addition to critical incidents of ethical behavior, the vignettes also contained summary statements regarding sales performance outcomes. The summary statements were drawn from the dimensions of sales performance (salesmanship, product knowledge, and ability to initiate/utilize sales innovations) identified from research in marketing (Bush, Bush, Ortinau, and Hair, 1990; Lucas, 1985). These statements summarized the salespersons' outcomes for each of these dimensions. For example, a ratee with poor outcomes was described as failing to close sales on the salesmanship dimension. In addition to these summary statements, the overall performance of each ratee was described as successful or unsuccessful, as appropriate; a successful ratee was described as a star performer who consistently exceeded all performance targets and an unsuccessful ratee was described as a dismal performer who never achieved performance targets. In summary, ethical behavior was manipulated by providing unethical or ethical critical incidents for each of the four ratees. Job performance outcomes were manipulated by providing performance outcome descriptions for the sales performance dimensions and by summarizing the level of success or failure in the overall performance description. A total of four ratee vignettes were formed by crossing the two levels of ethical behavior (ethical or unethical) with the two levels of outcomes (success or failure). Validity and reliability of the vignettes Scale development work (Cardy and Selvarajan, 2004) confirmed the dimensions and effectiveness of the ethical and unethical incidents. In brief, the development work generated a six-dimension behavioral scale for assessing ethical judgment using the behaviorally anchored rating scale (BARS) procedure outlined by Bernardin and Beatty (1984). For each of the six dimensions, the authors generated critical incidents representing ineffective, average, and effective ethical behaviors. This is a variation from the BARS procedure outlined by Bernardin and Beatty (1984), in which students generated critical incidents. Retranslation was conducted by 47 undergraduate student raters who indicated the dimension to which each of the critical incidents belonged. Finally, the effectiveness of the items surviving the retranslation process was evaluated by a separate group of 84 student raters. Based on the effectiveness levels of items, behaviorally anchored rating scales were constructed for the six dimensions of ethical behavior. Each scale had approximately five behavioral anchors spanning the range of each scale. Further details can be found in Cardy and Selvarajan (2004). In addition, the dimensions of ethical behavior used in this study roughly correspond to the types of misconduct observed most frequently in organizations. In a national business ethics survey of 1,500 employees, the Ethics Resource Center (2003) found that the most often observed misconducts were lying, withholding needed information, abusive or intimidating behavior toward employees, and misreporting actual hours worked. Measures The rating scales included (a) a 12 item behavioral observation scale (BOS), (b) one 7-point global ethical rating scale, (c) one 7-point global performance rating scale, and (d) a 16-item, 7-point Likert scale for measuring individual differences in ethical beliefs (Daniel, Elliot-Howard and Dufrene, 1997). The behavioral observation scale contained a 12-item checklist on which participants were asked to print Y (yes) or N (no) depending on whether the sales person had exhibited the specific behavior. Ten of these items represented the 10 critical incidents provided in the vignette. Two items served as "lures" to calculate false alarm rates (explained later on). This scale was used for calculating the dependent measure "bias."

A scale developed by Daniel, Elliot-Howard, and Dufrene (1997) was used for measuring individual differences in ethical beliefs. This scale included five dimensions of ethical beliefs: personal integrity issues, corporate integrity issues, individual rights issues, environmental issues, and international issues. For this study, the items representing the three most relevant dimensions, namely, personal integrity issues, corporate integrity issues, and individual rights issues, were used. Sample items for this scale include: "It's acceptable to use investment resources from questionable resources," and "It's acceptable to restrict legal actions by damaged customers." The alpha reliability for this 16-item scale in the present study was 0.77. Dependent measure The signal detection measure of "bias" was used as the dependent measure for this study. Signal detection measures have been used extensively in determining judgment accuracy (e.g., Larson, Lingle and Scerbo, 1984; Lord, 1985; Snodgrass and Corwin, 1988; Sulsky and Day, 1992). Sulsky and Day (1992) define bias as "the probability of saying "yes" to an item when faced with a recognition task under conditions of uncertainty." That is, bias is a function of the probability of saying "yes" to lure items (items not presented in the ratee description vignette but appearing in behavioral observation scale). Bias is measured by the following formula recommended by Snodgrass and Corwin (1988): Bias = false-alarm rate/[1-(hit rate-false alarm rate)] Higher scores on this index are associated with more lenient decision criteria. A hit rate is the proportion of items correctly identified as observed, and a false alarm rate is the proportion of items incorrectly identified as observed. Since bias is undefined for hit rates of 1.0 and corresponding falsealarm rates of 0, the following corrections recommended by Snodgrass and Corwin (1988) were used: HR' = [hit-rates +0.5]/[no. of relevant items +1] FAR' = [false-alarm rates +0.5]/[no. of relevant items +1] Snodgrass and Corwin (1988) recommend the routine use of this correction in analyses using signal detection theory. Procedures The participants were randomly assigned to one of the four experimental conditions (success, unethical; success, ethical; failure, unethical; failure, ethical). The packet of materials given to the participants included one ratee vignette, one set of rating forms, the ethical belief scale, and a demographic data form. Participants were instructed to read each vignette carefully and fill out the various rating forms. They were specifically asked not to look back at the description of the salesperson while they were filling out the rating forms. Results

This research hypothesized that ethical judgments of students who complete a comprehensive business and society course will be less biased by job outcomes than ethical judgments of students who have not completed the course. In addition, to focus more effectively on the influence of education on bias and to improve our confidence in the results, this study also examined if the student's age influenced the relationship between the ethics education and ethical judgments, or if there was an interaction effect between age and education. We did not make a hypothesis with respect to student age, because evidence remained mix, but expected older respondents would make better ethical judgments due to greater work and life experiences. Our findings follow. Bias To test for before and after effects, that is whether or not the students who had completed the course demonstrated improved ethical judgment (less bias) than students who had not completed the course, we used analysis of variance. The mean bias score for the before condition was 0.53, and the mean bias score for the after condition was 0.41. Analysis of variance showed that the bias scores between these two conditions was significant (F (1,171) = 3.96; (p<0.05). Therefore, the hypothesis that the bias score would be less for the after condition compared with the before condition was supported. In summary, students who had completed the course demonstrated better ethical judgment than students who had not completed the course. Performance level still influenced ethical judgments, but judgments by students completing the course were significantly less biased than those of students not completing the course. Age To examine if the student's age influenced the relationship, we used analysis of variance to examine the direct effect and the interaction effect. This showed that both the age and the interaction between age and ethical education were not significant (the corresponding statistics are: F(1,171) = 2.43, p>0.05 and F(1,171) = 0.53, p>0.05), respectively. Completing the course had a significant effect, but age did not. However, post hoc analysis of mean bias scores for the relatively younger students in the sample showed a change in bias score from 0.58 to 0.48 for the before and after conditions, and for the relatively older students, the bias score changed from 0.43 to 0.39. Younger students for the purpose of post hoc analyses meant younger than the median age of 31. Although age was not significant, it is interesting to see that the effect of teaching ethics course on ethical judgment had more positive influence on younger students than older students. For a sample of younger students, the influence of age might have been significant and is an area for future research, as discussed later. Discussion and Conclusions This research examined whether or not ethics education can improve ethical judgments by mitigating the bias due to job performance outcomes. The results support the hypothesis that a single comprehensive business and society course with a focus on ethics can mitigate bias. The ethical judgments of students who completed the single course were less biased by job performance levels compared with students who had not completed the course. Contribution to research

Our findings imply that education, even a single course emphasizing business ethics, can improve a person's capacity for ethical reasoning. It adds to the research indicating that education improves ethical judgments (e.g., Neubaum, et. al. 2008). It also suggests that education may be even more influential in improving the ethical judgment of younger students since bias was reduced more for younger students than for older students (although not statistically significant). These are important findings for educators and point to the need for additional research into the efficacy of education for improving ethical judgment. The preliminary finding that education reduces the impact of organizational influences also calls for further study, but is a hopeful sign that ethics education can improve ethical judgment even in the face of organizational obstacles, such as rewarding unethical performers. Contribution to practice This research also has important, practical implications for organizations. Although ethics education may be useful, organizational influences remain important. The ethical judgments of students who completed the single course were less biased by job performance levels, but were still influenced by successful or unsuccessful job performance. This implies that in an organizational culture where winning is all important, the culture may excuse unethical behaviors, and other organizational values such as creeds of corporate conduct may be more likely to be ignored. The obvious conclusion for practicing managers is that to build an ethical work place, they probably should strive to reward ethical behavior and punish unethical behavior as well as strong or weak performance. Organizations cannot rely solely upon education to support ethical judgments. Education can help eliminate bias and improve ethical judgments, but cannot entirely overcome organization influences. Managers who take a relatively more lenient view of unethical behaviors for successful subordinates, it could perpetuate a success-breeds-acceptance culture, regardless of the educational background of subordinates. Managers should structure their organizations to support an ethical environment. They should seek to counter the influence of outcomes on ethical judgment by collecting ethical ratings from multiple sources (e.g., peers, and customers). Perhaps nonmanagerial appraisals are more sensitive to the process of ratee performance than to its outcomes. Customers, in particular, may be more focused on process than outcomes. Peers may also be more focused on a teammate's work process since it is directly observable. Limitations and future research One limitation of this research is that it used a business and society course that included studies of ethics, corporate social responsibility and citizenship, and strategy. Future research may wish to examine and compare the effectiveness of courses focused strictly on ethics, or citizenship, or the strategic benefits (e.g., reputation) in limiting bias. In addition, one of the authors designed and teaches the course in which the after data were collected. However, the other author designed the experimental vignettes independently. Nevertheless, future research may wish to examine the effectiveness of different instructors for the same course. Another limitation is that this research focused on one organizational influence, job performance appraisal outcomes. Other organizational variables, such as top management leadership and peer reviews of job performance, should also be examined. Future research should examine how institutional support for business and society or ethics education within the school influences the effectiveness of the course, that is, how seriously ethics and corporate social responsibility are taught and reinforced throughout the program. A study of over 200 full-time MBA programs found a lack of institutional support for ethics education (Evans and Weaver, 2005).

Another area of future research should focus on other rater characteristics, such as personality and cognitive moral development that could moderate the relationship between job outcome and ethical judgment bias. Another rater characteristic, age, continues to be associated with improved ethical judgment, but the findings are often not significant, indicating that the relationship of age to ethical judgment is likely to be more complex. Similarly, in this research the dependent measure of judgment bias has to do with observation, not with evaluation of the quality of the ratee's performance, and requires more study. Finally, the potential for on-the-job rater training specific to the organization rather than in a university or college setting also could reduce the influence of ratee performance on judgments concerning ethics. The development of norms and evaluation practice, similar to frame-of-reference training (Bernardin and Buckley, 1981), also might reduce the influence of job performance outcomes. However, the present studies provided direct and adequate information for clear and independent judgments of ethical behavior. Students who completed the course did appear to be less influenced by job outcomes than those who had not completed the course, and all students were full-time employees. Appendix Example Vignette. The Successful, Unethical Performer. WRITTEN DESCRIPTION OF THE SALES PERSON This sales person has been working in sales under your supervision for the past three years. This person has been one of the STAR PERFORMERS. This person's performance during the past year has been EXCEPTIONAL. Further, this sales person has always exceeded company targets and is one of the TOP EARNERS of sales commissions/bonuses. This sales person: 1) Is thoroughly familiar with the products of the company. 2) Has initiated lots of new sales/promotion ideas. 3) Persists on tough accounts. 4) Has thorough knowledge of special promotions/campaigns of the company. 5) Has very good knowledge about the products of the competition. 6) Has strong ability to close the sale. 7) Overstates the amount spent on taxi fares, car mileage, tips and the like.

8) Makes personal long distance calls using company telephone. 9) Often stirs up trouble among co-workers so that they are diverted by the interpersonal problems and he/she can focus on getting ahead at their expense. 10) Gives preferential treatment to influential customers to gain personal favor. 11) When dealing once with a customer who was ready to order a top-of-the-line product, the salesperson saw that the customer who was about to order a top-of-the-line product would be better off with a less expensive product and informed the customer about the better alternative. 12) Promptly informed a customer that he or she had received an inferior quality product and replaced it. 13) Succeeded in obtaining a huge order by giving the purchasing agent a gift worth $10,000. 14) Incurred $1,000 in expenses on a business trip but reported expenses for $2,000 for reimbursement. 15) Hoards free samples meant for customers for personal use. 16) Makes sexist/racial remarks about co-workers. REFERENCES AACSB International. (2004). Ethics Education in Business Schools. Report of the Ethics Education Task Force to AACSB International's Board of Directors, St. Louis, MO 63141. Akaah, I. P. and Lund, D. (1994). The influence of personal and organizational values on marketing professionals' ethical behavior. Journal of Business Ethics, 13, pp. 417-430. Ashkanasy, N. M., Windsor, C. A., and Trevino, L. K. (2006, October). Bad apples in bad barrels revisited: Cognitive moral development, just world beliefs, rewards, and ethical decision-making. Business Ethics Quarterly, 16, 4, pp. 449-473. Bernardin, H.J. and Buckley, M.R. (1981). Strategies in rater training. Academy of Management Review, 6, pp. 205-212. Bernardin H. J. and Beatty, R. W. (1984). Performance appraisal: Assessing human behavior at work. Boston, MA: Kent Publishing Co. Buckley, R. M. (2001, Spring/Summer). Ethical issues in human resource systems. Human Resources Management Review, 11, Issue 1/2.

Bush, R. P., Bush, A. J., Ortinau, D. J., and Hair, J. F. (1990). Developing a behavior-based scale to assess retail salesperson performance. Journal of Retailing, 66, 1, pp. 119-136. Cardy, R. L. and Dobbins G. H. (1994). Performance appraisal: A consideration of alternative perspectives. Cincinnati, OH: South-Western. Cardy, R. L. and Selvarajan, T. T. (1997). Assessing Ethical Behavior. The Impact of Outcomes on Judgment Bias. Paper presented at the 1997 Academy of Management Conference,_Boston, 1997. Cardy, R. L. and Selvarajan, T. T. (2004). Assessing Ethical Behavior: Development of a Behaviorally Anchored Rating Scale. Proceedings of the Southwest Academy of Management Meeting, Orlando, March, 2004. Ghoshal, S. (2005). Bad management theories are destroying good management practices. Academy of Management Learning and Education, 4(1): pp. 75-91. Daniel, L. G., Elliott-Howard, F. E., and Dufrene, D. D. (1997). The ethical issues rating scale: An instrument for measuring ethical orientation of college students toward various business practices. Educational and Psychological Measurement, 57, 3, pp. 515-526. Doerr, K. H. and Mitchell, T. R. (1998). The consequences of role-conferred bias and base-rate neglect. Decision Sciences, 29, 2. Ethics Resource Center (2000). 2000 National Business Ethics Survey. www.ethics.org. National Business Ethics Survey of 1500 employees, the Ethical Resource Center (2003). Evans, J. M. and Weaver, G. R. (2005). Ethics in the MBA curriculum: An investigation of determinants. In Social Issues in Management Paper Abstracts, Academy of Management Proceedings, 2005, 1-40, p. 36. Giacalone, R. A. and Thompson, K. R. (2008). From the guest co-editors: Special issue on ethics and social responsibility. Academy of Management Learning and Education, 5(3), pp. 261-265. Hartman, E. M. (2006, March). Can we teach character? An Aristotelian answer. Academy of Management Learning & Education, 5, 1, pp. 68-81. Kashyap, R., Mir, R., and Iyer, E. (2006, September). Toward a Responsive Pedagogy: Linking Social Responsibility to Firm Performance Issues in the Classroom. In the Academy of Management Learning & Education Special Issue: Ethics and Social Responsibility, Vol. 5 (3), pp. 366-76-341. Larson, J. R., Lingle, J. H., and Scerbo M. M. (1984). The impact of performance cues on leader behavior ratings: The role of selective information availability and probabilistic response bias. Organizational Behavior and Human Performance, 33, 323-349. Lee, J. E. (1988). The effects of cognitive style on rating accuracy with an overall rating scale. Human Performance, 1: pp. 261-271.

Lopez, Y. P., Rechner, P., Sundaramurthy, C., and Olson-Buchanan, J. B. (2005). Enhancing Ethical Perceptions: Impact of integrated ethics curriculum Vs a stand alone ethics course. In Management Education & Development Paper Abstracts, Academy of Management Proceedings, 2005, 1-34, p. 24. Lord, R. G. (1985). Accuracy in behavioral measurement: An alternative definition based on rater's cognitive schema and signal detection theory. Journal of Applied Psychology, 70, pp. 66-71. Lucas, G. H. Jr. (1985). The relationship between job attitudes, personal characteristics and job outcomes: A study of retail store managers. Journal of Retailing, 61, pp. 35-62. Neisser, U. (1967). Cognitive Psychology. Englewood Cliffs, NJ: Prentice Hall. Net Impact (2006). A Net Impact Survey of MBA Student Opinions on the Relationship between Business and Social/environmental Issue. In New Leaders, New Perspectives, Executive Director Liz Cutler Maw, San Francisco. Neubaum, D.O., Pagell, M., Drexler Jr., D. A., Mckee-Ryan, F.M., and Larson, E. (2009). Business Education and its relationship to student personal moral philosophies and attitudes toward profits: Am empirical response to critics. Academy of Management Learning & Education, 8, 1, pp. 9-24. Newstrom, J. W. and Ruch, W.A. (1975). The ethics of management and management of ethics. MSU Business Topics, 31. O'Fallon, M. J. and Butterfield, K. D. (2005). A review of the empirical ethical decision-making literature: 1996-2003. Journal of Business Ethics, 59, 4, (July, Part 2), pp. 375-413. Payne, S. L. and Giacalone, R. A. (1990). Social psychological approaches to the perception of ethical dilemmas. Human Relations, 43, 7, pp. 649665. Ritter, B. (2006, October). Can Business Ethics be Trained? A study of the ethical decision-making process in business students. Journal of Business Ethics, 68, 2, pp. 153-164. Rubin, R. S. and Dierdorff, E.C. (2009). How relevant is the MBA? Assessing the alignment of required curricula and required managerial competencies. Academy of Management Learning & Education, 8, 2, pp. 209-224. Selvarajan, T. T. (Rajan) and Cloninger, P. A. (2009). The influence of job performance outcomes on ethical assessments. Personnel Review, 38(4), pp. 398-412. Svanberg, J. (2008). Educating for accounting ethics: Abilities and identities? The case for a model of moral motivation development. International Journal of Business Research, 8(1), pp. 158-175.

Shelley, D. C. (1994, Summer) Ethics as a management tool. (Executive Forum). David C. Selley. Canadian Business Review, 21(2), pp. 41-3. Snodgrass, J. G and Corwin, J. (1988). Pragmatics of measuring recognition memory: Applications to dementia and amnesia. Journal of Experimental Psychology: General, 117, pp. 34-50. Sulsky, L. M. and Day, D. V. (1992). Frame of reference training and cognitive categorization: An empirical investigation of rater memory issues. Journal of Applied Psychology, 77, pp. 501-510. Tenbrunsel, A. K. and Smith-Crowe, K. (2008). Ethical decision-making: Where we've been and where we're going. Academy of Management Annals, 2(1), pp. 545-607. Velthouse, B. and Kandogan, Y. (2006). Ethics in Practice: What are managers really doing? Journal of Business Ethics, 70, pp. 151-163. Wayne, L. (2009). A Promise to be ethical in an era of immorality. The New York Times online, May 29, 2009, http:// www.nytimes.com/2009/05/30/business/30oath. html? r=3&hp Weaver, G. R. and Trevino, L. K. (1999). Integrated and decoupled corporate social performance: Management commitments, external pressures, and corporate ethics practices. Academy of Management Journal, 42, 5, pp. 539-552. Peggy A. Cloninger, University of Houston-Victoria T. T. Seivarajan, University of Houston-Victoria Dr. Cloninger, past recipient of a Kauffman Center for Entrepreneurial Leadership grant, focuses her research on integrating strategy, ethics, and issues related to business and society. Dr. Selvarajan pursues research in the areas of performance appraisal, ethical performance appraisal, and crosscultural issues in human resource management. Both authors are associate professors of management. Cloninger, Peggy A.^Seivarajan, T.T. Source Citation (MLA 7th Edition) Cloninger, Peggy A., and T.T. Seivarajan. "Can ethics education improve ethical judgment? An empirical study." SAM Advanced Management Journal Autumn 2010: 4+. Academic OneFile. Web. 19 Mar. 2013. Document URL http://go.galegroup.com/ps/i.do?id=GALE%7CA250999197&v=2.1&u=cclc_trade&it=r&p=GPS&sw=w

Gale Document Number: GALE|A250999197

A primary goal of personnel policies is the fair treatment of employees. Whistleblowing policies should increase the chances that both whistleblowers and those who are targeted by their accusations will be treated equitably. A Final Word

I have discussed briefly the essential components of whistleblowing policies and have presented what I believe to be three imperatives that compel your organization to consider adopting such a policy. In summary, I believe that organizations should establish whistleblowing policies in order to: * prevent retaliation against employees for expressing concerns about perceived wrongdoing (the legal imperative); * prevent public disclosures of alleged organizational wrongdoing, (the practical imperative); and * create a more just workplace (the ethical imperative). In closing, let me point out that I certainly do not believe that whistleblowing policies are a panacea for all ethical problems. Indeed, establishing such policies is just the first step. Communicating to employees the policy is equally crucial, and this means more than just an annual letter from the CEO. Ethical training sessions should be undertaken to acquaint employees with ethical dilemmas unique to your organization. Concrete examples of the types of activities that should be disclosed through internal whistleblowing channels should be discussed with employees. Employees should understand that they must be responsible in making accusations of wrongdoing, and that malicious or reckless charges are not sanctioned. Employees should understand how the organization will respond to their concerns in terms of an investigative process.|12~ The policy must be more than words on paper. Writing a policy, adopting it, and then going on with business as usual will do nothing to protect your company or to improve ethical conduct. The policy must reflect the real commitment of your organization to prevent retaliation against employee whistleblowers; encourage employees with ethical concerns to discuss them internally rather than externally; and create an overall environment within which employees have the opportunity and desire to behave ethically and responsibly. References 1. Jos, P. E., Tompkins, M. E., and Hays, S. W. (1989), "In Praise of Difficult People: A Portrait of the Committed Whistleblower," Public Administration Review, November-December, 552-561. 2. Hamilton, J. (1991), "Blowing the Whistle Without Paying the Piper," Business Week, June 3, 138-139.

3. Miceli, M. P., and Near, J. P. (1985), "Characteristics of Organizational Climate and Perceived Wrongdoing Associated with Whistleblowing Decisions," Personnel Psychology, 41, 525-544. Miceli, M. P., Roach, B. L., and Near, J. P. (1988), "The Motivations of 'Deep Throat': The Case of Anonymous Whistleblowers," Public Personnel Psychology, 17, 281-296. 4. Miceli, M. P., and Near, J. P. (1988), "Individual and Situational Correlates of Whistleblowing," Personnel Psychology, 41, 267-281. 5. Near, J. P. and Jensen, T. C. (1983), "The Whistleblowing Process: Retaliation and Perceived Effectiveness," Work and Occupations, 10, 3-28. Keenan, J. P. (1988), "Communication Climate, Whistleblowing, and the First-Level Manager: A Preliminary Study," Paper presented at the Southern Academy of Management, Atlanta. 6. Boyle, R. (1990), "A Review of Whistle Blower Protections and Suggestions for Change," Labor Law Journal, 41, 821-831. 7. Parliman, G. C. (1987), "Protecting the Whistleblower," Personnel Administrator, 32, (July), 26-32. 8. Hames, D. S. (1988), "The Current Status of the Doctrine of Employment-At-Will," Labor Law Journal, 39, 19-32. 9. Malin, M. H. (1983), "Protecting the Whistleblower from Retaliatory Discharge," University of Michigan Journal of Law Reform, 16, 277-318. Massengill, D. and Petersen, D. J. (1989), "Whistleblowing: Protected Activity or Not?" Employee Relations Law Journal, 15, 49-56. 10. Near, J. P. and Miceli, M. P. (1986), "Retaliation Against Whistleblowers: Predictors and Effects," Journal of Applied Psychology, 71, 137-145. 11. Barnett, T. R., Cochran, D. S., and Taylor, G. S. (1990), "The Relationship Between Internal Dissent Policies and Employee Whistle-Blowing; An Exploratory Study," Paper presented at the National Academy of Management Meeting, San Francisco. 12. Barnett, T. R. and Cochran, D. S. (1991), "Making Room for the Whistleblower," HRMagazine, January, 58-61. Dr. Barnett has published in The Journal of Business Research, Journal of Business Communication, and others, and is a member of the Academy of Management and Southern Management Assn. Abstract: Whistleblowing policies are essential for companies to handle whistleblowing cases efficiently. Whistleblowing policies at the very least should require that employees report knowledge of unethical activities to authorized personnel within the organization, assign individuals outside the chain of command as complaint recipients, assure employees protection from the possible results of disclosure, and create fair and impartial investigative

procedures. Existing legal, practical and ethical imperatives also support whistleblowing policies. Legal imperatives include increased federal and state laws protecting whistleblowers and the reduction of employment at-will doctrines. Practical imperatives include the unavoidable incidents of wrongdoing and more whistleblowing occurences. Ethical imperatives include the possible improvement of business ethics and the need for fair treatment of employees. Source Citation (MLA 7th Edition) Barnett, Tim. "Why your company should have a whistleblowing policy." SAM Advanced Management Journal Autumn 1992: 37+. Academic OneFile. Web. 19 Mar. 2013. Document URL http://go.galegroup.com/ps/i.do?id=GALE%7CA14079768&v=2.1&u=cclc_trade&it=r&p=GPS&sw=w

Gale Document Number: GALE|A14079768

A primary goal of personnel policies is the fair treatment of employees. Whistleblowing policies should increase the chances that both whistleblowers and those who are targeted by their accusations will be treated equitably. A Final Word I have discussed briefly the essential components of whistleblowing policies and have presented what I believe to be three imperatives that compel your organization to consider adopting such a policy. In summary, I believe that organizations should establish whistleblowing policies in order to: * prevent retaliation against employees for expressing concerns about perceived wrongdoing (the legal imperative); * prevent public disclosures of alleged organizational wrongdoing, (the practical imperative); and * create a more just workplace (the ethical imperative). In closing, let me point out that I certainly do not believe that whistleblowing policies are a panacea for all ethical problems. Indeed, establishing such policies is just the first step. Communicating to employees the policy is equally crucial, and this means more than just an annual letter from the CEO. Ethical training sessions should be undertaken to acquaint employees with ethical dilemmas unique to your organization. Concrete examples of the types of activities that should be disclosed through internal whistleblowing channels should be discussed with employees. Employees should understand that they must be responsible in making accusations of wrongdoing, and that malicious or reckless charges are not sanctioned. Employees should understand how the organization will respond to their concerns in terms of an investigative process.|12~

The policy must be more than words on paper. Writing a policy, adopting it, and then going on with business as usual will do nothing to protect your company or to improve ethical conduct. The policy must reflect the real commitment of your organization to prevent retaliation against employee whistleblowers; encourage employees with ethical concerns to discuss them internally rather than externally; and create an overall environment within which employees have the opportunity and desire to behave ethically and responsibly. References 1. Jos, P. E., Tompkins, M. E., and Hays, S. W. (1989), "In Praise of Difficult People: A Portrait of the Committed Whistleblower," Public Administration Review, November-December, 552-561. 2. Hamilton, J. (1991), "Blowing the Whistle Without Paying the Piper," Business Week, June 3, 138-139. 3. Miceli, M. P., and Near, J. P. (1985), "Characteristics of Organizational Climate and Perceived Wrongdoing Associated with Whistleblowing Decisions," Personnel Psychology, 41, 525-544. Miceli, M. P., Roach, B. L., and Near, J. P. (1988), "The Motivations of 'Deep Throat': The Case of Anonymous Whistleblowers," Public Personnel Psychology, 17, 281-296. 4. Miceli, M. P., and Near, J. P. (1988), "Individual and Situational Correlates of Whistleblowing," Personnel Psychology, 41, 267-281. 5. Near, J. P. and Jensen, T. C. (1983), "The Whistleblowing Process: Retaliation and Perceived Effectiveness," Work and Occupations, 10, 3-28. Keenan, J. P. (1988), "Communication Climate, Whistleblowing, and the First-Level Manager: A Preliminary Study," Paper presented at the Southern Academy of Management, Atlanta. 6. Boyle, R. (1990), "A Review of Whistle Blower Protections and Suggestions for Change," Labor Law Journal, 41, 821-831. 7. Parliman, G. C. (1987), "Protecting the Whistleblower," Personnel Administrator, 32, (July), 26-32. 8. Hames, D. S. (1988), "The Current Status of the Doctrine of Employment-At-Will," Labor Law Journal, 39, 19-32. 9. Malin, M. H. (1983), "Protecting the Whistleblower from Retaliatory Discharge," University of Michigan Journal of Law Reform, 16, 277-318. Massengill, D. and Petersen, D. J. (1989), "Whistleblowing: Protected Activity or Not?" Employee Relations Law Journal, 15, 49-56. 10. Near, J. P. and Miceli, M. P. (1986), "Retaliation Against Whistleblowers: Predictors and Effects," Journal of Applied Psychology, 71, 137-145.

11. Barnett, T. R., Cochran, D. S., and Taylor, G. S. (1990), "The Relationship Between Internal Dissent Policies and Employee Whistle-Blowing; An Exploratory Study," Paper presented at the National Academy of Management Meeting, San Francisco. 12. Barnett, T. R. and Cochran, D. S. (1991), "Making Room for the Whistleblower," HRMagazine, January, 58-61. Dr. Barnett has published in The Journal of Business Research, Journal of Business Communication, and others, and is a member of the Academy of Management and Southern Management Assn. Abstract: Whistleblowing policies are essential for companies to handle whistleblowing cases efficiently. Whistleblowing policies at the very least should require that employees report knowledge of unethical activities to authorized personnel within the organization, assign individuals outside the chain of command as complaint recipients, assure employees protection from the possible results of disclosure, and create fair and impartial investigative procedures. Existing legal, practical and ethical imperatives also support whistleblowing policies. Legal imperatives include increased federal and state laws protecting whistleblowers and the reduction of employment at-will doctrines. Practical imperatives include the unavoidable incidents of wrongdoing and more whistleblowing occurences. Ethical imperatives include the possible improvement of business ethics and the need for fair treatment of employees. Source Citation (MLA 7th Edition) Barnett, Tim. "Why your company should have a whistleblowing policy." SAM Advanced Management Journal Autumn 1992: 37+. Academic OneFile. Web. 19 Mar. 2013. Document URL http://go.galegroup.com/ps/i.do?id=GALE%7CA14079768&v=2.1&u=cclc_trade&it=r&p=GPS&sw=w

Gale Document Number: GALE|A14079768

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Title: Whistleblowing in organizations: implications from litigation Author(s): Marsha Katz , Helen LaVan and Yvette P. Lopez Source: SAM Advanced Management Journal. 77.3 (Summer 2012): p4. From Academic OneFile. Document Type: Article Full Text: COPYRIGHT 2012 Society for the Advancement of Management http://islander.tamucc.edu/~cobweb/sam/ Full Text:

A growing body of law offers protections to employees who "blow the whistle" on illegal or dangerous activities in their organizations, making whistleblowing a complex area for management. Failure to act upon the information provided by the whistleblower or retaliating against him or her can result in costly litigation. An analysis of 188 cases of whistleblowing litigation selected randomly from 940 litigated between 2003 and 2010 sheds light on general characteristics of the whistleblower and employer response--typically trying to discharge the employee (75% of the litigated cases). The employers prevailed in about one-half of the cases, the employee in 20%, with the balance involving split decisions. Managers will benefit from four suggestions for navigating this fraught area. ********** We often hear references to famous whistleblowers, such as those at WorldCom or Enron. We might think that these are extreme cases that could never happen in our company. However, in numerous whistleblowing cases, though not necessarily ones as well-publicized whistleblowers' actions had dire consequences for the company and its various stakeholders. For example, consider the case of Peanut Corporation of America (PCA). Kenneth Kendrick, an assistant plant manager at PCA, repeatedly reported to the Texas Department of Health incidents of rat infestation and feces in peanut butter. In addition, he reported a roof leak that allowed rainwater contaminated with bird feces to drip onto the peanuts. The contaminated peanut butter caused the death of at least eight people and sickened 529. Kendrick blew the whistle on both PCA and the Texas Department of Health, which ignored his initial allegations. Nevertheless, further investigation by the Texas Department of Health found that 355 additional companies were manufacturing and selling food without a state license and did not have any health inspections. Subsequently, PCA went bankrupt, resulting in the loss of 300 jobs, including Kendrick's.

Another example is the case of Merck and Vioxx. David Graham was a scientist for the Food and Drug Administration (FDA), whose funding depends on the success of the products it regulates, creating a conflict of interest. The FDA tried to suppress Graham's findings that revealed a statistical relationship between heart attacks and the use of Vioxx. Graham estimated that between 30,000 and 55,000 American deaths occurred as a result of patients taking Vioxx and possibly even more deaths occurred worldwide. Merck voluntarily withdrew Vioxx, and the medication remains off the market. The cost to the company is estimated at $4.8 billion in wrongful death claims alone (Voreacos and Johnson, 2010). A pharmaceutical giant, Merck's liability of $4.8 billion over several years is relatively small compared with its 2008 revenue of $23.8 billion and profits of $7.8 billion (Merck 2008 financials). Additionally, it is unknown what proportion of this liability is covered by Merck's insurance. As part of this settlement, Merck agreed to have additional oversight for new product development that is independent of Merck research labs. Additional case examples of whistleblowing can be found on the Whistleblower.org Web site (http://www.whistleblower.org/multimedia/whistle-where-you-work/archive). The costs of doing nothing when wrongdoings are reported can be immense. For instance, some of the social costs that are reported involve public safety, public harm, inappropriate financial reporting, inequity in employee treatments, sexual harassment, or the practice of including ghost workers on payroll. Approximately 37% of employees in the U. S. observe serious waste, fraud, or abuse in their place of work, although this number can vary greatly between occupations (Rothschild and Miethe, 1999). In the U. S. alone, financial costs of organizational wrongdoing have been estimated to include $5 billion in employee theft, $350 billion attributable to antitrust violations, $300 billion in tax fraud, and $100 billion in health care fraud (Miethe, 1999). Economic costs to the firm and its stockholders may stem from the eventual negative impact on earnings and shareholder lawsuits (Bowen, Call, and Rajgopal, 2010). Aside from the tangible costs, ignoring reported wrongdoing can also jeopardize the safety, health, and wellbeing of organization members, customers, and society. Despite these associated costs, some companies still attempt to discourage or prevent whistleblowing through discipline, termination, or by ignoring the claims. This last response, ignoring, applies mainly to companies operating within at-will states. At-will states give companies the flexibility to hire and fire employees at-will, and companies have used this to ignore, dissuade, or prevent the act of whistleblowing altogether. However, there can be legal consequences for companies choosing to respond to whistleblowing in this manner: termination for whistleblowing is against public policy, and disciplining or firing an employee for whistleblowing may be illegal. In an analysis of 188 cases from a random sample of 940 cases, findings indicate that firing a whistleblower without consequence to the company is not always possible. Therefore, companies should be aware of the potential legal consequences of any attempts to ignore, discipline, or fire an employee for whistleblowing. Overview and Purpose Whistleblowing is touted as necessary and desirable behavior that provides valuable societal contributions, such as protecting the environment and the health and safety of citizens, and finding irregularities in financial reporting. On occasion, whistleblowing results in litigation, which is the focus of this study. Litigation can result when the company fails to act on the information provided by the whistleblower or when it retaliates against the whistleblower. Even when the organization claims that they did not intentionally commit the actions that were the focus of the whistleblowing, litigation may proceed. An organization might even argue lack of knowledge of the law or ignorance of the activity that was the basis of either the whistleblowing or the retaliation. However, lack of knowledge of the law does not usually mitigate liability for unlawful activities. The issues involved in determining the resolution of the litigation must be examined. This study examines the protections afforded to whistleblowers, the overall context of whistleblowing, the nature of the wrong-doing, and the behavior of the employer related to retaliation. We further examine the legal consequences for employers who ignore whistleblowing. Based on the research, we present employers with recommendations about best practices for managing incidents of whistleblowing.

Whistleblowing Defined Whistleblowing can be defined as "the disclosure of information that is believed to be evidence of illegality, gross waste or fraud, mismanagement, abuse of power, general wrongdoing, or a substantial and specific danger to public health and safety" (http://www.whistleblower.org/about/what-is-awhistleblower). Mechanisms for reporting misbehaviors vary from directly reporting the incident to one's immediate supervisor, to human resources, to an ombudsman, to an external hotline, or to applicable government regulatory agencies (depending on the type of behavior). For example, discrimination or harassment might be reported to the EEOC. Issues related to public safety might be reported to OSHA, which generally enforces the Whistleblower Protection Act. Financial irregularities involving publicly traded companies, which should be reported under Sarbanes-Oxley, would be directed to the SEC. Other financial irregularities involving improper payment of governmental funds are initially filed in U.S. district courts. This Act was expanded in 2010 to include reporting of financial irregularities in patient care. After the initial investigation, the Department of Justice may pursue action. Additionally, there are state and, in some cases, municipal regulatory authorities that can be involved. Protections Afforded to Whistleblowers From a legal perspective, whistleblowing is extremely complex, involving various state and federal laws. The Constitution [amendments are an integral part of the Constitution] and tort actions. Specifically, the complexity of whistleblowing is triggered by the variation among the state laws. In addition, a variety of federal laws may be used to protect whistleblowers even though they were not designed for that purpose. Moreover, an individual might find recourse in various civil venues. Employers should be aware how these various legal options can afford protection to whistleblowers. State laws State statues protect whistleblowing that concerns violations of law supporting public interests. However, whistleblowing can only be considered as supporting public interests if certain kinds of positive information are disclosed (Vaughn, 1999). For example, does the disclosure reveal governmental waste, substantial and specific dangers to public health or safety, or an abuse of authority by public figures? Lindsay and Rockoff (2007) note that states tend to offer protection through a whistleblower-protection statute, tort actions for discharge in violation of public policy, or a combination of the two. States that provide statutory protection often provide broader protection through tort action. The effect of this is that while employees who blow the whistle may lose their jobs, they may be able to sue their employers to collect financial damages. Federal laws Whistleblowers Protection Act. Whistleblowers' protection is generally administered by the Occupational Safety and Health Administration (OSHA), including the whistleblowing provisions protecting employees who report violations of various trucking, airline, nuclear power, pipeline, environmental, rail, consumer product, and securities laws. A person filing a complaint of discrimination or retaliation claim will be required to show that 1) he or she engaged in protected activity, 2) the employer knew about that activity, 3) the employer subjected him or her to an adverse employment action, and 4) the protected activity contributed to the adverse action. Adverse employment action is generally defined as a material change in the terms or conditions of employment. Depending upon the circumstances of the case, "discrimination" can include firing or laying off,

blacklisting, demoting, denying overtime or promotion, disciplining, denial of benefits, failure to hire or rehire, intimidation, reassignment affecting promotion, or reducing pay or hours (http://www.osha.gov/dep/oia/er/index.html). False Claims Act--Compensation for whistleblowing. The False Claims Act is a federal law, often called the Lincoln Law, that allows people who are not affiliated with the government to file actions against federal contractors who fraudulently file claims against the government. Claims under the law have been filed by persons with insider knowledge of false claims typically involving health care, military, or other government spending programs. The provisions allow the whistleblower to receive a reward in proportion to the amount detected. Sarbanes-Oxley (SOX). The Sarbanes-Oxley Act one of 14 whistleblower laws, requires that there only be a reasonable belief that the action took place to trigger whistleblower protection. The Act provides two types of whistleblowing protection: incentive-based and retaliation-based. Since SOX was enacted on July 31, 2002 (Earle and Madek, 2007; Shine, 2007), 947 complaints have been filed under OSHA. Constitutional Amendments First Amendment--Limits to free speech. For many years, the First Amendment was an effective tool to combat retaliation against whistleblowers. In Pickering v. Board of Education (1968), the Supreme Court developed the balancing test to determine the scope of First Amendment protection for public employees. The Court created a firm line between public employees who make statements concerning public matters as citizens and those who make statements as part of their jobs. As a result, public employees must seek redress in other forums, such as civil service systems, union grievances procedures, or state and federal whistleblower laws when they are disciplined (Dietzen, 2006; McGuiness, 2008). Furthermore, in Garcetti v. Ceballos (2006), the Supreme Court fundamentally changed the public employment law for those who might report government fraud, waste, corruption, or abuse (McGuiness, 2008). The Court held that a public employee whistleblower does not enjoy First Amendment protection for reporting governmental misconduct if the report is made within the broad sphere of that governmental employee's official duties. When public employees make statements regarding their official duties, the employees are not speaking as citizens for First Amendment purposes, and, therefore, the Constitution does not protect their communication from employer discipline (Greenwald, 2006). Context of Whistleblowing The proposed model identifies various characteristics of the context of whistleblowing. These include characteristics of the whistleblower, characteristics of the case, employer misbehavior, and the retaliatory behavior of the employer (See Figure 1). Characteristics of the whistleblower Research has shown that the following factors can be related to whistleblowing and to job protections: gender (Kaplan, Pany, Samuels, and Zhang, 2009), type of employee or nature of the job (Bame-Aldred, Sweeney, and Siefert, 2007; Long, 2008; Oluwole, 2008; Vu, 2006), supervisory level (Keenan, 2002), and being an accomplice (Mansbach, 2009). [FIGURE 1 OMITTED]

Gender. Alford (2003) noted that several female whistleblowers have been in the news, such as Sherron Watkins of Enron, Coleen Rowley of the FBI, and Cynthia Cooper at WorldCom. Verschoor (2003) pointed out that of the five individuals singled out for praise and admiration for whistleblowing in 2002, four were women. Alford (2007) suggested that more women are blowing the whistle because many have reached high enough positions in the organization to see malfeasance by policy, as it might be called, while still remaining outsiders, not "one of the boys." While they tend to whistleblow on the same kind of issues as men, women seem to talk about their experiences differently than men. Type of employee (nature of the job). The nature of the job action may also be relevant to case outcomes (Alford, 2003, 2007; Miceli and Near, 1985, 2005; Miethe, 1999; Wortley, Cassematis, Donkin, and Blown, 2008). Since Sarbanes-Oxley gives significant protections to accountants, BameAldred, Sweeney, and Seifert (2007) examined the willingness of accountants to blow the whistle. They found that threatened retaliation reduced the perceived likelihood of accountant whistleblowing. However, when an employee was aware of the protection provided under Sarbanes-Oxley, the likelihood of whistleblowing significantly increased. In the presence of protection, the influence of retaliation disappeared, as whistleblowing was perceived equally likely whether retaliation was threatened or not. Thus, protection provided by the Sarbanes-Oxley Act may achieve its intended effect of mitigating the negative impact of potential retaliation on whistleblowing behavior, especially for accountants. Also of concern is the protection afforded to attorneys who blow the whistle (Vu, 2006). One point of view is that SOX protects all whistleblowing employees under Section 806. However, Section 307, which deals with the professional responsibilities of attorneys regarding the obligation to blow the whistle, is not specifically linked with Section 806, which contains the protection provisions. Long (2008) reports numerous charges of retaliatory discharges of attorneys. Level of employee (managerial/supervisory). Keenan (2002) examined the qualitative differences between various levels of managers (i.e., upper, middle, and first) with respect to a variety of perception variables related to whistleblowing. The study found significant differences across the various levels of management, with upper-level managers being more likely to blow the whistle on various kinds of wrongdoing than their comparative counterparts (Keenan, 2002). Our study aims to further examine the relationship between managerial and non-managerial occupational levels in whistleblowing cases.

Characteristics of the case Public vs. private. Limited research has been done in the public sector (Stewart and Sprinthall, 1993; Stewart, Sprinthall, and Kem, 2002). Oluwole (2008) discussed the fact that public school teachers who blow the whistle on improper employer practices face various repercussions. This occurred in Miami-Dade County where Bennett Packman, a new physical education teacher at American Senior High School, was told to teach driver's

education classes, for which he was not trained. Packman blew the whistle, asking Florida education officials to investigate the school. Our study alms to further examine whether statutes cover the public sector as previously examined by Callahan and Dworkin (2000). Additionally, previous research has also examined the effect of felony or misdemeanor nature of the act related to whistleblowing and job protections (Bowen, Call, and Rajgopal, 2010). Our study aims to further examine this relationship in addition to the potential factors of court level, union involvement, on-the-job vs. off-the-job behavior, and payment for whistleblowing. Employer misbehavior (nature of wrongdoing) The suspicion that whistleblowers are disgruntled employees, is not supported by research. Findings have shown that employees are more likely to blow the whistle when wrongdoing is serious, frequent, long-lived, or widespread and the evidence is clear (Near and Miceli, 2008). Additionally, Ramirez (2007) reports that workers are more likely to blow the whistle about public health and safety threats. Our study examines differences related to financial issues, sexual harassment, harassment not sexual, safety behavior and public harm, and discrimination. Retaliatory behavior by the employer (management retaliation) Actions taken by the employer against the whistleblower can be subtle and usually are not publicized. Mansbach (2007) reported extreme employer actions. For instance, an organization may seek to have the whistleblower diagnosed as mentally ill or dismissed, both of which were done in the case of Mia Kuch--a widely publicized Israeli case. Another example was a case of a chemical industry employee who was fired after showing symptoms of poisoning. In addition, there was the case of a bank employee who was transferred to a "no job," and ultimately quit under stress. In effect, retaliation against whistleblowers appears to be more severe and more certain than previously thought. For instance, in a study of 394 whistleblowers and 218 silent observers, 69% of the internal whistleblowers and some 84% of the external whistleblowers were fired, forced to resign, or forced to retire because of their disclosures (Rothschild and Miethe, 1999). In another study involving employees as whistleblowers, results indicate that 82% of the whistleblowers alleged that they were fired, quit under duress, or received significantly altered responsibilities as a result of bringing the fraud to light (Johnson, Stidham, Carp, and Manning, 2008). Additionally, after extensively interviewing whistleblowers in a whistleblower support group, two-thirds reported having lost their jobs (Alford, 2007). Our study examines management retaliation in the form of discharge, demotion, transfer, forced retirement, and other job outcomes. Current Study The data used in the current study stem from the Bureau of National Affairs (BNA), Inc., Labor and Employment Law Resource Center database. The BNA database is comprised of litigated cases from state and federal courts at all levels. The current study comprises 20% sample, randomly drawn from the resulting 940 cases using the following search strategy: (Whistleblow * OR (Whistle AND Blow)) and date (after 1/1/2003 and before 12/31/2010). These cases featured litigation related to whistleblowing to discern what is currently going on in the legal arena. The retrieved cases were coded and analyzed through content analysis. Of major concern in the analysis was the case outcome, which could entail a finding entirely in favor of the employer, a split finding, or a finding in favor of the employee. For example, a finding in favor of the employer would conclude that the employer acted appropriately with respect to investigating the activities involved in the whistleblowing. The outcome might also

find that the employer did not retaliate against the whistleblower. On the other hand, a finding in favor of the employee might require job reinstatement. The coding of the cases also involved identifying the presence or absence of characteristics/demographics of the whistleblower and the characteristics of the case, such as court level, whether a union was involved, and whether the whistleblower was entitled to a financial reward. The nature of employer misbehaviors, such as financial misbehavior or safety violations, and any retaliatory behavior on the part of the employer were also coded. Finally, the laws under which the case was litigated were also identified. The respective frequencies from the content analysis of the cases is provided in Table 1. Given the fluid nature of the legalities of whistleblowing, this study presents a more up-to-date comparison of the findings of previous research on whistleblowing issues. It takes a more comprehensive approach to the analysis and attempts to confirm previous research and discern discrepancies. Use of Litigated Cases as a Data Source This study used a policy-capturing approach to analyze both litigated and arbitrated cases. Multiple raters were used to discern case characteristics. Because policy-capturing research draws its data from the information contained in written judicial opinions, it is constrained by what judges choose to include in such opinions. One must assume, however, that the most important facts are highlighted in the judicial opinions and are the ones that will provide direction for future policy development. Hall and Wright (2008) note the increased potential contribution of this type of methodology, indicating that "case material is a gold mine for scientific work. It has not been scientifically exploited ..." Furthermore, "Content analysis makes legal scholarship more consistent with the basic epistemological underpinnings of other social science research" (Hall and Wright, 2008). Results The frequencies of the variables are portrayed in Table 1 as a percent of cases. Of the 188 cases included in the analysis, the employer prevailed 46.4% of the time, the employee in 19.7% of the cases, and decisions were split in 33.9% of the cases. A split decision is one in which each party obtains some of the results sought in the litigation. In examining the characteristics of the whistleblower, most were male (58.4%) and non-managerial (70.3%). In addition, results indicated that the whistleblower was an accomplice to the behavior in only one case. With regard to characteristics, 14% of the cases were at the state court level, 24.6% were in District Courts, 48% were at the Appeals Court level, and 8.6% were at the Supreme Court level, indicating that employees who blow the whistle are willing to pursue their protections at higher court levels. Interestingly, case characteristics indicate that a union was involved only 2.7% of the time. In over 95% of the cases, the misbehavior was a misdemeanor, occurring on the job 56.5% of the time. The cases were mainly in the private sector, and financial compensation for whistleblowing occurred only 8.6% of the time. The employers' alleged misbehaviors included financial misconduct (23.4%); sexual harassment (4.3%); harassment not sexual (10.6%); endangerment to public safety and public harm (19.7%); and discriminatory behavior (24.3%). Additionally, management attempted many forms of

retaliation, with discharge the most prevalent (76.8% of cases). Other forms of retaliation included demotion (5.1%), transfer (2.8%), forced retirement (3.4%), and other job outcomes (11.9%). Laws used as part of the defense were the State Whistleblowers Act (13.4%), Sarbanes-Oxley Act (10.1%), False Claims Act (6.4%), and the Whistleblower Protection Act (22.3%). However, other laws that protected employees included Constitutional amendments (13.8%), employment discrimination (22.0%), union protection (6.4%), state fair employment (7.4%), compensation (8.5%), and safety (3.3%). Cases in which there was a split decision (33.9%) or the employee prevailed (19.1%) were analyzed. For instance, the court could rule that a terminated worker be reinstated, but no back pay would be awarded. The significance of a sprit decision is that either party can appeal. However, in situations where one party wins, only the other party will appeal (see column 2 of Table 1). In terms of court level, the percent of all cases at the Appeals Court was 48.1%, declining to 39.2% for split or employeeprevailing cases. In over half of the cases that go to higher courts, the employee either wins or splits. In addition, the employee was more likely to prevail or sprit when safety or public harm was involved. They also prevailed or split more frequently when they received payment for whistleblowing or there was sexual harassment. While the Whistleblower Protection Act and employment discrimination laws were the most frequently involved in all cases, when the employee prevailed or split, state whistleblowing, discrimination laws and compensation laws were more likely to be involved. Overall, the Sarbanes-Oxley Act was less likely to be involved. Contributions to Management Practice This study both substantiates and refutes the research of other authors (see Table 2). Moreover, this study views whistleblowing through the lens of litigation. Litigation is of paramount importance in this process, because of the public forum it provides and the precedents set. In general, the popular press has given the impression that employees are well-protected under Sarbanes-Oxley and the False Claims Act. However, we see from the previous research and our data that not many cases are successful in protecting employees (Earle and Madek, 2007; LaVan and Katz, 2005; Lindsay and Rockoff, 2007; Shine, 2007). While the media tend to emphasize the newsworthiness and the extreme cases of whistleblowing, the actual day-to-day reality as expressed in the litigated court cases is very different. In fact, employers (including split decisions) prevailed slightly less than half of the time. Additionally, our study confirmed previous studies showing that only a small percent of employees received financial compensation (Boumil, Nariani, Boumil, and Berman, 2010). However, there are other costs to whistleblowing. All stakeholders of the company can be jeopardized by the wrong-doing, as previously discussed in this study and others (Bowen et al., 2010; Rothschild and Miethe, 1999). While there are mixed results in the literature regarding the gender of the whistleblower, our study found that in 58% of the cases the whistleblower was male. While Sincoff, Slonaker, and Wendt (2006) found that women filed more claims than men, our study did not confirm these findings. Additionally, several studies deal with special occupational concerns such as attorneys, teachers, and accountants (Bame-Aldred et al., 2007; Long, 2008; Oluwole, 2008; Vu, 2006). Our study examined the differences between managerial and non-managerial occupations only, indicating that nonmanagers were more likely to report wrong-doing than their managerial counterparts. With respect to case characteristics, union involvement was low in our study, probably because union members are protected under their own grievance procedures and are less likely to end up in litigation. This variable has not been considered in previous studies. With regard to private vs. public behavior, two issues arise with respect to public sector employees. One issue involves the prevalence of cases. Callahan and Dworkin (2000)

note this, and our study also found that almost 18% of the cases involved public sector employees. A second issue relates to the legal rights of public sector employees. Dietzen (2006), McGuinness (2008), and Greenwald (2006) note that public employees must seek redress in other forms. Our study confirms that public employers prevail when the First Amendment is involved. Additionally, Stewart and Sprinthall (1993) and Stewart, Sprinthall, and Kem (2002) found that public sector whistleblowers were not necessarily disgruntled employees. Our study confirmed that the courts ruled that the employees had a legitimate concern in 50% of the cases. In considering employer misbehavior, or the nature of the wrong doing, our study confirmed that whistleblowing is more likely to occur when safety and public harm are issues (Near and Miceli, 2008; Ramirez, 2007). Lastly, proposed management retaliation tended to be in the form of discharge. However, it is likely that those who experienced retaliation less severe than discharge would be less likely to sue. Thus, cases in litigation represent the extreme forms of employee discipline for whistleblowing. It may be that many whistleblowers are not disciplined or settle before litigation. Advice to Managers Important managerial actions can be derived from this study. These include managing the legal consequences of whistleblowing, delineating accountability with respect to who blows the whistle and how the whistleblower is managed, and avoiding retaliation. The proactive development of policies and a culture supporting whistleblowing are strongly recommended. Other research-based recommendations follow: * Understand the legalities of ignoring whistleblowing This study makes a unique contribution as the only one to analyze litigated cases to understand the consequences of ignoring the whistleblower. Whistleblowers and employers who terminate whistleblowers should prepare for a lengthy court battle, since these individuals tend to appeal. Cases in litigation represent the extreme forms of employee discipline for whistleblowing. It may be that many whistleblowers are not disciplined or settle before litigation. Even with no litigation, there are still organizational costs in resolving issues relating to whistleblowing. Because it is relatively new legislation with a narrow focus on accounting, there is little litigation to date under Sarbanes-Oxley. In addition, given the nature of the legislation, stakeholders other than employees, such as auditors, vendors, and industry regulators, are more likely to whistleblow (Tsahuridu and Vandekerckhove, 2008). * Delineate accountability Changes are occurring with respect to whistleblowing in that there has been greater regulation, greater societal expectations of accountability, and increased publicity regarding the consequences of ignoring behavior warranting whistleblowing. However, there is no way of knowing how many instances of whistleblowing took place within an organization where the employees were duly credited or rewarded. Additionally, further research should try to explain differences in the perception of what behaviors warrant whistleblowing. * Avoid retaliation While there is a tendency to protect the company and retaliate against the individual whistleblower by discharge, the employee either prevailed or had split outcomes in 80% of the cases. This suggests that retaliation is not an effective managerial practice, because it exacerbates the problem.

Furthermore, if the whistle is blown based on employment discrimination practices in an organization, there could be both financial and reputational consequences for the individual and the company. If there are issues related to financial behavior that may be covered under the Sarbanes-Oxley Act, the employer may face serious consequences of litigation, potentially resulting in fines, compensation to the whistleblower, and loss of customers and reputation. * Proactively develop policies and a culture supporting whistleblowing Several studies have recommended a code of practice to institutionalize whistleblowing within the organization. This code could contain and even harness whistleblowing for the company's good (Kaptein, 2002; MacNab and Worthley, 2008; Vinten, 1992, 2004). Ellis and Arieli (1999) further suggest that organizational culture should support reporting irregularities in the organization as a norm. However, by making employees responsible or even liable for whistleblowing, implementing these policies may also turn responsibility into liability. It could also increase organizational control, holding employees responsible for what they do or fail to do (Tsahuridu and Vandekerckhove, 2008). Tsahuridu and Vandekerckhove (2008) explored the impact of recent legal developments on organizational whistleblowing with respect to the responsibility of whistleblowers. Their concern is whether organizational policies actually increase the individualization of work, allowing employees to act in accordance with their conscience and in line with societal expectations. On the other hand, are these policies management tools to control employees and protect the organization from whistleblowing employees? In summary, effective management practice requires proactive prevention of actions that may lead to whistleblowing, reporting mechanisms to prevent external regulation, and the development of a culture that values integrity. In the interest of society (to be protected from harm, corruption, etc.), of organizations (to be protected from fraud, litigation, etc.) and of employees (to be protected from harm, discharge, etc.), it would be beneficial to have an organizational culture that protects employees who whistleblow from harm or retaliation. This kind of culture could be perceived as a win-win, benefiting most involved. REFERENCES Alford, C. F. (2003). Civil society and its discontents. The Good Society, 12(1), 11-16. Alford, C. F. (2007). Whistle-blower narratives: The experience of choiceless choice. Social Research: An International Quarterly of Social Sciences, 74(1), 223-248. Bame-Aldred, C., Sweeney, J. T., and Seifert, D. (2007). An examination of the effectiveness of Sarbanes-Oxley whistle-blower protection. Journal of Forensic Accounting, 8, 105-118. Boumil, S. J., Nariani, A., Boumil, M. M., and Berman, H. A. (2010). Whistleblowing in the pharmaceutical industry in the United States, England, Canada, and Australia. Journal of Public Health Policy, 31(1), 17-29.

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Lindsay, D. C., and Rockoff, S. P. (2007). Beyond Sarbanes-Oxley: State law protections in the era of the whistleblower. Employment Relations Today, 34(1), 69-88. Long, A. B. (2008). Retaliatory discharge and the ethical rules governing attorneys. University of Colorado Law Review, 79. MacNab, B. R., and Worthley, R. (2008). Self-efficacy as an intrapersonal predictor for internal whistleblowing: A US and Canada examination. Journal of Business Ethics, 79(4), 407-421. Mansbach, A. (2007). Political surplus of whistleblowing: A case study. Business Ethics: A European Review, 16(2), 124-131. Mansbach, A. (2009). Keeping democracy vibrant: Whistleblowing as truth-telling in the workplace. Constellations, 16(3), 363-376. McGuinness, J. M. (2008). Whistleblowing and free speech: Garcetti's early progeny and shrinking constitutional tights of public employees. Touro Law Review, 24, 529-568. Miceli, M. P., and Near, J. P. (1985). Characteristics of organizational climate and perceived wrongdoing associated with whistle-blowing decisions. Personnel Psychology, 38(3), 525-544. Miceli, M. P., and Near, J. P. (2005). Standing up or standing by: What predicts blowing the whistle on organizational wrongdoing. Research in personnel and human resources management, 24, 95-136. Miethe, T. D. (1999). Whistleblowing at work: Tough choices in exposing fraud, waste, and abuse on the job. Boulder, CO: Westview Press. Near, J. P., and Miceli, M. P. (2008). Wrongdoing, whistleblowing, and retaliation in the US government: What have researchers learned from the merit systems protection board (MSPH) survey results? Review of Public Personnel Administration, 28(3), 263-281. Oluwole, J. (2008). Public employment-free speech jurisprudence: A new constitutional test for disciplined whistleblowers. University of Florida Journal of Law and Public Policy, 19(3), 421-478. Owens, J. M., Gomes, G. M., and Morgan, J. F. (2008). Broadening the definition of unlawful retaliation under Title VII. Employee Responsibilities and Rights Journal, 20(4), 249-260. Picketing v. Board of Education of Township High School District 205, 391 US 563, 88 S. Ct. 1731, 20 L. Ed. 2d 811 563 (Supreme Court 1968). Ramirez, M. K. (2007). Blowing the whistle on whistleblower protection: A tale of reform versus power. University of Cincinnati Law Review, 76(1), 183.

Rothschild, J., and Miethe, T. D. (1999). Disclosing misconduct in work organizations: An empirical analysis of the situational factors that foster whistleblowing. Research in the Sociology of Work: A Research Annual, 211-227. Shine, D. B. (2007). Pity the SOX whistleblower; pity the SOX in-house counsel whistleblower. Labor Law Journal 58(4), 228. Sincoff, M. Z., Slonaker, W. M., and Wendt, A. C. (2006). Retaliation: The form of 21st century employment discrimination. Business Horizons, 49(6), 443-450. Stewart, D. W., and Sprinthall, N. A. (Eds.). (1993). The impact of demographic, professional and organizational variables and domain on the moral reasoning of public administrators. Armonk, NY: M. E. Sharp. Stewart, D. W., Sprinthall, N. A., and Kem, J. D. (2002). Moral reasoning in the context of reform: A study of Russian officials. Public Administration Review, 62(3), 282-297. Tsahutidu, E. E., and Vandekerckhove, W. (2008). Organizational whistleblowing policies: Making employees responsible or liable? Journal of Business Ethics, 82(1), 107-118. Vaughn, R. G. (1999). State whistleblower status and the future of whistleblower protection. Administrative Law Review, 51, 581-583. Verschoor, C. (2003).Will new law result in more whistle blowing? Strategic Finance, 48(8), 22-24. Vinten, G. (1992). Whistle blowing: Corporate help or hindrance? Management Decision, 30(1), 44-48. Vinten, G. (2004). Whistle blowing: The UK experience, part 2. Management Decision, 42(1), 139-151. Voreacos, D., and Johnson, A. (2010) Merck paid 3,468 death claims to resolve Vioxx suits. Bloomberg, Retrieved November 11, 2011, from http://www.bloomberg.com/ news/2010-07-27/merck-paid3-468-death-claims-to-resolve-vioxx-suits.html Vu, K. T. (2006). Conscripting attorneys to battle corporate fraud without shields or armor-reconsidering retaliatory discharge in light of SarbanesOxley. Michigan Law Review, 105(1), 209-239. What is a Whistle Blower? Government Accountability Project. Retrieved September 19, 2011, from http://www.whistleblower.org/about/what-is-awhistleblower Whistle Where You Work. (2008-2011). Government Accountability Project. Volumes 1-35. Retrieved from http://www.whistleblower.org/multimedia/whistlewhere-you-work/archive Washington, DC.

Wortley, R., Cassematis, P., Donkin, M., and Blown, A. J. (Eds.). (2008). Who blows the whistle, who doesn't and why? Canberra, Australia: Australian National University Press. Marsha Katz, Governors State University Helen LaVan, DePaul University Yvette P. Lopez, DePaul University In addition to teaching human resource management, organizational behavior, and management and labor, Dr. Katz researches bullying, employer control of off-the-job behavior, organizational change, and labor issues. She has published widely and was an examiner for the Baldrige Awards Program. Dr. LaVan, a Wicklander Fellow in Business Ethics, teaches courses in human resources (management, recruitment, and selection), career development, and training. Publications reflect her interest in dispute resolution and employment discrimination, among other areas. Dr. Lopez teaches organizational behavior and management and researches and publishes in areas of business ethics and workplace violence.
Table 1. Case Frequencies Percent of Cases Outcome: Percent of Split or Employee Prevail N=97 33.9 19.7 58.5 28.4 0

Case Outcome Employer Split Employee Characteristics of the Whistleblower Gender--male Type of employee--non -managerial Is the whistleblower an accomplice to the behavior? Characteristics of the Case Court level State District Appeals Supreme Union involvement On- or off-job behavior Public (vs. private) Felony (vs. misdemeanor) Payment for whistleblowing Employer Misbehavior

N=188 46.4 33.9 19.7 58.4 70.3 0.5

13.9 24.6 48.1 8.6 2.7 56.5 17.9 2.1 8.6

19.6 25.8 39.2 14.1 3.1 60.5 17 3.1 11.5

Financial issues Sexual harassment Harassment, not sexual Safety behavior and public harm Discriminatory behavior Management Retaliation Discharge Demotion Transfer Forced retirement Other job outcomes Legal Environment State Whistleblower Acts Sarbanes-Oxley False Claims Act Whistleblower Protection Act Constitutional Amendments Employment discrimination laws Union laws State fair employment laws Compensation laws Safety laws

23.4 4.3 10.6 19.7 24.3 76.8 5.1 2.8 3.4 11.9 13.4 10.1 6.4 22.3 13.8 22 6.4 7.4 8.5 3.3

21.7 (a) 7.2 9.3 26.8 28 80.2 3.3 0 3.3 13.2 17.7 6.2 4.1 21.6 13.4 29.2 5.2 7.2 10.3 4.2

(a) Financial behaviors include bad financial reporting, ghost workers on the payroll, unpaid wages, incorrect time reporting, and corruption of a financial nature. Table 2. Comparison of Findings Other Authors Other Authors Findings

Characteristics of the Whistleblower Gender Sincoff, Slonaker, and Wendt (2006) Women file more retaliation claims and more sex based claims. Those who report harassment can expect to experience retaliation including termination, pay cuts and threats of physical violence.

Type of Employee (Nature of the job) Vu (2006)

Attorneys

Long (2008) Bame-Aldred, Sweeney and Seifert (2007) Oluwole (2008)

Retaliatory discharge of attorneys not protected. Teachers. Accountants less likely to blow the whistle when retaliation is threatened but when aware of protections were equally likely when threatened.

Level of Employee (Managerial/Supervisory Level) Keenan (2002)

Upper -level managers appear to be more likely to report wrong-doings than their middle-level and first-level counterparts. Being an accomplice is a related factor to whistle-blowing.

Accomplice Mansbach (2009)

Characteristics of the Case Public Sector Callahan and Dworkin (2000) Dietzen (2006) Greenwald (2006) McGuinness (2008) Stewart and Sprinthall (1993) Stewart, Sprinthall, and Kern (2002) Employer Misbehavior Financial Issues Statutes cover public sector. Public employees can-not use First Amendment, must seek redress in other forums. Whistleblowers are not disgruntled employees in public sector.

Boumil, Nariani, Boumil, and Berman (2010) Rothschild and Miethe (1999) Bowen, Call, and Rajgopal (2010) Owens, Gomes, and Morgan, (2008) Safety Behavior and Public Hann Ramirez (2007)

Only minority whistle-blowers received financial compensation. Costs of whistleblowing.

All stakeholders are jeopar-dized by wrong doing.

Employees more likely to blow the whistle about public health and safety. Employees more likely to blow the whistle when wrongdoing is serious, frequent, long lived or widespread and evidence clear. Consequences of whistleblowing including being fired, quitting under duress or having altered responsibilities.

Near and Miceli (2008)

Management Retaliation Alford (2007) Johnson, Stidham, Carp, and Manning (2007) Rothschild and Miethe (1999) Legal Environment Lindsay and Rockoff (2007) Earle and Madek (2007) Shine (2007)

State statutes offer a variety of protections for whistle-blowers. Employee only needed reasonable belief for whistleblowing

protection. However may fire under constructive discharge. LaVan and Katz (2005) Individuals who file sexual harassment retaliation claims are technically not protected as whistleblowers. Concern is whether legal protections protect employ-ees or allow management to better control them. Real change in culture and policy needed.

Tsahuridu and Vandekerckhove, (2008)

Recommendations/Implications Ellis and Arieli (1999) Kaptein (2002) MacNab and Worthley (2008) Near and Miceli (2008) Tsahuridu and Vandekerckhove (2008) Vinten (1992, 2004) Other Authors

Our Study's Findings

Characteristics of the Whistleblower Gender Sincoff, Slonaker, and Wendt (2006) Our study does not confirm that women file more sexual harassment or various types of retaliation claims. Results indicate that in 58% of the cases, the whistleblower was male.

Type of Employee (Nature of the job) Vu (2006) Long (2008) Bame-Aldred, Sweeney and

Our study does not exam ine the nature of the job.

Seifert (2007) Oluwole (2008) Level of Employee (Managerial/Supervisory Level) Keenan (2002)

Our study examines the relationship between managerial vs. non managerial occupational levels in whistleblower cases. Results indicate non-managers are more likely to report wrongdo ing than their managerial counterparts. Our study identifies only 1 instance (case) where the whistleblower was an ac complice to the behavior.

Accomplice Mansbach (2009)

Characteristics of the Case Public Sector Callahan and Dworkin (2000) Dietzen (2006) Greenwald (2006) McGuinness (2008) Stewart and Sprinthall (1993) Stewart, Sprinthall, and Kern (2002) Employer Misbehavior Financial Issues Boumil, Nariani, Boumil, and Berman (2010) Nine percent of whistle blowers received financial Our study found 17.9% of cases were in the public sector. We confirm that employ ees did not prevail in First Amendment cases. In 50% of public sector cases, courts ruled that the employee had a legitimate concern.

compensation. Rothschild and Miethe (1999) Bowen, Call, and Rajgopal (2010) Owens, Gomes, and Morgan, (2008) Safety Behavior and Public Hann Ramirez (2007) Our conclusion confirms costs of whistleblowing.

Our study also concludes this.

Our findings on whistle blowing confirm safety and public harm were issues of concern in 20% of cases. Our findings on whistle blowing confirm safety and public harm were issues of concern in 20% of cases. Our study confirmed these consequences of whistle blowing.

Near and Miceli (2008)

Management Retaliation Alford (2007) Johnson, Stidham, Carp, and Manning (2007) Rothschild and Miethe (1999) Legal Environment Lindsay and Rockoff (2007) Earle and Madek (2007) Shine (2007)

Our results found 13.4% were litigated under state statutes. We find similar results in that management retalia tion was in various forms, including threat to dis charge, harassment and sexual harassment and forced retirement. Our data confirm that

LaVan and Katz

(2005)

individuals filing sexual harassment cases use laws other than state or federal whistleblowing protection acts. Our study found that 35.7% of whistleblowers were specifically protected by whistleblowing legisla tion, but 33% experienced retaliation. Our conclusion confirms.

Tsahuridu and Vandekerckhove, (2008)

Recommendations/Implications Ellis and Arieli (1999) Kaptein (2002) MacNab and Worthley (2008) Near and Miceli (2008) Tsahuridu and Vandekerckhove (2008) Vinten (1992, 2004)

Katz, Marsha^LaVan, Helen^Lopez, Yvette P.

Source Citation (MLA 7th Edition) Katz, Marsha, Helen LaVan, and Yvette P. Lopez. "Whistleblowing in organizations: implications from litigation." SAM Advanced Management Journal Summer 2012: 4+. Academic OneFile. Web. 19 Mar. 2013. Document URL http://go.galegroup.com/ps/i.do?id=GALE%7CA305452780&v=2.1&u=cclc_trade&it=r&p=GPS&sw=w

Gale Document Number: GALE|A305452780