Although HR Compliance does not have an exact definition, it can be generally described as a modern form of HR management. It combines processes, procedures and activities that set out the most important standards concerning conduct in the HR field. The basic aim of applying compliance principles is to make sure that everything complies with the relevant rules and codes of conduct – primarily legal, but also those concerning public perception and moral standards. An effective system for protecting whistleblowers who report irregularities in their organisation is undoubtedly an element of a broader compliance system.
Good management is key
People are the most valuable company resource but, at the same time, are prone to human error. Work and productivity can be affected by many factors, for example, overwork, stress or distractions caused by personal life issues. This, coupled with the Covid pandemic and the problems that have come out of it, such as remote working, depression caused by isolation, uncertainty and instability, makes human resources management increasingly complex. However, good HR management is still crucial from a business perspective.
How does this work in practice?
Unfortunately, instead of preventing and tackling any potential irregularities, especially financial issues, it is still common practice to sweep them under the carpet. However, a broader view should be taken as any existing irregularities will eventually come to light. Experience teaches us that such situations can end very badly for organisations, for example, JP Morgan Chase, which paid a record $9 billion to silence a female lawyer it had employed for eight years. This is a disaster that can easily be avoided by introducing appropriate compliance procedures well in advance. HR compliance is primarily about prevention, which means putting out fires long before they actually start.
Is a whistleblower an informer?
Shifting the focus on corporate social responsibility (CSR) should change the way whistleblowers are perceived. After all, one of them could be another Jesse Colombo, the analyst who predicted the 2008 global financial crisis. Had the effective HR compliance procedures been in place and companies guaranteed anonymous internal whistleblowing channels at the time, it might have been possible to take preventive action in time and perhaps avert an impending global financial crisis. This extreme example can be downscaled and applied to every company, regardless of its size. Information received in time can alter the fate of a company and its employees. Therefore, a whistleblower should not be considered a grass or an informer but someone who cares about the workplace and believes their actions can bring a positive change. However, it is necessary to provide the appropriate reporting infrastructure to make it happen.
Whistleblowing as a system for reporting irregularities is part of a general HR compliance policy. Putting it into practice is not only a recommended but an obligatory measure for running a socially responsible business. PCS Paruch Chruściel Schiffter | Littler Global believes that a company can and should be built on values. Introducing the above-mentioned solutions would be a good first step that should not be put off.