The Cost of Incivility in the Workplace

Originally published in NAVEX Global's Top 10 Ethics & Compliance Trends for 2019 eBook.

The modern workplace may be finally undergoing a period of self-reflection as the demand for better and more civil working environments is moving to the forefront. This demand is not new. Employees have always framed the majority of reports made to ethics and compliance hotlines as issues of respect and fair treatment. And too often these concerns are dismissed by leadership as whining or complaining – not related to the business and certainly not a “compliance issue.” Nothing could be further from the truth.

Cost is seen in decreased productivity, loss of top talent, stilted innovation, increased sick time, poor customer service and yes, serious compliance violations.

The truth is that rude, abusive, harassing, and bullying behavior has been costing organizations big-time for decades. The cost is seen in decreased productivity, loss of top talent, stilted innovation, increased sick time, poor customer service and yes, serious compliance violations. And when we include retaliatory behavior in this definition, the legal costs and compliance risks go even higher. Like harassment and retaliation, incivility in the workplace is often another form of abuse of power, and it is important that we address all of these issues together to truly change cultures.

Let’s look at some numbers. In its 15th Global Fraud Survey (2018), EY uncovered findings on a primary indicator of corporate civility – integrity. When asked who is responsible for integrity within the organization, only 22 percent of respondents said that integrity is an individual’s responsibility. The other 78 percent of respondents said that corporate integrity is the responsibility of either management, the board, HR or the legal and compliance teams.

What’s important to understand is that these trends are not just social issues with just social consequences.

The lack of personal ownership for integrity, civility and general decency in the workplace puts more responsibility on the organization to enforce those behaviors. Organizational ownership of personal values, however, is more expensive and less effective.

For instance, the EY report also found that the group that did not believe integrity was an individual’s responsibility (i.e., 78 percent of the respondents) were “significantly more likely to act inappropriately, including making cash payments to win or retain business. These same respondents are also more likely to extend the monthly reporting period or change assumptions that determine valuations or reserves in order to meet financial targets.”

These are real compliance failures that can result in very real regulatory enforcement. And while the compliance failure costs may be more easily quantified, it is also critical to raise the flag on the interpersonal consequences and the resulting non-regulatory cost of incivility.

The Continuing Abundance of HR-related Hotline Reports

If we turn to internal company hotlines and incident management systems as our canary in the coal mine, we see the magnitude of real, or at least perceived, incivility in our own organizations. Of all the cases reported to internal compliance hotlines in 2017, 72 percent were HR-related reports. If you look specifically at the accommodation and food services industry, this number goes up to 85 percent.

There are three key takeaways from this reality. First, an inordinate amount of HR and compliance resources are commanded by employees dissatisfied with their experience with others in their workplace as shown by the volume of harassment, discrimination, retaliation, and other interpersonal workplace issues. Many of the reports written off by leaders (and some compliance officers) as nuisance reports or the “my boss is mean to me issues,” are often the early warning signs that something is culturally “off” in a particular location or department. Addressing the root cause of trends in this area can avoid other and more serious violations. Reducing the volume of these cases will also give these departments meaningful time and resources back to focus proactively on building and sustaining a culture of integrity and respect.

Second, interpersonal issues come with a significant amount of emotional weight. How these cases are handled will create either positive or negative emotional ripples through the organization.

When employees do not see themselves as personally accountable for corporate civility, it creates an increased appetite for legal action against the organization.

Third, just the processing of claims of harassment, discrimination and bullying come with a price tag for the organization. As my colleague Scott Nelson stated in his piece, The Era of the Jerk Manager Is Over, “Even if the employee’s claim is legally baseless, it can be expensive for an organization to prove that. A defense attorney might be confident in a win, but it can cost the organization a lot of money to get there.”

When employees do not see themselves as personally accountable for corporate civility, it is easier for them to see themselves in opposition to the organization when things go wrong. This creates an increased appetite for legal action against the organization.

Key Steps for Organizations to Take

Management and leadership must set the expectations for acceptable behavior in the workplace and be responsible for ensuring these traits are owned by each employee at every level of the organization. It is time to raise the bar so that civil treatment in the workplace becomes a non-negotiable for continued employment in all organizations. Following are some key steps for organizations to take.

Define & Commit to Core Values

Define the organization’s core values and then have unwavering commitment to those values. For these values to have credibility, people at all levels of the organization need to be held accountable equally. This is the only way it will work. Employees are always watching who is rewarded and the behaviors these individuals exhibit. If the screaming jerks get the promotions and raises, then this is the type of behavior the organization embraces and it will become the norm. Everybody knows who the offenders are and the level of organizational cynicism is directly related to the accepted behaviors.

In support of core values, I recently had the pleasure of hearing Erica Javellana – Speaker of the House for Zappos – discuss the company’s 10 core values at NAVEX Global’s 2018 Ethics & Compliance Virtual Conference. Most interesting was the company’s specific commitment to hiring and firing on these values.

For instance, if someone is flown into town for an interview, meets performance expectation during the interview, however is disrespectful to the driver taking them back to the airport – that behavior is weighted just as heavily as their work experience and professional qualifications. To be more accurate – respectful behavior is a requisite professional qualification.

Provide Integrity & Civility Training for All Managers & Supervisors

Managers – senior, mid-level and junior – are essential to instilling these values into every faction of the organization. Managers need to be trained on how to have hard and critical conversations in a respectful way with those they manage. The entire org chart of supervisors must also be well aware of not only their personal ethics, but how those ethics are interpreted by employees. Every corporate leader needs to talk the talk and walk the walk.

360-Degree View of Managers

We all know people who are very good at “managing up” but not so good when it comes to respectful interactions with peers or subordinates. One of the most effective ways for an organization to learn about uncivil or bullying behavior is to provide a safe environment for employees at all levels of the manager’s orbit to provide feedback. This is best achieved through 360-degree reviews that showcase the full spectrum of behaviors. Incorporating the ability for anonymous reviews from subordinates is key for honesty and accuracy of evaluations.

Be Present – Professionally, Personally, Emotionally, Mentally, Physically

Finally, civility only exists in the interaction between two or more people. These interactions are being threatened by the rampant dependency on nonessential tech in the workplace. Nonessential meaning, the checking of phones at the beginning of meetings instead of exchanging pleasantries with colleagues; the instant messages instead of desk visits; the emails instead of phone calls.

We all know that it is not respectful to multitask during a conversation, yet this behavior is now commonly accepted. More and more, we – everyone from management to frontline employees – are seeing coworkers as a part of the corporate architecture rather than human beings that share a world outside the demands of the workplace. Successful leaders recognize they are managing people and that respectful relationships between people are critical to organizational success.

If we can move toward re-humanizing business, people will again begin to see themselves as responsible for values like civility, integrity and respect and the cost of incivility to the workplace will decline.  

Download: Top 10 Ethics & Compliance Trends for 2019 eBook.

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