structured reporting process will probably provide the most return on investment in promoting employee reporting.
However, in making hiring and promotion decisions, the company may
also want to give some thought to
employee personality, although there
is not much that an organization can
do to influence it.
Whistleblowers seem to engender
some common character traits that
include personal courage and honesty.
Some research has also posited that
employees’ locus of control may be an
important determinant of their propensity to report. According to psychology
researcher Julian B. Rotter, the locus
of control involves employees’ beliefs
about whether the outcomes of their
actions are contingent on what they
do — internal orientation — or on
events outside their personal control —
Instruments such as the Reid Report
developed by criminologist John E. Reid
and the Personnel Selection Inventory
published by Pearson Reid London
As a rule of thumb, the greater the distance
the communication must travel and
the more links it must go through,
the more likely it is that it will be inhibited.
House are available to assess employee
honesty. Locus of control can be measured with such tools as the Locus of
Control and Attribution Style Test,
which is commercially available from several companies that specialize in personnel testing.
Measuring courage, however, is
more difficult, although some efforts
are being made by groups like the CDR
Assessment Group, which has developed a tool for assessing the courage
of leaders. Ultimately, the ideal would
be to have a sufficiently safe reporting
process so that reporting of fraud
would not require an extraordinary
level of courage.
ORGANIZATIONAL STRUCTURE The complexity of the organizational structure
may also influence an employee’s willingness to report. Structural attributes
that affect reporting can include the span
of control, the number of hierarchies,
the number of subordinates reporting
to each manager, and the extent to
which the chain of command is distorted or restricted.
As a rule of thumb, the greater the distance the communication must travel and
the more links it must go through, the
more likely it is that a communication
will be inhibited. When communication
is constrained, employees are prone to
report externally, as opposed to inter-
INTERNAL AUDITOR FEBRUARY 2004