@ Everybody:
Here’s a recent editorial reflecting my earlier comments:
(Read the last line. -kh)

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Stop coddling banker thieves
Today, August 03, 2011, 9 hours ago | Jim Hightower
Stealing is wrong, right? “If you do the crime,” the old slogan says, “you do the time.” But… does everyone?

Let’s suppose that you robbed a Wells Fargo branch bank and scooted away with $5,000. Alas, you get caught, but you cut a deal with prosecutors. Naturally, you’d make restitution, paying back the 5K, plus you agree to a $500 fine. In return, you don’t have to go to jail or even admit guilt, plus you’re allowed to issue a press release blaming the wrongdoing, not on you, but on a “relatively small group” of rogue cells in your brain.

What are the chances of a prosecutor (or Wells Fargo) letting you get away with such a “punishment?”

Zero. But, if it’s Wells Fargo doing the crime, such coddling is the norm in our so-called “justice system.”

Indeed, the financial giant was caught illegally tricking thousands of lower-income families into taking out predatory home loans with exploding interest rates that eventually would cost the families thousands of dollars and their homes. The bankers merrily falsified mortgage documents, and the bank raked in billions of dollars. It was a widespread illegality fostered by Wells Fargo’s top executives.

So, on July 21, Federal Reserve prosecutors handed down justice to these miscreant bankers. Their punishment? An $85 million fine and a $20 million restitution payment – or .001 percent of this behemoth’s annual revenues of $80-billion. Far from jail time, no Wells Fargo banker was even charged, nor did the giant have to admit its guilt – a corporate press release blamed the unpleasantness on a “relatively small group” of low-level employees.

Do the bankers and prosecutors think we don’t see this gross injustice? Banker thievery by Wells Fargo and its aloof peers will not stop until top bankers are made to do the time.

28-19_wnc.mp3

Somehow i don’t see this concept as promoting employee engagement with HR to further retention.

Perhaps risk management is best left to the lawyers and their staff of paralegals who take the ethics line complaints.

Maybe instead of the old suggestion box one could be put in the hall that had a sign that said. “Inform on your co-workers here”. Sort of reminds me of something from back in the 50′s. Wasn’t his name McCarthy?

2) I wouldn’t be surprised if the $579M bribery fine for Haliburton was viewed as a COB- our friends probably made multiples of that in the deal. It’s similar to corporations putting a few million behind “non-partisan” attack ads to swing an election or setting up a corporate/legislative task force to write favorable legislation (http://www.npr.org/2011/07/21/138537515/how-alec-shapes-state-politics-behind-the-scenes). Spend a few million: get a few billion in return. That’s quite a ROI!

3) If you believe that a wish to avoid excessive workplace surveillance is the same as trusting a Bernie Madoff, I believe you are mistaken. Furthermore, organizations like the ACLU, the EFF, EPIC.org (Electronic Privacy Information Center), and the EU (http://www.ibls.com/internet_law_news_portal_view.aspx?id=2079&s=latestnews) may have somewhat different opinions than you re: workplace privacy. As the saying goes: “Transparency in the boardroom, not at the keyboard!”

Cheers,

Keith

Employes are to monitor their own behavior.

In his landmark book, “The Myth of Mental Illness,” Thomas Szasz,Professor Emeritus of Psychiatry at the State University of New York Health Science Center, teaches us that we must operate with a minimum of control from external forces (HR in this case) and a maximum of internal forces. (Our ability to know right from wrong.)

From prohibition yesterday to the war on drugs today, (Yes, we are losing the war on drugs big time) it should be definitively clear that outside forces, even with endless money tossed in for support, do little to curtail abuses in human behavior.

Were the things done in Murdoch’s empire despicable? Of course they were but as long as we, as capitalists, pay our dollar for results that are devoid of both conscience or concern in our sad and crumbling society, there will always be folks who will be glad to get the scoop at any cost.

You and I John; we are at fault as we pay to support the monster and to support the machine.

As an aside, HR, in 99% of organizations, could not do this on their very best day. As it relates to the 1% that can? Who will monitor their behavior?

Trusting all managers to report their own rule violations is simply naive. How well did that work on Wall Street 3 years ago?

The new name for HR may be Employee / labor Risk Management
Identifying execution anomalies in the important areas of costs, quality or corporate values is important to every organization. Fortunately, function, except HR, periodically audits their processes and their results in order to identify and eventually prevent systematic errors. Since most audits find errors “after-the-fact” senior leadership has begun emphasizing a new term, risk management. Risk management is the business term for moving beyond periodic auditing and focusing on proactively identifying, preventing and minimizing major errors. Because almost all risk exposure involves the human element (Donald Norris of Norris & Associates) anyone responsible for human resources needs to be active in identifying, assessing and preventing management and employee risks.

Risk management is necessary because processes and policies occasionally fail to meet their goals and individuals including managers periodically do things (whether purposely or by accident) that can dramatically hurt the business. You can of course wait until these human errors occur before starting to fix them (after the fact) but limiting yourself to reactive measures can be terribly expensive. In customer service and security for example, risks are assessed using “mystery shoppers”. In finance they use formulas or computer algorithms in order to identify possible anomalies. In HR, we are reactive and wait until a potential risk becomes a current problem.

Approaches HR at News Corp. could have used to identify the bad behaviors include:

In the News Corp. example, their behavior primarily involved bribes and the invasion of privacy. Identifying and preventing the use of bribes is a separate strategic function that is quite common in major corporations (for example: Halliburton paid $579 million in penalties as a result of its bribes in Nigeria). The invasion of privacy situation is certainly more unusual but it has already cost of billions in stock valuation and brand reputation. Some approaches that they could’ve used include:

Postmortems – after a major story was won or lost, a neutral combined HR and business team could’ve analyzed what happened (independently re-interviewing sources and reporters). The postmortem would determine if the “victory” came at too high a cost, if the best practices should be more widely spread or to identify the critical factors that caused the story to be lost to a competitor. In the case of News Corp.., a simple examination of your reporter’s phone records would have revealed that they had routinely called these questionable numbers. Whenever an organization or an individual “wins” a disproportionately high percentage of any competitive battle (i.e. Outstanding performance by a baseball player could mean the use of steroids) it is appropriate to look closely for rule or policy violations.

Post-exit interviews – six months after employees involved in high-risk activities leaves the firm, they could be interviewed by a neutral party in order to find out if they witnessed or suspect any wrongdoing. In the News Corp. case, a former reporter actually did reveal the illegalities but the information was provided outside of formal neutral investigative channels.

Anonymous whistleblowing – a process could’ve been set up where employees could anonymously report serious violations of key policies and the follow-up examination would be done by a neutral team within the organization.

A sample test – a common tool among investigators is to expose high-risk managers and individuals to an “opportunity” to violate the rules (TSA uses it all the time to check airport security procedures). A hired investigator could call and offer private information in exchange for a bribe. Or a cooperating famous person could be asked to place a juicy item in their voicemail box in order to see if it ended up in a reporter’s notes or story.

1984 ended long ago
If all of these approaches sound like “big Brother” or “micromanagement” (to idealistic dreamers living in the past), the answer is that these types of risk identification activities are now becoming essential in all large global organizations that face catastrophic risks. Maybe you the reader would simply trust a “Bernie Madoff” type but the new corporate slogan for risk management is “trust but verify” (Ronald Reagan).

My question to the readers is … Is there anything that HR is accountable for on the record?

Cheers,

Keith

Give us an example of how any of the “Murdoch Scandle” could have been monitored in a practical way?