The Negative Effects of Whistleblowing Rewards and Protecting the Identity of the Whistleblower on Subsequent Cooperation

• In Event: Work Environments for Auditors and Whistleblowers

Abstract

Companies are strongly encouraged to implement whistleblowing programs to help detect and deter misconduct in organizations. Rewarding the whistleblower and protecting the whistleblower’s identity are two highly recommended features of whistleblowing programs. I use two experiments to examine the spillover effects of these whistleblowing program features on how willing employees are to cooperate with their co-workers, both the whistleblower and neutral co-workers who did not observe misconduct or blow the whistle. I find that people prefer to cooperate less with a whistleblower than with a neutral co-worker (the “whistleblower effect”). In addition, I find that providing a reward to the whistleblower results in even less cooperation with the whistleblower (the “reward effect”). Finally, I find that protecting the identity of the whistleblower removes the reward effect but does not remove the whistleblower effect. When employees do not know the identity of the whistleblower, they act as though all of their co-workers could be whistleblowers and, thus, are less willing to cooperate with all of their co-workers. My results contribute to the literature on whistleblowing and highlight that caution should be taken when determining whether to reward whistleblowers and protect their identities.

Author

• Ryan David Sommerfeldt, University of Illinois-Urbana-Champaign