Wednesday, 06 June 2018 21:00

Workplace Harassment Can Impact Corporate Culture AND Compensation

Written by Cassandra Faurote

Workplace harassment – which is not necessarily limited to sexual harassment – is being recognized as far too commonplace. It seems like every day another high-profile person is accused of improper behavior, misconduct or worse. Now, the #MeToo and #TimesUp movements have given voice to victims and those who seek to empower the powerless. But workplace harassment isn’t just a Hollywood issue or a Fortune 500 problem or even merely a political hot potato; it’s a toxic reality that can poison any corporate culture and impact top-to-bottom compensation. Here’s why corporate leaders, HR departments, and compensation professionals must take workplace harassment seriously:

How Workplace Harassment Differs from Sexual Harassment

While sexual harassment is the issue most often spotlighted, it is not the only type of misconduct in the workplace that can jeopardize corporate culture and a company’s bottom line. Other forms of harassment your company could be liable for include bullying and tolerance of a “toxic” environment. Whenever a member of a protected legal class feels threatened, victimized, marginalized, demeaned or mistreated, workplace harassment could be a factor. However, even if an affected individual is not part of a protected class, your company could still be at risk for harassment claims, legal actions, and damage to your brand and corporate culture.

An Issue of Power

Corporate harassment or misconduct typically has, at its root, the issue of power. For example, harassment may be encountered when one person tries to use their position or organizational influence to exert undue pressure over another in a way that leads the victim to feel threatened or helpless. In the past, many victims (most often, women) have believed they had no recourse to speak up or file a complaint. The #MeToo and #TimesUp movements have made many victims aware they are not alone; but those currently speaking out may be just the vocal minority, with many more remaining in the shadows.

The Impact on Compensation

In addition to damaging your company’s brand and culture, employee and executive compensation could be at risk, too. After all, if your company must spend untold (and likely unbudgeted) funds to defend against harassment claims, all financial buckets may need to be tapped to help pay for investigations or defense. Don’t count on Workers Compensation insurance to help defray bottom-line expenses related to workplace harassment, either. According to the Workplace Bullying Institute, in most states, Workers Compensation insurance is unlikely to cover claims of workplace harassment that have psychological causes and effects.

If harassment claims are found to be true, of course, monetary damages may be awarded to the victim(s). And don’t forget that if your workplace is seen as discriminatory or toxic, you might have difficulty recruiting talent within market rates.

How to Minimize Risks Associated with Workplace Harassment

It has never been more important to take positive and pre-emptive action to guard against workplace harassment. Baseline measures include strengthening your company’s policies and practices, and nurturing diversity and respect for all. It is also crucial to improve transparency, reporting, prevention and compliance. Ultimately it is essential to create an environment where HR is considered a trusted ally. This takes commitment from corporate leaders and HR professionals.

It can also help to perform a “cultural audit” to discover problem areas and use the findings to shape anti-harassment workplace training. This could be especially important because the Equal Employment Opportunity Commission (EEOC) recently made prevention of “systemic harassment” a strategic Enforcement Plan goal. Their Plan notes that “more than 30% of the charges filed with EEOC allege harassment.” What’s more, “the EEOC believes a concerted effort to promote holistic prevention programs, including training and outreach, will deter future harassment.” Thus, it seems prudent to conduct anti-harassment or workplace respect training annually or at least every two years.

Bottom Line:

Workplace harassment is a big problem that can no longer be swept under the rug. But as victims feel empowered to speak out and demand justice, the risks for corporations are significant. Not only might their brands and corporate cultures suffer, they can also incur increased costs for recruiting and retention. So, it is crucial that corporate leaders commit to fostering workplace environments where employees feel valued and respected, but never threatened, marginalized or powerless.

NAWBO member Cassandra Faurote is founder and President of Total Reward Solutions, a compensation, benefits, performance management, and reward/recognition consulting firm.

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