22 October 2010

HR PRACTICE - A good risk management culture – an antidote for bullies

Bullying is considered to be any type of offensive or intimidating behaviour. It is an abuse of power with the intention to humiliate, undermine, injure or denigrate the other person. Whether it occurs in the playground or at the workplace, bullying can have a huge impact on the individuals concerned. While it can have tragic consequences on individuals, bullying can permanently damage businesses.

For an employee that has been exposed to bullying the impact can be devastating as the employee can suffer both social and mental health problems. Organisations also suffer hugely from bullying. Most will suffer from an increase in staff absenteeism, a decline in employees’ morale, a drop in productivity and an increase in staff turnover. Businesses might also incur additional costs associated with legal and workers’ compensation as well as management time addressing cases of workplace bullying. In addition, businesses will also suffer from having to incur further costs of retraining and it will eventually become harder for them to attract talent. Finally, organisations can incur fines under breaches of occupational health and safety laws.

Stephen Bonnici, HR Manager for Mizzi Organization stated: “Bullying can be costly to businesses. Some of the risks for organisations are losing talented and skilful employees, a reduction in productivity as well as incurring risks and costs associated with legal proceedings which might also affect the company’s reputation.”

Joe Gerada, CEO of FHRD said that he was called in by companies on a number of occasions to deal with such issues as managers would often either not have the training or the time to mediate in the situation. Such mediation is part and parcel of a risk management culture and in most situations the respective companies avoided some very embarrassing situations.

Hence, bullying is a huge financial risk to businesses. It can be considered to be part of a poor risk culture. Former Insurance Australia Group (IAG) chief risk officer Tony Coleman states: “It’s a culture where bosses tend not to want the hear bad news or the culture is to cover bad news up or a shoot-the-messenger type of culture.”

Hence, a poor risk culture dominates in organisations where bullying is ignored. If ignored long enough, the entire organisation is placed at risk, as it faces preventable trauma or litigation. According to a 2007 survey carried out by Utica, New York based market research firm Zogby International, 62 per cent of employers ignore the problem of bullying. Unfortunately, it is very much the case that when organisations ignore bullying they can also ignore other danger signals such as high turnover. Stephen M. Paskoff, a workplace consultant to global companies such as Coca-Cola and Nike, said: “Employers tend to ignore bullying particularly if it is someone who is a great performer.”

Furthermore, Paskoff argues that “even if the bully is a strong performer, the problem is that the behaviour loses clients and costs the company business. Or, in a health care setting, it can cost a life.”

Paskoff also commented on how organisations ignore behaviours such as bullying that are not clearly illegal.

Unfortunately, bullying in the workplace is very often subtle or hidden. Either way it does not mean that bullying does not exist. It is up to the employer to take the initiative and be proactive by developing the right culture and systems whereby it is able to identify whether bullying exists or whether it has the potential to exist within the organisation. Bonnici mentioned the systems that Mizzi Organisation has put in place to prevent and stop bullying from occurring within the business:

“We carry out performance appraisals, one-to-one meetings with employees, open discussions; we have appointed employee representatives to act as a medium to report on acts of bullying on behalf of the employees. We also have policies and procedures in place that clearly state that such behaviour is not tolerated. “

Joe Gerada CEO of FHRD said organisations need to ensure that they develop a good risk management culture that helps to identify and spot cases of bullying in the workplace. This includes creating an environment where intimidation is not tolerated. This needs to be formalized through the core values and employment guidelines, which help to minimize, if not eradicate bullying. Businesses need to have systems and structures in place that allow them to spot bullying happening and do something about it and make the management staff aware that it is being monitored. Employers need to make sure that they watch out for certain danger signals which can suggest that bullying is taking place such as complaints about stress and depression, high turnover, lots of sick leave, and absenteeism. It is also crucially important that a culture of trust and respect dominate within the organisation.

Businesses today cannot afford to turn a blind eye to bullying in the workplace. This is because demoralised workers will vote with their feet and bullying will probably cost thousands of euros in increased absenteeism, staff turnover as well as decreased productivity. Hence, bullying needs to be managed by identifying and solving the problem rather than by denying and ignoring it. Managing bullying hence becomes part of developing a good risk culture within the organisation.


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