Compliance 101 -- Motivating Employees

This is the next installment in my series covering the major changes from the November 2004 amendments to the organizational sentencing guidelines.  This week I cover the new guidelines’ treatment of incentives for participating in the compliance program.

When it comes to motivating employees, the original sentencing guidelines (in Application Note 3(k)(6) to section 8A1.2) spoke only in the negative: "The [company's compliance] standards must have been consistently enforced through appropriate disciplinary mechanisms, including, as appropriate, discipline of individuals responsible for the failure to detect an offense."   The amended guidelines (in section 8B2.1(6)) add the carrot to this stick:

The organization's compliance and ethics program shall be promoted and enforced consistently throughout the organization through (A) appropriate incentives to perform in accordance with the compliance and ethics program; and (B) appropriate disciplinary measures for engaging in criminal conduct and for failing to take reasonable steps to prevent or detect criminal conduct.

The Commission explained that this amendment imposes "a duty to promote proper conduct in whatever manner an organization deems appropriate."  For example, instead of simply evaluating employees on whether their job performance meets certain tangible measures, the organization might also ask how the employee went about achieving those measures.  Did the employee act in a manner that promotes the organization's ethical values?  If so, the employee should be rewarded.