Sample Case 1

Ethics and Social Responsibility Case

A New Concern for Human Resource Managers: Whistle-Blowing
Each year Time dedicates a front cover of its magazine to a Person of the Year. Last
year, for example, New York City Mayor Rudolph Giuilani was given such an honor for
his handling of New Yorks 9/11 terrorist crisis. This year Time expanded its version of
the person of the year. It dedicated its cover to Persons of the Year. The magazine
identified three women working in unrelated fields who had at least one common
characteristicthey were all Whistle-Blowers.
The term whistle-blower is defined by the third edition of The American Heritage
College Dictionary as One who brings wrong doing within an organization to light.
The etymology of the term whistle-blower is quite interesting and can be attributed to
several sources: the police used whistles in early times as a communication signal and
trains used their whistles to communicate warning signals. Today, the term whistleblower has a mixed meaning: it can have a negative connation in certain sectors with
whistle-blowers being called, among other words, traitor, turncoat, and rat. Or, it
can have a positive connation with whistle-blowers being called heroes.
The three women profiled as Times Persons of the Year fall into that latter category.
They did the right thing by informing their respective bosses of wrongdoings such as
mismanagement, law breaking, and fraud. In essence, these brave women refused to keep
their eyes and mouths closed.
Persons of the Year
Coleen Rowley (FBI); Sherron Watkins (Enron); and Cynthia Cooper (WorldCom)
three career womenall worked for very high profile organizations and all were whistleblowers. Rowley, an FBI staff attorney, after keeping quiet about the agencys
failure to take seriously a situation regarding French Moroccan Zacarias Moussaoui, the
so-called 19th terrorist involved in the destruction of the World Trade Centers in New
York, drafted a memo about the situation and gave copies to FBI Director Robert Mueller
and two members of the Senate Intelligence Committee. Cooper, a WorldCom vice
president, informed the board of WorldCom about inflated profit of nearly $4 billion
through its accounting practices; and finally Watkins, an Enron vice president, informed
Enron Chairman Kenneth Lay about improper accounting methods used by the company.
Like all whistle blowers, these three women placed themselves in very precarious
positions with regard to physical and emotional health, privacy, and especially
employment, since these women were the main financial supporters of their
householdstwo of them had stay at home husbands.
Rowley who had spent nearly 23 years at the FBI and was some two years away from
retirement was subjected to verbal backlashes and criticism from co-workers. Some of

her colleagues compared her to recently convicted FBI agent and spy Robert Hanson.
Fallout from Watkinss letter to Enrons Chairman Lay eventually led her to resign from
her $165,000 job last November. As a result of Coopers revelation, nearly 20,000
WorldCom employees lost their jobs and shareholders lost some $3 billion.
Whistle-blowing has resulted in terrible and even fatal endings. Two examples: in 1976,
Karen Silkwood, a chemical technician at Keer-McGee plutonium fuels production plant
in Crestcent, Oklahoma, paid with her life. She died mysteriously in a one-car automobile
crash after bringing to light problems about falsifying quality control reports on nuclear
fuel rods. More recently, in 1995, Dr. Jeffery Wigand, vice president of research and
development at Brown & Williams Tobacco Corporation, revealed what most people
thought they already knewthere is a causal relationship between tobacco and cancer
and tobacco is addictive; his company fired him summarily. However, he was been
publicly vindicated when his story was aired on CBSs 60 Minutes on February 4, 1996.
For Silkwood, Wigand, and others who willingly tell on the bosses it still means career
suicidewith no applause. As recently as August 2002, a survey conducted by the
National Whistle-Blowing Center in Washington, DC found that 200 employees were
fired after reporting misconduct; others who remained in their companies faced internal
demotions; while others whistle-blowers were blackballed in their industry, unable to find
any work in that sector. Experts have offered four simple questions for anyone thinking
about whistle-blowing. First, the whistle-blower should ask the question: Is this the
only way? Second, do I have the goods? Third, why am I doing this? And finally,
am I ready (for the consequences)?
Just recently the federal government has gone to some lengths to protect whistle-blowers
with the enactment of the Sarbanes-Oxley Act 2002. This act provides whistle-blowers
with legal protection:
An executive who retaliates against a whistle-blower can be criminally
liable and imprisoned for up to 10 years. The Labor Department can order
a company to rehire an employee without going to court. And fired workers
who feel their cases are moving too slowly can request a federal jury trial
after six months.
In addition, under a federal whistle-blowing statute, whistle-blowers are entitled to 14
percent of corporate-government settlements. Douglas Durand, vice president for sales at
TAP Pharmaceutical Products Inc., uncovered a conspiracy to bribe doctors who agreed
to prescribe Lupron, a TAP drug product for prostate cancer. Based on information
provided by Durand about the company and medical doctors conspiring to cheat the
government out of millions of dollars, TAP settled with federal prosecutors for $875
million in fines. Durand won a $77 million settlement as allowed under the federal
whistle-blower statute. Perhaps whistle-blowers now have some rights as a result of the
federal governments actions.

Solution For Case 1

1. To what degree can human resource managers aid whistle-blowers?
Human resource managers play a pivotal role in aiding prospective whistle-blowers.
They can advise them of the possible consequences of whistle-blowing, but more
importantly they can inform them of the laws protecting whistle- blowers. They can
serve as a buffer between whistle-blowers and management; and they can protect
them from possible retaliation and harassment from other employees.
2. Should whistle-blowers be compensated for telling on their bosses and firms?
It might be necessary to compensate whistle-blowers for telling on their bosses and
firms for a number of reasons. First, despite recent laws protecting them, whistleblowers often times get blackballed and are unable to find employment in their field.
By speaking their conscience, they may suffer undo hardships. Second, if employees
know they may be financially rewarded for their actions, they may be more willing to
speak out when wrongdoing occurs within their organization.
3. Is there a better term for whistle-blower?
Although the term whistle-blower has a benign etymology as described in the case
narrative, it does conjure up a negative image. All whistle-blowers are turncoats.
Perhaps by developing a more positive euphemism whistle-blowers will be seem
more positivelypioneers for truth.
4. Should all whistle-blowers be treated as heroes?
The answer should be a resounding yes. But the jury may be out on this one. It may
be a function of time before we know the real effects of whistle-blowing on an
industry, or sector. Moreover, some students may disagree and state that whistleblowers are not heroes because of the fallout that may accompany a whistle-blowing
situation (i.e., loss of jobs, worthless stock). But the actions taken by whistle-blowers
will undoubtedly change the ways in which companies operate.

Sample Case 2
Human Resource Case
Keeping Suzanne Chalmers
Thomas Chan hung up the telephone and sighed. The vice-president of software
engineering at Advanced Photonics Inc. (API) had just spoken to Suzanne Chalmers, who
called to arrange a meeting with Chan later that day. She didnt say what the meeting was
about, but Chan almost instinctively knew that Suzanne was going to quit after working
at API for the past four years. Chalmers is a software engineer in Internet Protocol (IP),
the software that directs fiber-optic light through APIs routers. It was very specialized
work, and Suzanne was one of APIs top talents in that area.
Thomas Chan had been through this before. A valued employee would arrange a private
meeting. The meeting would begin with a few pleasantries, then the employee announces
that he or she wants to quit. Some employees say they are leaving because of the long
hours and stressful deadlines. They say they need to decompress, get to know the kids
again, or whatever. But thats not usually the real reason. Almost every organization in
this industry is scrambling to keep up with technological advances and the competition.
Employees would just leave one stressful job for another one.
Also, many of the people who leave API join a start-up company a few months later.
These start-up firms can be pressure cookers where everyone works 16 hours each day
and has to perform a variety of tasks. For example, engineers in these small firms might
have to meet customers or work on venture capital proposals rather than focus on
specialized tasks related to their knowledge. API now has over 6,000 employees, so it is
easier to assign people to work that matches their technical competencies.
No, the problem isnt the stress or long hours, Chan thought. The problem is moneytoo
much money. Most of the people who leave are millionaires. Suzanne Chalmers is one of
them. Thanks to generous stock options that have skyrocketed on the stock markets,
many employees at API have more money than they can use. Most are under 40 years
old, so they are too young to retire. But their financial independence gives them less
reason to remain with API.
The Meeting
The meeting with Suzanne Chalmers took place a few hours after the telephone call. it
began like the others, with the initial pleasantries and brief discussion about progress on
the latest fiber-optic router project. Then, Suzanne made her well-rehearsed statement:
Thomas, Ive really enjoyed working here, but Im going to leave Advanced Photonics.
Suzanne took a breath, then looked at Chan. When he didnt reply after a few seconds,
she continued: I need to take time off. You know, get away to recharge my batteries.
The projects nearly done and the team can complete it without me. Well, anyway, Im
thinking of leaving.

Chan spoke in a calm voice. He suggested that Suzanne should take an unpaid leave for
two or maybe three months, complete with paid benefits, then return refreshed. Suzanne
politely rejected that offer, saying that she needs to get away from work for a while.
Thomas then asked Suzanne whether she was unhappy with her work environment
whether she was getting the latest computer technology to do her work and whether there
were problems with coworkers. The workplace was fine, Susanne replied. The job was
getting a bit routine, but she had a comfortable workplace with excellent coworkers.
Chan then apologized for the cramped workspace, due mainly to the rapid increase in the
number of people hired over the past year. He suggested that if Suzanne took a couple of
months off, API would give her special treatment with a larger work space with a better
view of the park behind the campus like building when she returned. She politely thanked
Chan for that offer, but it wasnt what she needed. Besides, it wouldnt be fair to have a
large workspace when other team members work in small quarters.
Chan was running out of tactics, so he tried his last hope: money. He asked whether
Suzanne had higher offers. Suzanne replied that she regularly received calls from other
companies, and some of them offered more money. Most were start-up firms that offered
a lower salary but higher potential gains in stock options. Chan knew from market
surveys that Suzanne was already paid well in the industry. He also knew that API
couldnt compete on share option potential. Employees working in start-up firms
sometimes saw their shares increase by 5 or 10 times their initial value, whereas shares at
API and other large firms increased more slowly. However, Chan promised Suzanne that
he would recommend that she receive a significant raisemaybe 25 percent moreand
more stock options. Chan added that Chalmers was one of APIs most valuable
employees and that the company would suffer if she left the firm.
The meeting ended with Chalmers promising to consider Chans offer of higher pay and
stock options. Two days later, Chan received her resignation in writing. Five months
later, Chan learned that after a few months traveling with her husband, Chalmers joined a
start-up software firm in the area.

Solutions For Case 2

Human Resources Case Note

Keeping Suzanne Chalmers
Case Topics: Motivation, job design, money and rewards
Case Synopsis
This case describes a meeting with software engineer Suzanne Chalmers and Thomas
Chan, the vice-president of software engineering at Advanced Photonics Inc. (API).
Chalmers arranges the meeting to indicate her intention to leave API. Chan tries to keep
her by offering better conditions and, eventually, more money and share options. But
Chan knows that Chalmers is already a millionaire from her share options and the
appreciation of APIs share price. The case highlights the difficulty in motivating people
to stay and the relative importance of financial rewards compared to other sources of
motivation. Soon after the meeting, Chalmers submits her resignation and, after a few
months rest, takes up a position at a start-up company.
Discussion Questions and Suggested Answers
1. Why didnt money motivate Suzanne Chalmers to stay with APL?
In this particular situation, the needs fulfilled by money (mainly physiological, safety,
and social) were not strongest for Suzanne. Instead, it seems that Suzanne required
more self-actualization, particularly work with more variety and challenge. The job
seems to be getting routine. Moreover, she later took a job at a start-up firm where
she probably performed a wider variety of tasks.
2. Do financial rewards have any value in situations such as this, where employees are
relatively wealthy?
Yes, most people value money even when they have enough. The textbook explains
that money affects employee motivation in complex ways. It satisfies most needs to
some extent. For example, Chalmers might value a special bonus or pile of share
options for completing a special project. The money is valued for its symbolism, not
as much for what it buys.
At the same time, the facts in this case suggest that money has relatively low
importance to Suzanne. She didnt mention money at all in the meeting, except in
response to a question from Chan. She has been offered several jobs with more
money (or higher potential appreciation of share options.
3.

What innate drives seem to be motivating Suzanne Chalmers?

All drives operate in everyone, with the drive to defend most active only when the
person is threatened. However, it seems that the drive to learn is probably the most
important one for Suzanne in this situation because she subsequently entered a new
job with a variety of job duties. Students might also suggest that the drive to acquire

is apparent; specifically that she wants to acquire new experiences. At the same time,
Suzanne definitely does not have a drive to acquire material goods such as money or
physical resources. Moreover, she doesnt express a strong drive to bond, particularly
since she is motivated to leave APL.
4. Of what importance is job design in this case?
Possibly a great deal. In-between the lines, Chalmers seems to indicate that her work
is becoming a bit too routine. The case indicates that people rarely move around to
different jobs at API. Instead, the company prides itself at keeping employees
focused on their specialized area of expertise. While this may be desirable for many
employees, there are indications that Suzanne might want a career change or at least a
break from her usual work. Even people in complex jobs can get tired of their jobs if
they are very narrowly defined.
Another piece of evidence that job design is important here comes from information
about the company Chalmers joined. She joined a start-up firm, likely one (as Chan
explained) where employees perform a variety of work. We cannot say for certain
that this variety motivated Chalmers to join a start-up firm, but it may be a factor.
5. If you were Thomas Chan, what strategy, if any, would you use to motivate Susan
Chalmers to stay at Advanced Photonics Inc?
As the previous question suggests, I would look more closely at job design and career
issues. There is some evidence that Chalmers wants to do something different from
IP software engineering. The job seems to be getting routine. Moreover, she later
took a job at a start-up firm where she probably performed a wider variety of tasks.
Chan should have explored these needs with Chalmers. Instead, he focused on
working conditionsthe size of office, financial compensation, etc.