The Role of the Human Resource Management Department in Internal Investigations
Kemery, Edward R., Business Renaissance Quarterly
Typically, the role of the human resource management (HRM) department does not involve investigation of misconduct beyond operational matters, it is not thought of as important to the risk management process. This article addresses how the HRM department can play a major role in internal investigations by developing policies and procedures, training employees in their use, as well as being called on to be an active participant in investigations. It is argued that efforts such as this, when supported by the "tone at the top," can assist in creating and sustaining an organizational culture that discourages misconduct.
The human resource management (HRM) department can play an important role in internal investigations from the initial complaint through to its resolution. Though not usually thought of as a major player in reducing an organization's risk exposure, the HRM department sometimes finds itself front-and-center in addressing employee misconduct. And, how these matters are handled can profoundly affect an organization, its members, and its reputation.
Primary functions typically ascribed to an HRM department include recruiting, screening job applicants, managing payroll and benefits, maintaining fair employment practices documentation, and conducting training and development (Dessler, 2009). While typically not considered as being involved in risk management (a function usually relegated to finance and accounting), the HRM department can contribute to reducing an organization's risk exposure due to employee misconduct through developing policies and procedures to address misconduct, publicizing them, and training employees in their implementation.
Misconduct in organizational settings creates risk exposure that may create severe, and sometimes, irreparable damage. The ill-fortunes of Enron and WorldCom are well-known examples of the devastating impact from when employees cross the line. However, these are not isolated instances. The Association of Certified Fraud Examiners (2008a) estimated that nearly 7% of an organization's annual income is lost due to fraud-related activities. And, according to another recent study, employees reportedly observed, on average, nearly three instances of organizational misconduct in the preceding year. The range of misconduct included falsifying records, stealing, lying, and engaging in abusive or intimidating behavior or discrimination (Anreoli & Lefkowitz, 2008). Furthermore, these acts of malfeasance are found across many professions (Coburn, 2006).
Upon observing misconduct, an employee (or other organizational stakeholder) might decide to bring it to attention of organizational authorities. After deciding to report an offense, the human resource management (HRM) department may be the recipient of a formal complaint. Depending on the size and resources available to the organization, and the nature of the matter, the complaint might be passed on to an internal investigation group. However, if such resources are limited, nonexistent, or the offense is within its purview, the HRM department will be involved in the complaint's investigation (Cook, 2008). 1 Thus, those in the HRM department must be knowledgeable about aspects of investigation, including documenting complaints, interviewing complainants, witnesses, and suspects, collecting and preserving evidence, and deciding when to involve others in the process.
However, the HRM department may not be the first place an employee goes with a complaint. The employee may confide in a coworker or perhaps their supervisor, and the response they receive, may impact the employee's decision regarding how to proceed with the complaint. Particularly with respect to supervisory notification, how the complaint is addressed could have significant legal ramifications. Thus it is important for supervisors, as well as rank-and-file employees, to be knowledgeable about organizational policies for handling misconduct complaints. …