Individuals as Enforcers: The Design of Employee Reporting Systems

Abstract

This chapter presents a unique perspective on whistleblowing, combining behavioral and organizational perspectives of employee motivation to engage in social enforcement. The chapter is based on a series of experimental studies conducted by the collaborators. In our studies, we analyze the interactions among several types of factors. First, we describe cultural differences and the ways a country’s attitude and history affect decisions to blow the whistle. Second, we systemically show complex motivations in the decision to report misconduct, including both intrinsic and extrinsic factors. Third, our experiments provide unique insights about the design of the law and the various incentives it can offer to support social enforcement. The studies improve our understanding of the costs and benefits of different regulatory systems and the inadvertent counterproductive effects of certain legal incentives. Based on these studies, the chapter explores the comparative advantages of various incentive structures and aim for a better fit between regulatory design and organizational and individual motivation, not only in compliance as many of the other chapters in this volume suggest but also in reporting the incompliance of others.