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What Operational Risk Management Can do for a Hostile Work Environment

By David Epstein, Ed.D.

A hostile work environment presents many different risks to organizations, some obvious and some less so. An example of an obvious risk is litigation. Failure to properly address a hostile work environment complaint can lead to costly litigation, which includes not only lawyer’s fees but also the costs of investigations and possible settlements and jury awards. Management reacting poorly to a hostile work environment complaint can also lead to retaliation claims, more litigation, and issues with the EEOC.

Risk management is the process of identifying, assessing, and mitigating potential threats to an organization. Some of less obvious risks in a hostile work environment lays in the climate and culture of the workplace leading to lack of productivity, attrition, and misconduct. A dissatisfied workforce is more likely to leave, leading organizations to lose the time and financial investment in training and development. Employee attrition has a high operational cost, as not only does the organization lose a skilled employee, but they now have to invest time in finding and training a new employee who may also leave quickly due to the poor workplace environment. Additionally, unhappy employees simply do not perform well – organizations with high employee satisfaction outperform those with low satisfaction by over 200%.

How can operational risk management mitigate the risk of a hostile work environment? Through a multipronged approach, starting with recruitment, screening, and hiring procedures. Attracting not only good candidates, but the right candidates. From there, having excellent onboarding and training procedures will ensure that the new employees receive the appropriate skills and introduction to the workplace culture. This process and how it is handled will set the stage teaching the new employee for what is appropriate and what is not. However, there is no amount of policies and training that will override what the new employee witnesses – they will take their cues from the actions of the other employees.

What else can operational risk management do for a hostile work environment? It is important to have clearly written policies and procedures for your organization. Further, these must be clearly communicated at hiring and thereafter, annually. By having appropriate policies for performance management and disciplinary procedures, an organization can identify performance, conduct, and dissatisfaction issues and work to address them before they spiral out of control. Organizations should also be ensuring that not only are the policies and procedures in writing, but that they are signed and acknowledged by all employees. Risk management means not only working to prevent workplace incidents but documenting all risk prevention efforts thoroughly in case of litigation. 

Finally, it is not enough to simply provide written policies. Training is an essential part of managing risk. Training on many subjects, such as sexual harassment and discrimination, workplace safety, and other relevant topics will greatly reduce the chances of workplace incidents. Training can also provide an added layer of protection should an incident happen by showing your organization and managers provided all the necessary communication, training, and tools to prevent the incident. In the case of adverse employment decisions, being able to show that every effort was made to provide training and education to the employee will also help mitigate risk.


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