Incentives and sanctions for compliance with rules can have a controlling effect. The use of these Control mechanisms are possible internally by the company but also externally by competent authorities.
If companies reward and punish their employees for complying with or failing to comply with rules in the right way, the opportunity for a good audit result of the compliance management system increases. Conversely, opponents should not be able to interfere with the effectiveness of a compliance management system through opposite incentives.
Understanding about punishment measures in the detection of violations of rules provides a great setback force for employees. At the same time, threats make it more difficult to expose crimes. This conflict requires careful consideration between consistent intervention and full enlightenment.
In order to promote and enforce lawfulness, incentives and sanctions can be used.
Integration of compliance sanctions
Internal sanctions should be compatible with labour law rules. With the sanctions and incentives, a company should also work continuously and treat all employees equally.
If it is sufficient in a small company for the immediate supervisor to impose sanctions, it can be better in larger companies if the legal department and the compliance department take care of it together with the superior. Therefore, jurisdiction should be clarified for the sanctioning procedure.
Zero-tolerance policy in compliance rules
If a company threatens to punish any breach of compliance, this is what the compliance expert calls zero tolerance policy. This handling of infringements can be completely correct in one company, but in another company it can make the clarification of violations almost impossible – that depends on the compliance culture.
Possible penalties for violations of compliance
From termination without notice to warning, there are a number of sanctions that are compatible with labour law. If the penalty is provided for in the employment contract, the company may, for example, recover the bonuses. Another measure may be that an employee who does not comply with the rules risks his promotion or even the workplace.
The internal investigation should take into account the following factors for the assessment of the infringement and the penalty to be determined.
- What is the role of the employee?
- What is the role of pre-laws?
- Did the employee act intentionally or negligently?
- Is it the first time the employee commits a violation?
- Is the employee involved cooperating in the investigation of the case?
- Did the employee take part in compliance training?
Compliance incentives to comply with compliance rules
A system of rewards for compliance with rules can be created through financial incentives or special other grants.