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HR’s Role in the Wells Fargo Debacle

wells_fargoBy now we’ve all heard numerous tales of the fake accounts created by Wells Fargo employees in order to meet unrealistic sales quotas and the subsequent firing of more than 5,000 as a result. Millions of phony deposit accounts. Hundreds of thousands of phony credit card accounts. Phony pin numbers and email addresses too.

If you’ve ever worked in an environment where meeting goals, especially sales quotas, was given high priority, then you know what that type of culture can breed. Even the best of employees can engage in dishonest practices when their paycheck is on the line.

The workplace psychology experts at the Faas Foundation say that the bank is a perfect example of systemic bullying, defined in this case as “setting unreasonable expectations to get rid of employees who do not deliver and causing others to resort to questionable practices to meet the expectations.”

As more details become available, it turns out that the fraudulent accounts weren’t the only issue. If we’re talking about things that fit the definition of phony, perhaps we need to look at the company’s Code of Conduct and its Ethics Hotline as well.

As the dust settles around this case and the investigation and hearings play out, we find a CEO who assumes little to no responsibility, customers who are due recompense, hundreds of millions of dollars in fines assessed and past employees whose voices are finally being heard. From these past employees we now know that multiple attempts were made to blow the whistle on these fraudulent accounts through calls to the company’s ethics hotline and emails to their human resources staff. In return for following the company’s ethics policies (let’s not mention the law!), those employees were reportedly rewarded with termination[1].

Reporting under the condition of anonymity, a former Well Fargo Human Resources employee told reporters at CNNMoney that the bank had a plan in place to retaliate against those who used the tip line for reporting sales related issues. To make a long story short, the HR staff helped managers find ways to fire those tipsters.

All of this only proves what we already know: The existence of a code of conduct isn’t enough to create ethical behavior. The code must be also enforced and supported by company culture. And if a company’s upper management isn’t enforcing the code, then it is HR’s job to do so.[2]

Enforcement is one thing, but creating a supportive company culture is another. The experts at the Faas Foundation suggest that not only was the culture at Wells Fargo not supportive, but that it actually had all the necessary components of a hostile work environment (unreasonable expectations put on employees, an acceptance of questionable practices, and reluctance to complain out of fear of retaliation). According to Andrew Faas of the Foundation, “Wells Fargo has a much bigger issue than the fraudulent accounts—they have a culture of fear. If this is validated, it puts to question the credibility of their leadership’s response[3].”

Pointing the finger directly at the CEO is easy and justified, but it doesn’t change this simple fact: A very different story would be playing out in the news right now if the HR staff had been responsive to the complaints and willing to take a stand the very first time they heard of a violation.

This extends beyond HR’s role in building corporate culture, helping managers with realistic goal setting and providing code of conduct training. If the accounts of former employees are true, then complaints from internal whistle-blowers were communicated to Wells Fargo’s HR staff many times over the past several years.

While standing up to corporate executives requires tremendous courage, it is a professional responsibility of HR professionals to do so. We, too, are safeguarded by laws that provide strong protections for those who face retaliation for reporting these issues up the chain of command.




[1] https://my.capital.org/community/advice-resolution/newsletter/blog/2016/09/26/retaliation-lessons-from-the-wells-fargo-debacle

[2] https://www.shrm.org/ResourcesAndTools/legal-and-compliance/employment-law/Pages/Wells-Fargo-code-of-conduct.aspx?utm_source=SHRM%20Wednesday%20-%20PublishThis_HRDaily_7.18.16%20(15)&utm_medium=email&utm_content=September%2014,%202016&SPMID=&SPJD=&SPED=&SPSEG=&spMailingID=26504954&spUserID=ODY2OTYwOTQ1NDkS1&spJobID=882202904&spReportId=ODgyMjAyOTA0S0

[3] https://www.fastcompany.com/3064175/how-wells-fargos-cross-selling-scandal-grew-out-of-workplace-culture

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