The theories of Nobel prize-winning economist Richard Thaler could help stop the next Harvey Weinstein

Under his eye.
Under his eye.
Image: Reuters/Brendan McDermid
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Recent allegations surrounding former Miramax chief Harvey Weinstein make clear that confronting a sexual predator at work, particularly a senior executive, is extraordinarily difficult.

The imbalance of power places a heavy burden on women to report inappropriate behavior, and as described in the New Yorker, they can pay a heavy price even for rejecting advances. When individuals sit at the center of enterprises built around their talents, connections, or money—like Weinstein, Bill O’Reilly, Bill Cosby, or Roger Ailes—they may feel even more entitled, and less concerned about consequences. After all, who’s going to challenge the guy who’s name is on the building?

One way to rebalance power in organizations is to use the “nudges” theorized by Richard Thaler, the University of Chicago economist who won a Nobel prize on Oct.9. Nudges are slight shifts in policy that harness our understanding about human behavior to make it easier for people to take actions that benefit themselves or society. In one popular example, companies—recognizing that not enough employees plan for retirement—might automatically enroll new hires in 401 (k) savings accounts, letting them opt out rather than requiring them to enroll.

Similar nudges could help root out sexual harassment by repositioning it from a problem that seldom occurs to one that’s likely to happen. Given the prevalence of harassment—as many as 75% of women report unwanted sexual attention at work, depending on how the question is asked—companies should expect incidents, and develop plans to address them before they happen.

Remind employees that sexual harassment happens, and that would-be harassers can prevent it

Modern factories are zealous about employee safety, because it’s smart business and because their insurers and the law require them to be. They put up posters telling workers how many days have passed since the last accident, reminding them that accidents are frequent, and that their prevention is  a shared responsibility.

Posting notices in the break room about the number of harassment-free days might feel heavy handed, but it would keep the issue in front of employee. A more subtle reminder would be to require senior executives to periodically sign declarations that they won’t engage in abuse. Research shows that when people are reminded of their ethical duties—like signing an honor code before taking a test—they’re more likely to uphold them.

Does everyone know there’s a hotline?

All organizations should have hotlines in place for anonymously reporting harassment or suspicions of illegal behavior. (They’re already are required at publicly traded companies.) But those hotlines can go unused—Fox said no one called its line to complain about O’Reilly, for example—in some cases because employees are unaware the hotlines exist. Too often, companies will make a passing reference to it during orientation, and leave references to the number buried in a thick employee handbook. Instead of hoping they’ll remember it’s there when they need it, companies should proactively inform workers about the reporting mechanisms available to them. A message from the CEO reminding staff could go a long way toward setting the tone about its importance.

Actions speak louder than words

Ultimately, no reporting mechanism works unless the organization takes action when incidents are reported. One of the dispiriting lessons of Fox News—where O’Reilly and Ailes allegedly harassed women for years—is that the patterns of abuse were widely known by employees who had no faith the company would act.  Organizations send messages about the behavior they value by who they choose to promote, and who they let go, says Amy Wrzesniewski, an organizational-behavior professor at the Yale School of Management.

Firing a CEO is never an easy decision for a board, particularly when it’s over allegations of sexual misbehavior. But it’s not unheard of: Boeing, Hewlett-Packard, and Starwood are among the companies that ousted CEOs after it was revealed they had inappropriate relationships with female employees (in some cases, it was their attempted cover up, not the initial behavior, that got them in trouble). The companies all took short-term hits to their reputations, but in the long term, their employees are doubtlessly more confident complaints about harassment will be taken seriously.