The experts in organizational behavior tell us that when it comes to incentive plans not all employees are created equal. That is, their literature says to tailor those incentive plans individually because what motivates one employee may be a ho-hum for another. For example, those who have just entered the work force will probably jump at an extra \(\$ 10,000\) per year even though the promotion and salary bump will require longer hours. More seasoned employees or employees with family demands might respond, "No thanks. I'd rather have the time at home." Some employees want flexibility while others just want the cash. Some employees work for benefits whilc uthers just want the benefits of work. Good managers respond with appropriate incentives for these different types of employees.

So it is with employees and their moral development. They are not all created equal. Ethics training may be enough for one type. Ethics training for others may be water off a duck's back. The need to begin a process of evaluating employees for their moral development came to mind in the final days of October 2009. Galleon, [at that time] one of the country's largest hedge funds, was a longstanding beneficiary of inside information from employees, traders, brokers, and others. This inside information was then used to create the legendary and unusually consistent returns for which Galleon was famous. Identified in the Galleon-related indictments is the notorious "Tipper A." The tipper is the one providing the inside information, i.e., stock tips, to the tippees, the outsiders who use the inside information to position themselves for market gains in advance of the information's public disclosure.

Who is Tipper A? Roomy Khan. Yes, right out of a Grisham novel comes a character named Roomy Khan, a former Intel employee who, ironically, was under house arrest for six months in 2002 for passing along proprietary inside information about Intel to those who then profited in the market. Mind you, Roomy Khan does not pass along inside info out of the goodness of her heart or a profound belief in the market's need for asymmetrical information. Roomy Khan had to pay back her gains as part of the 2002 case. One cannot help but wonder: Why would someone who has already experienced legal difficulties return to the same behaviors? More relevantly for ethics and compliance officers, why would a publicly traded company hire someone who has a history of passing along inside information? Most importantly, why would any company that hired Roomy Khan not keep a close watch on her activities? And keeping an eye on any stock trades that seem to occur in advance of public announcements would also be a good idea. Ethics training will not have much effect on our Roomy Khans because there is a different psychology at work in her behavior. Understanding that different employees require different compliance techniques is a concept in its infancy stages of development and application. But there is a framework to consider.

Discussion Questions 1. Are you able to place yourself in any of these categories? Why? Give the circumstances that led to your response and behavior.
2. Think of the individuals involved in the cases you have studied so far, and develop a chart that categorizes their behavior according to these types of ethical development.