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When Doing the Right Thing Is Penalised

By Alexandra Salamis M.A., M.S.W., ICF, EMCC, CEC, CCMP Article C6.4

Organisations in transformation regularly ask people to do things that carry personal cost.

Surface the problem early. Follow the new process even when it is slower. Flag the risk before it becomes unavoidable. Prioritise long-term adoption over short-term results. These are the right behaviours. They are also, in many organisations, the behaviours that carry the highest personal exposure. When doing the right thing is penalised, people stop doing it.1 Not because they are uncommitted, but because the organisation has made commitment costly.2

What penalisation actually looks like

Penalisation is rarely explicit. No one announces that surfacing problems will damage your reputation.3 No memo instructs people to protect their targets at the expense of adoption. No leader formally endorses the view that following the new process is optional when under pressure.

But penalisation does not need to be explicit to be effective. It operates through pattern.

The person who flagged the risk early becomes associated with the problem rather than with prudent governance. The team that followed the new process and missed its target is treated the same as the team that ignored it and delivered. The manager who pushed back on an unrealistic timeline is remembered as difficult rather than diagnostic. The individual who escalated a concern is quietly managed out of the conversation. Each of these is a small event. Collectively, they constitute a clear signal about which behaviours are safe.

Why the pattern is structural, not interpersonal

When individuals are penalised for doing the right thing, the instinct is to attribute it to specific leaders or cultures. That attribution is usually incomplete.

The leaders involved often did not intend to penalise good behaviour. They were responding to performance pressure, political exposure, or the need to protect programme momentum. The system placed them in a position where the right organisational behaviour was the risky personal choice, and they acted accordingly. This is why replacing individuals rarely fixes the problem. The next person in the same structural position faces the same constraints and makes similar choices.

Penalisation of right behaviour is a design problem. It reflects incentive structures, performance consequences, and risk distribution that systematically make correct behaviour costly and incorrect behaviour safe.

The compounding effect

Once the pattern is established, it compounds quickly. People who have been penalised once do not repeat the behaviour. People who observed the penalisation do not begin it. Over time, the organisation loses access to exactly the behaviours it most needs:4 honest escalation, early problem surfacing, fidelity to new processes under pressure, and willingness to absorb short-term cost for long-term value. What remains is a form of adaptive compliance — people doing enough to avoid scrutiny while protecting themselves from the costs that genuine commitment would carry. The change appears to be progressing. The conditions for it to succeed are quietly eroding.

What this does to professional judgement

The most significant cost of penalising right behaviour is the compression of professional judgement.

People in organisations where right behaviour is costly learn to hold their judgement in reserve. They know what they think, but they do not say it. They see what is happening, but they do not escalate it. They understand the risk, but they do not surface it until the evidence is undeniable — which is often too late to act cheaply. This compressed judgement is not cowardice. It is a rational response to an environment that has consistently demonstrated that exercising judgement carries personal cost. Organisations that penalise right behaviour progressively lose the benefit of the judgement they are paying for.

Why this is an enterprise risk, not a morale problem

The consequences of penalising right behaviour are often described in terms of engagement, morale, or psychological safety. These framings are not wrong, but they understate the enterprise risk.

When right behaviour is penalised, organisations lose early warning capability. Problems that would have been surfaced at low cost are managed quietly until they become expensive. Risks that would have been escalated early compound in silence. Adoption failures that would have been caught in the first month are discovered at the benefits review.

The value lost through compressed judgement and suppressed escalation is rarely attributed to the penalisation pattern that produced it. It appears instead as change fatigue, capability gaps, or cultural resistance — framings that protect the structural cause from scrutiny.

What it takes to reverse the pattern

Reversing penalisation of right behaviour requires more than stated intent. Telling people it is safe to speak up does not make it safe if the consequences for doing so remain unchanged. Encouraging early escalation does not produce it if the person who escalated last time is still carrying the reputational cost. What reversal actually requires is visible redesign of consequences.

This means explicitly protecting people who surface problems early — not just privately reassuring them, but visibly associating their behaviour with good governance rather than with the problem they identified. It means creating a separation between the messenger and the message at the governance level. It means ensuring that teams who follow the new process under pressure are not disadvantaged relative to those who protected results at the expense of adoption.

These interventions are uncomfortable. They require leaders to act against the pressure to protect performance and momentum. They require governance systems to be explicit about trade-offs they have previously left implicit.

But they are the only interventions that change what the organisation actually teaches people about the cost of doing the right thing.

A diagnostic question for leaders

Rather than asking whether people are committed to the change, leaders would be better served asking: What happened the last time someone in this organisation did what we are now asking people to do?

The answer to that question is more reliable than any engagement survey. It describes the actual risk landscape people are navigating when they decide whether to surface a problem, follow a new process, or absorb a short-term cost for a long-term goal. If the answer reveals that doing the right thing has historically carried personal cost, that is the design problem to address. Engagement campaigns, communication plans, and leadership messaging will not reach it.

This is one way of thinking about why change succeeds or fails. Other pieces go deeper into how incentive structures, performance systems, and leadership behaviour shape the conditions in which people decide what is safe to do.

  1. Hirschman, A. O. (1970). Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Harvard University Press. Hirschman’s framework identifies “voice” — active articulation of problems — as the mechanism by which organisations receive correction signals from within. When voice is penalised, individuals shift toward “loyalty” (silent compliance) or “exit” (disengagement or departure). The organisation that penalises honest escalation progressively loses its voice function: people stop doing the thing that would allow the system to correct itself, not because they are uncommitted but because the system has taught them that using their voice carries cost. ↩︎

  2. Argyris, C. (1990). Overcoming Organizational Defenses: Facilitating Organizational Learning. Allyn & Bacon. Argyris demonstrates that organisations develop defensive routines — patterns of behaviour that protect the status quo from information that would be threatening. When doing the right thing (surfacing a risk, flagging a problem early, following the new process at personal cost) threatens the programme narrative or leadership confidence, the defensive routine reasserts itself. The organisation has not instructed people to suppress honest behaviour; it has structured consequences that make honest behaviour costly, and people respond accordingly. The commitment becomes genuinely costly because the defensive routine has made it so. ↩︎

  3. Edmondson, A. C. (1996). “Learning from Mistakes Is Easier Said Than Done.” The Journal of Applied Behavioral Science, 32(1), 5–28. https://doi.org/10.1177/0021886396321001. Edmondson’s research establishes that in work environments where surfacing problems is associated with blame or reputational damage, errors and risks are systematically underreported — not because people are unaware of them but because disclosure is personally costly. The finding is that the organisations most in need of early warning information — those where problems are serious — are precisely the organisations where the incentive to suppress that information is highest. No announcement is required; the pattern of past responses teaches people what is safe to say. ↩︎

  4. Jackall, R. (1988). Moral Mazes: The World of Corporate Managers. Oxford University Press. Jackall’s field research in corporate organisations documents how managers rapidly learn which behaviours are institutionally safe and which carry reputational risk, and calibrate their conduct accordingly. The compounding pattern is Jackall’s central finding: once the organisation has demonstrated — through any number of small, unremarkable episodes — that certain behaviours are risky, people adjust their conduct not just personally but collectively. The whole management layer learns what is safe to do and what is not. The result is progressive withdrawal of honest behaviour across the organisation — not through conspiracy but through accumulated individual calibration. ↩︎

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