Month: February 2015

In Lieu of a Pay Raise, I’ll Take What I Want.

Another update from the HR jungle…. 
image025Howard works for a small manufacturer that makes steel-toed work boots and fancy stitch cowboy boots. He’s been with the company about six years and worked his way up to the lowest rung of management. That’s where his career stalled.

Howard is convinced that his advancement is stalled because he’s not family. The husband and wife owners use the company to ensure that assorted children and relatives will never be a burden on the unemployment insurance fund for the state. Howard knows this because over the years he’s trained most of the family idiots only to see them get pay raises and promotions ahead of him.

Howard threatened to quit a couple of times, but the owners begged him to stay and made promises that they haven’t kept. So Howard has decided to get even. A couple of times a week he helps himself to some of the leather which he uses in his side business making customized knife and gun holsters. The supply closet has helped him set up his home office and he sometimes uses the office postage machine to cover his mailing expenses.

Lately the owners have complained about rising costs but Howard’s not really worried about being caught. He knows he’s not the only one raiding company property. Besides, the owners treat the business like their personal piggy bank.

What could the owners have done to avoid this employee theft?

  1. They could create an inventory of company property and periodically update the inventory through audits.
  2. The owners could initiate internal controls such as requiring authorizations to take leather from the store room or supplies from the supply room.
  3. They could reconsider some of their employment practices which are causing employee dissatisfaction.

These owners are learning a hard lesson about employee relations. The second most common motivation for employee theft is revenge. Employees who believe their contributions are ignored or undervalued can wreak havoc before they finally leave for the last time.

Need help with HR issues? Corporate Compliance Risk Advisor can help you create HR policies that are appropriate for your company’s size and then serve as a resource to your staff when the policies are implemented.

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An Inside Job.

image023Pete owns a small plumbing contractor’s business. He has a lot of equipment, such as backhoes and tools, and a truck to pull the trailer that hauls his equipment to a job site. He also has giant rolls of copper tubing which require a tow motor to move around the shop.

Years ago Pete invested in a security fence topped with razor wire which took care of casual thieves who prefer the after-hours self-service plan for furnishing their home or business. Last year he installed security cameras inside and outside his warehouse after a neighboring business was robbed. He also has a security alarm system for the building.

Today when Pete arrived, he found the front gates wide open. The warehouse door had a giant hole where the thieves used an acetylene torch to cut a hole so that they could abscond with the copper tubing.

Pete knows that one or more of his employees must be involved because the theft has all the hallmarks of an inside job. The security alarm wasn’t triggered and the cameras were turned off. The thieves took only the copper tubing which is readily convertible into cash and hard to trace.

What could Pete have done to avoid this employee theft?

  1. The sad truth is that Pete did everything he could to avoid becoming a victim of employee theft, including installing cameras and an alarm system.
  2. Pete could begin doing background checks on employees in hopes of weeding out potential future problems.
  3. Pete could protect his business from the losses caused by employee theft through insurance coverage, such as a fidelity bond or employee (dis)honesty coverage.

Pete has just discovered the most common of the five motivations for employee dishonesty, which is greed. Greedy employees are inherently dishonest and generally have no remorse for their actions, unless it’s regret at getting caught.

Need help with HR issues? Corporate Compliance Risk Advisor can help you create HR policies that are appropriate for your company’s size and then serve as a resource to your staff when the policies are implemented.

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I Was Going to Pay It Back….Honest!

Another update from the HR jungle….

image021Sam leads the IT department for his company and is the head of their internal security team.  As part of his duties, Sam has administrative rights to all electronic and computer-based systems at the company.  He ensures that new employees are issued security clearances to use the company computers. He sets the dollar limits on company-provided credit cards as authorized by the owners of the company.

But Sam has a problem. He likes to gamble. It started years ago quite innocently when he participated in a sports betting pool with co-workers at a former employer’s office. Then he started spending his weekends at casinos. Sam began using his company credit card to get cash advances at the ATM in the casino.

At first, he paid off the credit card balance each month and no one discovered what he was doing. When he couldn’t pay the credit card balance, he raised the credit limit on the card using his administrative rights as the head of internal security.

Sam’s basically a decent guy and the stress of his situation has finally gotten to him. This morning he walked into the owner’s office and confessed all. As he sat sobbing and promising to reimburse the company, the owner stared at him, stupefied with shock.

What could the owner have done to avoid this employee theft?

  1. The owner could have regularly reviewed all company expenses, including credit card charges, to ensure they were used only for valid company business.
  2. The owner could have required regular reports from Sam’s department showing the authorized limits on all company credit cards.
  3. The owner could have hired an outside auditor to do an annual audit of the company’s financial records in the hopes that the fraud would have been uncovered.

Employee theft arises from five basic motivations, including a gambling habit. Another closely related motivation is a drug or alcohol habit. Employees experiencing any of these addictions may decide to steal an employer’s property in order to feed their habit.

Need help with HR issues? Corporate Compliance Risk Advisor can help you create HR policies that are appropriate for your company’s size and then serve as a resource to your staff when the policies are implemented.

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The End is Near…for 2015 Open Enrollment.

Another update from the HR jungle….
image017Walter owns a restaurant and catering business with 25 employees, most of them part-time. The hours can be brutal and the pay is low. Walter wishes he could pay more but in the competitive market he faces that’s not an option.

He can’t afford a group health plan for even his handful of full-time employees. Instead, he has encouraged his employees to sign up for coverage through the Exchange, also called the Marketplace. He thought some of his employees would qualify for a subsidy to help pay their premiums. Last year many of the employees decided not to buy individual health policies for a variety of reasons, including needing the money to pay bills. Now these employees will be assessed the penalty because they also didn’t try to qualify for an individual exemption.

Walter knows that he has no legal obligation to help his employees with health insurance. But he wants to help his employees because it’s the right thing to do. Walter is thinking about how to make one last effort to encourage his employees to sign up for coverage before open enrollment closes on February 15th.

What options are available to Walter?

  1. Walter can remind his employees that open enrollment closes in about 2 weeks. He can encourage them to go on-line to healthcare.gov or see an insurance agent.
  2. Walter can invite a health insurance agent to his restaurant to meet with his employees before or after their work shifts to sign up for coverage.
  3. Walter can remind his employees that they may be able to qualify for an exemption from the penalty, such as a hardship exemption due to low income.

Need help with HR issues? Corporate Compliance Risk Advisor can help you create HR policies that are appropriate for your company’s size and then serve as a resource to your staff when the policies are implemented.

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