Employee Dishonesty

Why employees steal

The Knife in the Back

Another update from the Jungle…

pic-5Bryan is a serial entrepreneur. Every time he gets a new idea, he starts a new company to exploit the idea. He’s successful at starting businesses, but he’s lousy at running them.

Bryan doesn’t like getting bogged down in the details. So he relies on lieutenants to keep him informed of how things are going at each company. Unfortunately, Bryan doesn’t seem to have noticed that one of his trusted lieutenants is deadlier than a rattlesnake.

pic-1Susan learns this the hard way when she begins working at one of his companies. Her first day on the job, she’s introduced to Elaine who is so friendly and helpful that Susan is duped into thinking she’s nice. But Elaine is a snake in the grass.

pic-2Elaine is an intolerable busybody. She stands near the elevator to track the time each employee shows up for work. She wanders the hallways, keeping tabs on what others are doing and saying. Then she passes every tidbit of information along to Bryan with a special Elaine twist.

Susan learns the truth when Bryan stops by for a quarterly meeting with the company’s management team, of which Susan is a junior member. Bryan marches into the conference room and sits opposite Elaine who is taking notes on pic-4the decisions he makes.

Bryan begins the meeting by chewing out Laura for falling sales in the past quarter. Laura replies that it is impossible to boost sales when her team is starved for resources. She produces a stack of receipts showing that her team has to pic-3buy their own office supplies since Elaine locked up the supply closet and hid the key.

Bryan impatiently tells Laura to stop blaming others for her own failings as a manager. Then he turns on Bob, the CFO, who didn’t have the financial reports ready for Bryan. Bob scowls but says nothing.

pic-6Susan knows that Bob was late with the financial reports because Elaine delayed helping him while she worked on other lower priority assignments. Susan looks at Elaine expecting her to defend Bob. Elaine smirks and remains silent.

What are Susan’s options?

  1. She can point out that Elaine sabotaged Bob but doubts that Bryan will believe her.
  2. She can thank her lucky stars that Elaine isn’t gunning for her.
  3. She can use her accrued vacation to begin hunting for a new job, preferably one without another Elaine.

pic-7In the actual situation, the junior manager soon found herself on the backstabber’s hit list and left the company as soon as possible.

If your company is struggling 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 as the policies are implemented.

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The Perfect Employee for the Job

Another update from the Jungle….

unnamed-23Alana always felt like a misfit, so when she started her own business, she decided to hire people like herself.  Alana’s company sells works of art ranging from paintings to furniture.  Oddballs seem to be more at home in the world of unique “art”.

Alana’s first hire was Suze, a part-time yoga instructor who also designs furniture. Suze’s stuff sells well enough to make up for her shortcomings as an employee. She refuses to answer the phone when trying a new contortionist stretch exercise.  She also hates talking about money to customers.unnamed-21

Trisha wears low-cut, sleeveless shirts to show off her extensive tattoos. Trisha is a painter. She refuses to talk to customers because she believes none of them truly appreciate her artistic vision.

Alana hired Evan and Elsie to actually sell stuff to customers.  Compared to Suze and Trisha they seem almost normal. Evan and Elsie grew up next door to each other in a typical American suburb. They had many youthful adventures, most of which are sealed in their juvenile records.  Evan and Elsie are living proof that screwing up doesn’t prevent gainful employment if you find a sufficiently gullible employer.

unnamed-18They instantly boosted sales due to their smooth handling of customers.  Art wasn’t the only thing they sold at Alana’s shop.  Evan and Elsie had a side business growing high quality marijuana.  To encourage sales, they invited customers to sample the good in the parking lot behind the shop.unnamed-19

Alana learned of their agricultural adventures when she noticed the parking was full but the store had no customers. She walked to the back of the store, through the storeroom and opened the back door. She almost fainted.

unnamed-22Shrieking like a banshee, she chased off the customers. Then she explained  to Evan and Elsie that de-criminalizing marijuana was not the same thing as legalizing it. She threatened
to fire them if they brought their wares to work again. And that’s when Alana began to think that establishing a few employee standards might be a good idea.

What are Alana’s options?

  1. She can fire the misfits and start over with “normal” people.
  2. She can drink an extra glass, or bottle, of wine and accept that she got the employees that she wished for.
  3. She can create a few basic HR policies on what she expects from her employees during their scheduled work hours.

The above scenario demonstrates what can happen when an employer fails to create realistic expectations for employees. A few basic HR policies can solve that problem.

If your company is struggling 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 as the policies are implemented.

 

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It Rhymes With Witch

Another update from the Jungle….

Once upon a time in a town not so far away, there lived a nice woman named Alanis. She liked her job and was always willing to learn from more experienced co-workers. Her boss loved her too and wrote embarrassingly glowing performance reviews.

2But fairy tales aren’t the only places with evil beings. A wicked witch named Wanda also works in the office.  Wanda’s not qualified to do the job Alanis was hired for but that doesn’t stop her from trying to take over.  Wanda smiles in Alanis’ face even as she secretly sharpens her talons.

Wanda’s opportunity soon arrives.  At a staff meeting, their boss, Julia, announces that the company is rolling out a new service and asks Alanis to take the lead for their department. Wanda’s death-ray glare bores into Alanis’ skull across the conference room table. After the meeting, Wanda loudly announces in the break room that the new project is doomed because Alanis is unnamed (1)incompetent.

A week later, Alanis’ project notes mysteriously disappear from the system’s shared drive. Fortunately, she a printed copy first and is able to recreate her notes. She saves a copy of the new version on a thumb drive. Sure enough, the shared drive version disappears again.

At the next staff meeting, Julia asks why Alanis she doesn’t share information with the rest of the group. Alanis reports the mysterious deletions and asks that IT investigate the deletions. Julia looks at Wanda and then abruptly ends the meeting.

The next day, Julia calls Alanis to her office. Waiting in Julia’s office is Wanda. Julia says that she’s decided to appoint Wanda as co-chair of the project because it’s obviously too much for Alanis to do alone. Wanda smirks as she demands copies of all Alanis’ notes.

After that, Wanda changes the entire strategy so that their department misses deadlines set by Julia’s bosses. Wanda blames Alanis and complains about a lack of cooperation. Alanis is again called to Julia’s office where she is criticized for disloyalty and undermining the department. Julia says Alanis can resign or be fired.

What should Alanis do next?

  1. She can continue to protest her innocence knowing she won’t win since a weak manager is as dangerous as a witch.
  2. She can booby trap Wanda’s desk with eau de skunk.
  3. She can resign and consult a lawyer about suing for constructive termination.

In the actual situation, the targeted employee resigned. Any office can develop an infestation of wicked witches if management is weak.  Fumigate your workplace with effective HR policies.  3

If your company is struggling 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 as the policies are implemented.

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Low Hanging Fruit

Another update from the Jungle….

Jack owns a small business which provides him with a good living. He owns a big h2ouse with a giant mortgage and he drives an Escalade.  When he goes to the store, he parks in a handicap parking spot near the door so that everyone can see his ride.

Jack once worked for a major corporation where the HR director constantly nagged him about petty rules that he’d supposedly broken. After a few years of her nagging, Jack decided to be successful on his own.

Jack thinks his company runs smoother with fewer written rules so he doesn’t have any written HR policies. He also pays everyone a “salary” so he doesn’t have to track time and attendance.  But he docks the pay of employees who show up late or miss work. His CPA, Susie, wants him to create job descriptions to distinguish between non-exempt and exempt employees.   Jack tells her not to worry about it; he will tell her how much to pay each employee each pay period.

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Last week, Susie attended a continuing education seminar which struck her with the force of a hurricane wind. She learned details of the new overtime rules. A presenter also said the Department of Labor (DOL) had stepped up enforcement actions against small employers. He used the phrase “low hanging fruit” so often that Susie temporarily gives up fresh fruit and vegetables.

Susie rushes home to prepare a summary of the new overtime rules and hand delivers it to Jack.  Jack thanks her and privately thinks that Susie’s becoming a nag like the old HR director and it may be time to fire her.

This morning Jack arrives at his office to find a polite young man waiting to talk to him. The stranger says he’s a DOL examiner and he wants to see time sheets, payroll records and job descriptions for Jack’s employees.

What should Jack do next?

  1. He can bluster at the DOL examiner to mind his own business.
  2. He can beg the DOL examiner to give him time to fix his many problems in hopes of lowering the penalties his company will ultimately owe.
  3. He can sneak out the back entrance, empty the corporate bank account and escape to a foreign country that has no diplomatic relations with the U.S.

In the actual situation, the employer woke up to his peril before the DOL examiner arrived on his doorstep. He had already implemented a plan to fix his HR problems which convinced the DOL examiner to show mercy when calculating the penalties.   

If your company is struggling 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 as the policies are implemented.

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Outside Employment

unnamedKelly is glad to be back at work after a couple of weeks of family togetherness at the holidays. A few more days of vacation and she’d be ready to disown her parents and her in-laws, write the kids out of the will and talk to a divorce lawyer about her husband’s fate. It’s good to be back in the office where her job as HR Director suddenly seems simple.

Of course, that happy mood wears off before her first cup of coffee is finished. She’s still sorting through her email in-box when the company president barges into her office. He’s called a meeting to discuss a problem employee.

Kelly refills her coffee mug, sighs, and trudges to the president’s corner office to join the chief information officer and the CFO. The CIO explains that a misdirected phone call to her key lieutenant uncovered proof that Dan is running a side business. Dan is an IT department employee.

The misdirected phone call is from an individual who says he outsourced his company’s IT department to Dan. A quick investigation reveals that Dan has a personal IT business complete with a website advertising the same services he does for his employer. Dan has helpfully listed his company-issued cell phone number as the contact number for his side business.

The company president wants to fire Dan immediately, preferably by firing squad in the parking lot. The CIO and CFO also want to fire Dan but are worried about delicate negotiations on an IT contract. Dan has a small, but critical part to play in those negotiations. If Dan is fired he might take revenge by trying to screw up those negotiations. The management team looks at Kelly for her recommendation.

unnamed-2

What’s best for the team?

What should Kelly recommend to the management team?

  1. She can agree with the company president that Dan should be fired immediately, but without the firing squad since that would create a mess in the parking lot, not to mention violating company employment policies.
  2. She can ask the CIO if there is a replacement for Dan so that he can be placed on administrative leave pending the outcome of the negotiations.
  3. She can suggest that they proceed as usual, keeping the matter confidential until after the IT contract negotiations conclude and then fire Dan.

In the actual situation, the company decided to go with the third option because there was no replacement option. Immediately after the IT contract negotiations ended, the employee was fired with a note that he would never be eligible for rehire.

If your company is struggling 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 as the policies are implemented.

Join the HR Compliance Jungle today. Click here!

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School Zones Made Me Late

Another update from the Jungle….
image001Jane is the HR manager for a company with about 200 employees. The company runs a lean operation which means that Jane is the sole HR person and handles pretty much every situation that arises. Jane likes the variety of issues that she faces because it keeps everything fresh and interesting.

A major problem for the company is time and attendance. The owner of the company is obsessive and compulsive about details and it drives him nuts to see a few employees chronically showing up late. He told Jane to fix the problem.

Jane reviewed the time and attendance policy which clearly states that chronic tardiness may subject an employee to progressive disciplinary action. The policy is included in the employee handbook. Jane checks the personnel files for each laggard employee and finds that each of them has signed the acknowledgement form. That means that each employee received a copy of the employee handbook and promptly tossed it aside without actually reading it.
image004This week, Jane began meeting individually with each employee who is chronically late. Jane tries not to yawn as she hears the usual excuses. One employee says she was stuck in traffic due to an accident. Another says his dog got out of the fenced-in backyard and he had to find the mutt and lock him in the garage before leaving for work.

Jane’s favorite excuse of the week is the employee who says she was late due to the school zones. The employee recently moved so that her children could attend a more highly rated school. This means the employee must now travel through three more school zones on her route to work. That caused her to be late.

What should Jane do next?

  1. She can explain to each employee that the excuse du jour doesn’t make up for chronic lateness. She can then move to the next step in progressive discipline.
  2. She can encourage each employee to make a greater effort to arrive on time and let them off with a verbal warning.
  3. She can ask herself why she never thought up so many creative reasons for being late to work.

Time and attendance issues are a perennial problem. Perhaps it’s time to think about the underlying reasons for tardiness. Employees who enjoy their work tend to show up on time.

If your company is struggling 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 as the policies are implemented.

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Sex & the Business Woman.

Another update from the HR jungle….

Julie is a woman of a certain age. She steadily climbed the corporate ladder until she reached the C suite. She likes her job but it’s all gone a bit flat lately since she attained the goal she set years ago. She feels entitled to reward herself for all the hard work.

image001

A few months ago, Julie met Javier at a business networking event. He’s a young man with gleaming teeth, a good body and he laughs at all her jokes. She tells her husband that she has to work late and then skips off to meet Javier.

Julie pays for their dates since her income is considerably higher than his. But sex on the side costs a lot of money, so Julie resorts to padding her business expense account and sometimes uses her company credit card for personal expenses.

Now Julie has been served with divorce papers by her angry and vengeful soon-to-be ex-husband. At the same time, Julie is trying to convince her employer to allow her to reimburse the company rather than face termination for cause with a possible criminal charge for theft. Worst of all: Javier won’t return her phone calls.

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

  1. The company could change how it reimburses expenses of senior executives, requiring more documentation or oversight.
  2. The company could set tighter limits on the use of company credit cards, such as a maximum dollar limit per day.
  3. The company could do more random internal audits of company expenses to spot patterns of fraud earlier.

Julie resorted to employee theft to cover the cost of her love life. She engaged in the fifth motivation for employee dishonesty which is to pay for a boy toy or mistress.

All employee theft comes down to one of the following five motivations: (1) greed, (2) revenge, (3) gambling habit, (4) drug or alcohol habit and (5) having a boy toy or mistress. If your company is struggling with this issue, Corporate Compliance Risk Advisor can help you create internal controls and HR policies that mitigate your risk.

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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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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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