Employee Theft

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.

Join the HR Compliance Jungle today. Click here!

Follow us on Facebook & Twitter!

Visit us: http://www.complianceriskadvisor.com/