Employee theft is not a topic that managers want to discuss, though it happens a lot in the workplace. What constitutes employee theft? Anywhere from stealing time, supplies or an outright theft where a trusted employee embezzles thousands of dollars. Small companies are vulnerable because they don’t usually have in place financial control systems that ensure employees are honest.
Studies show that people will rationalize taking something that doesn’t belong to them if the environment is ripe for the taking. That’s why it’s essential that managers/owners help employees stay honest by setting up clear guidelines and systems that protect the assets of the company.
“Employee Theft: Identify and Prevent Fraud, Embezzlement, Pilfering, and Abuse” by Patricia Schaefer on BusinessKnowHow.com:
There’s an old saying that’s long been accepted in fraud prevention circles called the 10-10-80 rule: 10 percent of people will never steal no matter what, 10 percent of people will steal at any opportunity, and the other 80 percent of employees will go either way depending on how they rationalize a particular opportunity. The good news is that there is much a business can do to sway this 80 percent to their side.
Questions to ask yourself:
- Do you find you are ordering supplies more often?
- Do you suspect an employee wasn’t sick but called in sick? On some level, you need to trust your employees, though if an employee isn’t performing and is out ill a lot, then you need to dig deeper to ensure that the employee understands the policy of the company.
- Do you have multiple eyes viewing your financial data? If not, you leave yourself vulnerable to an employee stealing.
- Do you check employee expense reports? If they have a company credit card, are all of the expenses company related. When you reimburse the employee, do you make sure that they pay the credit card?
The balance is always between trusting and be aware of the potential theft. If you create a clear message to your employees in your handbooks, as well as set up financial systems that regularly audit activity, you will be able to maintain the trust.
As a manager, your job is to help the employees be honest.
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