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Is Employee Dishonesty Cheating Your Business?
Whether an employee regularly leaves a half-hour early or embezzles thousands of dollars, workplace dishonesty can really injure a business’ bottom line. What’s worse, unaddressed dishonesty often breeds more dishonesty. That’s why any business that wants to effectively combat employee dishonesty should use a proactive approach that recognizes what workplace dishonesty looks like and what causes it.
What workplace dishonesty looks like:
- Theft. Chances are, theft is occurring in your workplace every day. It may not be large-scale embezzlement, but it’s happening. You see, under the strictest definition of theft, employees who take home a box of paper clips or a nice pen are stealing from the business. Industries such as retail and manufacturing are particularly vulnerable to theft, which is a commonly cited reason for small-business failure.
- Misuse of work hours. Employees probably don’t realize how misusing work hours equates to dishonesty. When an employee is late to work, takes a long lunch, or conducts lengthy personal affairs while on the clock, the business is essentially gifting that paid time to the employee and getting nothing in return. This can hurt the business’ productivity and payroll. (Read more about misuse of company time and other ethical dilemmas in our blog “The Business Ethics Minefield.”
- Lying. Some days, white lies seem to be everywhere at work. Without realizing, many of us hear an untrue “I didn’t get your message” or an ill-intended “I’ll get back to you” on a regular basis. Employees often lie to make themselves look better (such as on a résumé) or to keep themselves out of trouble. And a serious revenue-impacting lie many employees tell? Calling out sick when they aren’t.
What causes workplace dishonesty:
- Weak policies and enforcement. If specific, discipline-worthy dishonesties are not clearly addressed in the employee handbook, your business might be in trouble. Establishing a written outline of dishonest behaviors not only educates employees about expectations, it gives the employer a leg to stand on if discipline is required. And what about internal controls? Accounting entries, petty cash receipts, and inventory are all susceptible to dishonesty if the entire process is left under the auspices of one employee, who is not accountable to anyone else.
- Disgruntlement and poor morale. Upset employees may be more inclined to commit dishonest acts, because their dishonesty is “justified.” Employees who feel underpaid might add more hours to their time sheets or steal from the petty cash box. Employees who feel underappreciated might leave early or spend hours a day on personal calls. When one or two employees become dissatisfied or disgruntled, sometimes it’s a symptom of a burgeoning problem. Before long, the business as a whole can suffer from low morale. Employees who don’t feel good about their jobs are more likely to act out in dishonest ways.
By nature, employees are only human and aren’t perfect, and many of them will be tempted by minor dishonest acts. Writing clear definitions of dishonest behavior is the first step toward getting employees to recognize what is dishonest and to be mindful of their behavior. Knowing potential causes of dishonest behavior can help the business create new policies, mitigate temptations, and get employees back on track.
If morale is low, consider a survey to discover what changes would make employees happier. If company policies need to be implemented or enforced, consider working with an experienced Human Resources consultant such as YES! Your Human Resources Solution to develop the necessary tools.
With a proactive approach, dishonesty can be reduced and discouraged, but sometimes employee dishonesty still results in a significant loss. What can you do when that happens? Tune in to next week’s YES! Your Human Resources Solution blog to find out!
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