A friend of mine, working for a multinational company, was traveling in South-East Asia together with a very high-ranking colleague. In a local coffee-shop, my friend bought them both coffee, for just two dollars. When they finished and got up, my friend left the receipt on the table. He thought it ridiculous to claim two dollars in his expense report, even if they were on a business trip. His extremely well-paid companion (we’re talking $300k+ base salary here, plus sizable benefits) asked: “You won’t be using that receipt?” My friend shook his head. “Mind if I take it?” And the well-paid high-ranking manager folded the receipt carefully in his wallet…
This makes my alarm bells go off immediately. Why on earth does an overpaid just-below-board-level hot-shot claim a receipt he didn’t pay himself? More or less openly? If I had been HR manager in that company, I’d have given this guy a serious warning.
Some managers I’ve had such discussions with would say: “We’re only talking about two dollars. The company makes enough money. Why make a fuss? It isn’t worth the time to sit someone down, just for two dollars.”
It is crucially important to correct this immediately and spend fifteen minutes grilling this guy on his unethical behavior. Yes, who cares about the two dollars. But no organization should tolerate people in a company with these morals. If a manager feels he can cheat the company out of two dollars, he will cheat the company out of much more.
Even worse, if a manager does so in front of a high-potential who looks up to him, he has no clue about leading by example and developing the leaders of the future. He just doesn’t deserve his high-ranking well-paid job.
Sure enough, a couple of months later it turned out this guy had done several things not quite kosher. Unfortunately, the only consequence he faced was being sidetracked and never making the final career step to board level. He just sat out the last couple of years until retirement in his cushioned job. And that is exactly the reason the company had this problem in the first place. When you avoid confronting people with small dishonesties, it inevitably leads to bigger dishonesties down the road.
Also small-time fraudulent activities need to be nipped in the bud. Ruthlessly. Most people who become a manager, don’t realize they sign up for this frustrating task. But if you follow the tips below, you will spend less time in the future on frustrating fraud cases.
- Check your employee’s expense reports. Never sign them unseen. If you have the luxury of an assistant: ask them to do the first check. I’ve found that secretaries and assistants go over them in scrupulous detail and will invariably spot liberties taken or violations committed.
- In case of irregularities, address the employee. Ask questions if you don’t understand a certain expense. In grey area cases, or cases where there is a good explanation, use common sense to decide whether you let it go. You don’t have to apply policies always strictly and rigidly. But discuss the grey areas, so they know you’re on top of it. You need to reiterate what you expect of them, and let them know you will be less inclined to tolerate liberties next time.
- Address the behavior you are disappointed with. Emphasize the morals. It isn’t the two bucks, it’s the personality trait or behavior you want to address.
Yes, it can be time-consuming and dispiriting to do this. But imagine the frustration and fuss around a serious fraud case. The irritation you were apparently wrong in your hiring decision. The personal insult, that a promising protégé thought he could get away with it on your watch. The broken trust, that will hang as a shadow for quite a while over all your personnel decisions.
Be the manager who actively shapes the company culture you want to see. You’ll best reward will be to see you’ve developed good, mature employees who you can fully trust.