Rule With Your Head, Not Your Heart

May 4th, 2012 | By | Category: Geri Roskopf's Blog

I recently attended a seminar on fraud, theft detection and deterrence. The speaker worked in the insurance industry and started out with several stories of how employee theft or forgeries were more common than one would think. Of course, the KOSS Company scandal came up. Personally, I could not imagine how one employee could steal 32 million dollars!

Employee theft can be by embezzlement of company funds, products, services or stealing from one of your customers. These can be done alone, or in collusion with others.

As prevention, the speaker recommended the boss personally check monthly bank statements, signatures on the checks and review the invoices being paid. Dual control of these items was also recommended. Also, watch out for the employee who never takes a vacation, comes to work when they are not scheduled — such as a Saturday — and locks their office door.

Here are a few suggestions of what to do if you suspect employee theft:

1. Don’t accuse before you have factual evidence.

2. Begin a thorough investigation.

3. Find hard evidence — belief and suspicion are not fact.

4. Have a management witness present at all conversations you have with any of your employees.

5. Suspend before you fire.

6. If an employee refuses to talk or cooperate and attempts to leave, don’t detain him against his will.

7. Document, document, document.

The presenter said he would often hear these words from employers after discovering one of their employees was stealing from them: “I can’t believe she would do this. She was like family.”

Finding out that one of your trusted employees was stealing from you can be very emotional, and it would be hard to manage objectively, professionally and effectively. This would be a time when you might arrange for someone else to take the lead for you. I know the feeling, as I was once told that I needed to “rule with my head, not my heart.”