Strategic HRM: Weeding out the dishonest…

• Recruiting honest people requires effort, and so does keeping them honest once employed
• With rising cases of theft and embezzlement, organisations need to recognise employee dishonesty as a serious concern

A recent survey of employed individuals revealed facts that could make employers queasy—56 percent admitted to lying to their seniors repeatedly, 41 percent said they had falsified reports and documents more than once, and 35 percent reported to stealing from their employers. As per another survey, 36,000 employers are ‘stolen out of business’ by their employees annually.

With findings like these, the quest for honest employees is only intensifying. With the economy in the doldrums, worrying about dishonest employees is the last thing that organisations want to do. The dishonest will admit their trickery only under anonymity! Also, assuming all employees to be dishonest until proven honest is a sure way to doom. Keeping things locked or under surveillance is neither cost-effective nor fool-proof.

All this suggests only a bleak possibility of a win-win situation, where organisations recruit the honest and keep them so, while the employees feel their organisations know how to differentiate good from bad. Can organisations rely on tools other than background checks to weed out the dishonest? Here is how they can recruit the honest and keep them so.

Honesty check

The honesty check must take place at three levels.

Pre-recruitment stage: Consider resumes as a preview to a candidate’s background. When organisations form opinions based on resumes alone, they are only ignoring the caveat: “The best written resumes often camouflage the worst individuals!”. The best practice is to get all candidates fill application forms. Here too, care is required. Instead of handing out a form and saying “Please fill this and hand it over to the receptionist”, candidates must be told to fill out the forms completely and truthfully. They must be given ample time to provide every detail sought, like the number of previous employers and the reasons for leaving them. Candidates must also be informed that their answers will be checked for accuracy. Organisations need to convey that one need not be perfect to work for them, but honesty and truthfulness are a must.

As one recruiting expert says, “You may be amazed with what you learn from a comprehensive employment application presented to your applicants with an ‘answer truthfully’ pitch.” Hyping up truthfulness is a ploy that has scared away weak-hearted frauds successfully!

Mid-recruitment stage: With the objective of recruiting genuine performers, interviewers typically grill candidates on their achievements. Resultantly, there is little time to assess candidates on other equally important qualities like honesty. Interviewers must, therefore, reset the primary objective of interviewing to recruiting ‘honest top performers’.

In addition to discussing their achievements, candidates should be questioned on why they left their earlier jobs, and asked to explain gaps between jobs. Equally important is for interviewers to correlate information collected during the interview with resume details. Discrepancies should be pointed out and candidates given the opportunity to explain themselves.

Post-interview stage: This is when reference and background checks are conducted. Although most organisations conduct background checks, the focus is merely to validate the information collected. However, in addition to verifying the information gathered in the first two stages, a thorough background check uncovers a candidate’s work ethics and character.
As part of a background check, some organisations ask candidates to undergo credit assessments to contrast their earnings with outgoings. As part of reference checks, a smart move is to request for two types of references—work and personal. A still smarter thing is to ask a candidate’s work reference questions that one would ask his personal reference. “Work references usually have nothing bad to say about a candidate, so asking candidates to provided personal references is a good idea,” says a recruiter.

While these stages keep the dishonest at bay, what can organisations do about keeping their honest employees honest?

In-house honesty

The rising cases of employee theft and embezzlement have forced behavioural scientists to re-examine workplace honesty. A new school of thought now believes that while everyone is inherently honest, opportunities to get away with fraud tempt even the best to cheat. Therefore, even while organisations believe in principles such as self-governance, autonomy and laissez faire, the absence of internal controls will lead to diminished protection against employee dishonesty. Here are a few simple yet effective internal controls that help keep the employees honest:

Gag the talkers: Managers should be cautioned against saying things like, “I can trust him with my life” or “He is the most loyal of employees”. According to behavioural scientists, such expressions become the basis of diluting one’s control over employee conduct. Employees showered with such praise become impervious to the consequences of misconduct.

Praise the action: The kind of expressions mentioned above create an “entitlement mentality” amongst employees, where they feel their employers owe them much more than their salaries. Thoughts such as, “I deserve this because I have been working for 6 months without bonus” or “I have been working overtime so I ought to get this”, drive employees to pilfer, which can lead to large embezzlements eventually. While praising is an effective motivational tool, managers should be specific about why the employee has received the pat.

Decentralise money matters: Allowing a select few to handle all the financial matters is a bad idea. Separating activities such as creating invoices, receiving payments, opening band accounts and recording bank statements distributes control and prevents misconduct. Another tip is to audit customer and vendor lists regularly to validate their existence.

A focus on recruiting the honest and exercising controls in operations should prevent episodes of misconduct. They may not eradicate dishonesty altogether, but the steps taken to reduce occurrences of employee misconduct are worth the effort.

Reference:
The ManageMentor