Theft, Fraud and Dishonesty in the Workplace
We recently hosted a Lunch and Learn session on Theft, Fraud and Dishonest Employees with guest speaker David Kearns of Expert Investigations. Following up on this, I thought it would be interesting to pull out some of the key points and considerations.
When we talk about fraud we are referring to a scenario where there has been dishonest activity that causes actual, or even potential loss to an individual or an entity, such as a business. It is a wide-ranging concept that can relate to issues such as identity, money, property, false documentation, using information improperly.
What does a dishonest or fraudulent person look like?
Whilst we can’t tell, just by looking at someone whether or not they are the kind of person likely to be dishonest, David introduced our Lunch and Learn group to Donald Cressey’s (1973) Fraud Triangle which identifies the 3 factors that are normally present in causing someone to commit fraud.
Opportunity refers to the circumstances being such that they allow an individual to commit fraud. This might be because systems and processes that are in place are inadequate, for example, lack of supervision or control mechanisms.
Pressure is the motivation that the individual has to commit fraud; perhaps they are in financial difficulty or cannot meet deadlines.
Rationalization is the justification that the individual finds for carrying out the dishonest act; they intend to pay it back, the business is wealthy, it serves the business right for not treating them fairly.
How do we prevent people from being dishonest in the workplace?
We all like to feel that we build a culture of trust and honesty in our organisations and we talk about the importance of this in ensuring employee engagement, but that doesn’t mean to say that we should not put controls and procedures in place to address the ‘opportunity’ aspect of Cressey’s triangle such as auditing and supervision. It is a reality of life that theft, fraud and dishonest behaviour occurs.
Simply making employees aware that they will be dealt with under the disciplinary procedure is not enough. An individual will only commit fraud if they see that the opportunity to do so presents itself; they don’t see themselves getting caught. Their justification for committing fraud is so strong that they don’t believe there is reason for them to be disciplined.
What can be done to deter theft, fraud and dishonesty in the workplace?
- Undertake a risk assessment to identify opportunities for theft, fraud and dishonesty and then put controls in place to deter this.
- Establish lines of authority and responsibility.
- Train staff to be aware of and recognise signs of dishonest behaviour.
- Encourage a culture where staff feel able to raise concerns.
- Put measures in place to safeguard assets and information.
- Audit work processes to ensure that control measures are still effective.
- Develop a policy for the retention and management of documents
cHRysos HR provides support with a range of people management issues affecting businesses, including the development and implementation of policies and procedures. Visit our website at www.chrysos.org.uk, Tel. 01302 802128 or email info@chrysos.org.uk
Share This Post
Posted In
cHRysos HR Solutions are a UK wide HR training and consultancy company offering CIPD accredited qualifications, Apprenticeships, Training and HR Services to SMEs. For more information about how cHRysos HR can help you or your teams successfully achieve further qualifications, contact us on info@chrysos.org.uk or call 03300 562443.