Paragon Report on Staff Thefts and covert cameras

It all started with a casual conversation over a beer about honesty. My mate was boasting how his long serving staff was totally on his side. He explained that just the other day a client paid by Bank Cheque made out to "cash" and how he would never had known about the payment had it not been pointed out to him. When I asked how often people paid by this method it soon became apparent that in fact something was odd. The next morning I was waiting in his office as the staff arrived. The first person in was the receptionist who receipted the payment. By the time the manager arrived the receptionist has told me she had obtained the Bank Cheque at lunch time to make up for a previous cash payment only after a client had queried her account. It transpired that between the manager and receptionist they had been systematically stealing some cash payments for years. It ain’t pleasant seeing a grown man cry like a baby in a large city office, his entire trust having been destroyed after being robbed blind by people he regarded as family even to the point of helping them buy their first home.

In another case, a staffer caught stealing over $100,000 from their employer when interviewed dobbed in the boss who was also charged and convicted.

And, in more than one occasion investigations for overseas companies have resulted in their New Zealand managers who raised the matter in the first place being caught in the investigation net.

What’s going on here you might ask? well there is indeed one common theme and in every case, the bosses simply reaped what they had sown.

We have all heard the expression a "family business" and to my mind starting a business can be just like starting a family. You look forward to many years of happiness raising your child to follow your example ever hopeful they will grow to become successful in everything they attempt. Good examples and sound principles generally produce success, poor examples and bad habits open the door to failure or in business - theft.

In the cases above, the staff had repeatedly watched their employers doing "cashies", "back-hand deals with suppliers" and "raiding the petty cash". The staff were all quite able, in their minds, to justify that they were only doing what the employer would have done had the roles been reversed.

The point here is that as leader, your integrity is paramount. How can you expect staff to remain honest when they see you tickling the till?

To test this point, I asked my local café owner about his methods. We agreed that from that date when he wanted a coffee or offered to shout his PI mate a lunch, then he should make a point of asking an employee to process the transaction and that he must pay by EFTPOS or cash. Less than a week later he told me the change in profitability was immediate. His employee’s immediately stopped asking to give their family and friends free coffees or discounted lunches, etc. Even the kitchen staff started accounting for their diet cokes.

It really doesn’t matter the size of the organisation, the same rules must always apply. Remember the old 10-80-10 rule "10% of people are totally honest, 80% of people need to be kept honest and the other 10% will rob you blind" In business this means you should do two things: 1. Have as little as possible to do with the last 10% and 2. Work on the middle 80%. If only it were so easy.

Which brings me on to the obvious question, what do you do when it turns to custard and irrespective of standards staff do decide to steal.

Employment law is a minefield when it comes to dishonest or problem employees. Employers need to be "justifiably correct" and have followed the "proper procedure" when conducting an investigation otherwise they will end up having to dip into their profits to pay for their lack of proper process.

The use of covert cameras in the workplace should be carefully considered beforehand. The Privacy Commissioners "Case Note 32277" deals with a matter where a covert camera was installed in a work changing room. Certain strict conditions were applied and the offender was caught breaking into the lockers and prosecuted.

Accepted guidelines in respect to the use of covert camera is to install a camera without telling staff when the client has reasonable suspicion an offence such as theft is being committed but only for the duration of the investigation period. That is, not on fishing trips and the camera is removed after the matter has been resolved or the investigation closed. The main factors are "reasonable suspicion" and limited time frame" as the camera is there to get the evidence. These guidelines protect innocent staffers from intrusion and arguably suspicion. "The camera doesn’t lie"

So take good advice when you see a problem and always act promptly.

Whether a family or a business, it’s quite the same, good principles and solid examples help set the foundation. Organisations need rules and limits. If instead staff sees sloppy habits and dishonest deeds then whose fault is it really?

Tips on setting good examples to staff:

Let them know that you are running a real business. Don’t act like the company is just a vessel for giving you an easy lifestyle with lots of freebies.

Ensure you have and that they see that the company adopts proper accounting processes and systems. If a discrepancy is noticed involve them in the solution.

If possible share the profits with them by way of an agreed formula. It might be cheaper in the long run.

Consider using modern technology. There are good point-of-sale and sales –v- stock equipment nowadays. GPS tracking and overt CCTV cameras also show staff that you take business seriously and should be promoted as being in everyone’s interest and safety.