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Honesty is the Best Employee Policy

Written by: Nicholas F. Casolaro

Published in the New Hampshire Business Review
Co-written by Ryan King, Director of Human Resoursces for McLane Law Firm

Regardless of whether it is defined in a written directive, most employers believe that they have a dishonesty policy in place. This “policy” is thought to be reflected in the workplace culture or understanding between management and staff to behave in a certain way. Relying on informalities and trusting in the good nature of your employees, however, may not be enough to prevent acts of dishonesty in the workplace. That’s why more employers are making honesty a formal written policy for their workers.

You are probably thinking, “doesn’t every employee know that dishonesty in the workplace is wrong?” The answer may not be as straightforward as it seems. Acts of dishonesty in the workplace are wide ranging in severity and continue to harm businesses. Now more than ever it is easier for an employee to perpetuate dishonesty through emails, text messages, or posts on Facebook, Twitter or other social media outlets, and cover their tracks by deleting the harmful information with a simple click of a mouse.

No business is perfect, but one way to curb acts of dishonesty is to institute a written dishonesty prevention policy, communicate that policy to all employees, and consistently enforce the policy among every level of employee. Written policies make it clear that acts of dishonesty will not be tolerated by the employer and will subject employees to discipline and possibly termination. Employers should be careful not to define “dishonesty” too narrowly, as an inclusive list of dishonest acts may give employees the impression that other, non-listed acts are permissible.

The policy should also require employees who witness or suspect an act of dishonestly to report the act, and provide assurance that the reporting employee will not suffer any adverse employment action as a result of coming forward. Because one employee’s idea of dishonesty may be another’s idea of discretion, the mandatory reporting requirement and anti-retaliation provision are the lynchpins of an effective dishonesty policy. Giving employees an open, secure channel to report potential acts of dishonesty, regardless of the severity, can prevent a seemingly innocuous act or lie from snowballing into a complex web of cover ups, mistrust, and internal conflict.

The mandatory reporting requirement and protections for the reporter are also crucial aspects of a dishonesty policy because reporting dishonest acts by co-workers and friends is difficult. The unheralded staff member that reports a dishonest act is the hero in these situations, but too often these employees are silenced by a fear of the internal consequences of reporting a boss or peer.

Take the example from 2007 of a prominent law firm in Maine. In that case, a respected partner was embezzling client funds and stealing from the firm. A paralegal first discovered a discrepancy in one of the partner’s client accounts. The paralegal reported the discrepancy to the partner’s secretary, who then conducted her own investigation of the account. After discovering additional problems, the secretary reported the issue to another attorney at the firm, who promptly notified the firm’s managing partner.  In the end, it was discovered that the partner had embezzled almost half a million dollars from six firm clients and the firm itself. If not for the actions of these employees in reporting the dishonest act to the firm’s management, there’s no telling how long the partner would have continued to steal from the clients and partners that trusted him the most.

While it is unclear whether the firm had a written dishonesty policy, the Maine case is a good example of the power and importance of the reporter, and an illustration of why the reporting employee should be protected through the dishonesty policy. Requiring employees to come forward and protecting them from retaliatory employment actions encourages employees who would otherwise remain silent to voice their concerns. Instituting a written dishonesty policy also shows that an employer is willing to take a proactive approach to creating an honest and ethical workplace, rather than waiting for something bad to happen and putting the policy in place as a reactive measure.

Beyond instituting a written policy, to be effective, it is important that the employer communicates the policy to its employees and ideally, creates a procedure for employees to report dishonest acts, such as identifying which management staff to report to or developing an anonymous reporting system. It is not enough to simply notify an employee of the policy upon hiring or mention the new policy in a staff meeting. Any employee can disregard a piece of paper and there are always outliers that will defy a policy regardless of whether it is plastered on their office walls or buried in a handbook. The key is to create a systemic approach to enforcing the policy that will allow the other 99% of the workforce to buy in to the culture the employer is trying to create.    

These policies, coupled with a structured system of implementation, can disincentivize dishonest behavior and promote a culture of integrity, fairness, and ethics. They can also encourage honest behavior in employees’ external interactions with clients, suppliers, or anyone else the employer has relationships with. There is little downside and tremendous upside to enacting a written dishonesty policy in your workplace. Don’t wait for an act of employee dishonesty to harm your business; consider the benefits of a dishonesty prevention policy.

Nicholas Casolaro is an associate in the Litigation Department of the McLane Law Firm. He can be reached at (603) 628 -1246 or at [email protected]

Ryan King is the Director of Human Resources for the McLane Law Firm.  He can be reached at (603) 628-1361 or at [email protected].

 

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