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Eliminating The Bad Element From Workplaces

One Dozen Powerful Strategies For Avoiding Thieves, Spies, Con-Artists And ... Employees Who Are Snoops, Whiners, Stoned, Schemers, Hackers, Psychotic, Violent, Litigious, Liars and Otherwise Disasters

By Don Phin

As I tell my clients, if it’s out on the street, it’s in your workplace. If there are people “out there” who are abusive, harassing, discriminatory, violent, unethical, uneducated, drunk, drugged or otherwise felonious, then the possibility exists that they may be working for you! Somebody’s hiring them! For example, 75% of all drug abusers have jobs, costing American business more than $120 billion annually. Bad employees not only steal property, but they also injure clients and other employees, file frivolous lawsuits, generate legitimate lawsuits, create bad press, contribute to employee turnover and, ultimately, can cause business failure.

In my years as an employment law attorney, I have seen every form of bad employee. What follows are some insights on how to keep these cancers out of your workplace.

1.   Decide What You Stand For. Every company will gravitate toward the lowest common denominator unless it is clear about what it stands for. Many companies’ management tolerates less than the best when it comes to employees-simply because they haven’t decided not to. It’s not an integral part of their corporate vision, mission, ethics, goals, values, core beliefs, etc. to keep bad employees out of the workplace. All of the strategies suggested below require buy-in from the top. As owners, managers, and human resource professionals, you have the opportunity to communicate to employees and job applicants what your company stands for and what it doesn’t.

2.   Don’t Hire Bad Employees. The 1932 Johnson & Johnson Company Employee Relations Manual stated, “If workers are carefully selected, the problems of discipline will be negligible.” Words to the wise...given the size of the “bad employee pool,” as well as our litigious nature, any company that does not spend the necessary time on the hiring process is only asking for trouble. A few years ago a fellow attorney worked on a case where a documented felon kidnapped, raped and murdered a convalescent home resident. Despite complete dependency on staff for safety, no background check was ever done at the time he was hired. Unfortunate both for the companies and the victims of their employees, the courthouses of the country are filled with too many such cases.

There is simply no substitute for drug testing, background checks, reference checks, DMV searches, criminal and credit checks, review of school transcripts, etc. In our experience, companies fail to take these precautions because they believe they don’t have the time or the money. If you’re unwilling to take your time, then find someone else to do it for you. There are plenty of excellent agencies, investigators, etc., available. The cost of these efforts shouldn’t be an issue. Even for a minimum-wage employee, the cost of a thorough background check should be less than a week’s pay.

Very simply, the dollars spent on the hiring process are many times more cost-efficient than those spent on managing employee failure. Don’t fall victim to your own excuses. The human nature factors of desperation, laziness, infatuation and ignorance can’t be allowed to get in the way of sound management practices.

3.   Don’t Underestimate the Risk. Some companies simply under-appreciate the “bad employee” risk because they have yet to feel its pains. They have yet to have an employee attack a co-worker. They have yet to have their CPA embezzle money. They have yet to have the warehouse supervisor dealing drugs. They have yet to be hit with a million-dollar sexual harassment lawsuit. Don’t be one of those companies “comfortable” with the way they manage employees. There are times when you don’t want to learn from a painful experience. The risk is real; we hope your appreciation of it is real too.

4.   Don’t Turn Good Employees Into Bad Employees. Many employees take the low road in response to poor management practices. It may be because they’re overworked, under-appreciated, or given financial incentives that generate unethical conduct. The retaliation may be the sabotage of a project, the theft of equipment, or complaining to customers. We have seen plenty of employees “strike back” at perceived inequities. Treat employees with respect and responsibility, and chances are you’ll get it in return. As Norman Vincent Peale said, “You get what you focus on.” If your employees are focused on what’s right about what they do, then that’s what you’ll get. People with high self-esteem won’t rip you off. They won’t humiliate or fight with a co-worker. They’ll focus on being an excellent employee as opposed to a bad one.

5.   Don’t Ignore, Bury or Deny Wrongful Conduct ... Investigate It! It’s a natural tendency for us to look the other way. Few of us want to believe that Mary has a drug problem or that Ralph has been spending an inordinate amount of time with his secretary. We deny that our buddy Joan could be giving trade secrets to a competitor, or that Mike has a tendency to lie about his ability to get projects done.

None of us enjoy dealing with bad news or bad employees. But we must, swiftly and thoroughly. If you hear a rumor, follow up on it. If you receive a complaint, acknowledge it and get to the bottom of it. If you don’t know what you’re doing, get someone who does! The U.S. Supreme Court recently drove home the point that the effort you take to avoid improper conduct will go a long way to whether or not you have a defense against it. You’re cautioned that if you intend to use an attorney to defend against any potential lawsuit, that attorney should not be used to investigate the underlying complaint.

6.   Don’t Assume Executives and Managers Aren’t a Risk. Do the words Convair, Dalkon shield, Three Mile Island, DES, Lockheed, Love Canal, Johns Manville, Nestle, Pinto, PCB, tobacco, Texaco or Mitsubishi mean anything to you? One of the biggest mistakes we see companies make is thinking that “bad employee” issues relate only to rank-and-file workers. We never hear of postal executives going berserk, only “workers.” We don’t think that executives have drug and drinking problems; we somehow fantasize these are only rank-and-file problems. We don’t have checks and balances with our executives because of their perceived integrity.

We have seen plenty of “million-dollar executives” and they aren’t called that because of what they’re paid, but because of the damage they did to the company. In many of these situations, the signs were there, but the company failed to do a thorough background check. The fact is, losses from executives gone bad costs American business 16 times as much as those generated by rank-and-file workers! Remember, the higher the position on the company organization chart, the greater the risk exposure.

7.   Don’t Assume Everybody Knows the Rules. The typical approach is to put a Standards of Conduct section in the employee handbook which is reviewed by the employee at the time of hire. That’s it. Some education process! When you raise children, you let them know that theft and drugs and violence are wrong. Chances are you didn’t talk to them about it just one time. If a message is important, then it is worth repeating. Remind your employees about the rules on a regular basis so that there is no “slippage” in conduct. Remember, don’t assume they know the rules; make sure they do!

8.   Protect Yourself With Written Agreements. Whether it is a paragraph in an employment application or a full-blown confidentiality agreement, there is no substitute for protecting yourself in writing. Your employment application should contain consent to pre-employment inquiries, as well as language indicating that lying on a resume or job application is grounds for termination. Your stock option agreements should contain a “bad employee” clause. Likewise, there is no substitute for failing to have confidentiality, trade secret, non-disclosure and other written protections. If it has value, then find a way to protect it in writing.

9.   Watch Out For the “One Bad Apple” Syndrome. Trust is the most important factor in the workplace. There is a delicate balance between protection and the generation of mistrust. For example, one person stealing office supplies can cause the locking of supply cabinets, thereby sending out a message to all employees that they cannot be trusted. Under that circumstance, you may “protect yourself” at the expense of employee commitment and loyalty. Why should they trust you if you don’t trust them? When approached with such a problem, ask first “What is the opportunity?” as opposed to “How do we solve this problem?” Most petty theft is done out of expediency, not the desire to “rip off” the company. If pens, markers and paper are missing, then make them available at your cost.

10.   Watch Stepping on People’s Privacy. Today’s technologies have provided us with ever-intensive ways to intrude on employee privacy. Video, voice mail, the Internet, blood testing, urine testing, DNA testing, psychological testing, and high-tech surveillance are dangerous tools in the hands of the paranoid. Just because you can put a video monitor the size of a cigarette in the warehouse does not mean that you should. Just because you can tap into voice mail and Internet messages does not mean you should. Some of the largest verdicts in the recent years have been against employers who have gone too far. Before engaging in any such effort, make sure your employees know what you’re doing and why you’re doing it. If they can’t buy into it, then reconsider it.

11.   Ask, “Is There a Problem Here?” In our experience, most employers do not take a proactive approach to weeding out problems in the workplace. Because they don’t, those problems tend to eventually spin out of control. Waiting for a problem to come to you is a risk proposition. A recent Wall Street Journal article reported that more than 40% of employees would not disclose an ethics violation. In few, if any, of the sexual harassment or other type of employment cases filed does an employee ever avail themselves of a grievance system or let the management know they’re being harassed or discriminated against. Today’s employees find themselves sitting in a “culture of silence.” They are either afraid to speak up or don’t consider it their position to do so.

To break through this mentality, it is imperative that you circulate surveys or questionnaires, making sure they are educated on these issues and then asking whether or not they have been a victim of or witness to any legal or ethical wrongdoing. Very simply, there’s no substitute for this formula for education and asking if there’s a problem.

12.   Make Sure That What You Say and What You Do is Based On the Facts. Many an employee accused of wrongful conduct or terminated for same has retaliated with a slander or wrongful termination type lawsuit. If you’re going to say anything or do anything, make sure you are making a rational decision based on facts and not an emotional one based on assumptions. Don’t trust somebody’s word for it. Conduct an independent fact-finding investigation. Make sure there are no mixed motives involved. Companies have recently been hit with multimillion-dollar verdicts for over-reacting. Remember that two heads are better than one. Get some help. Call an attorney, an investigator, or a friend whose insight you trust. Whatever you do, don’t you or any of your managers attempt to go it alone.

Risk management is about possibilities and probabilities. It’s about assessing the 80/20 of exposure and then committing the strategies and tools needed to protect yourself. I hope these insights will help those of you battling on the front lines. If you have any questions regarding the trials and tribulations of managing in today’s high-risk environment, e-mail or give me a call at 800-234-3304. 

riskVue | The webzine for risk management professionals
November 2000