How to Prevent Corruption in the Workplace

While it’s not a typical topic of conversation around the water cooler, corruption does happen in the workplace. Whether it’s an employee taking products from the stores, a bookkeeper skimming money from company profits, or even an employer violating a law in order to make a bigger profit, those acts are illegal and can harm the business -- and your career prospects -- in the end. Whether you’re a business owner, manager or employee, here are some things you can do to prevent workplace corruption.

1. Have clear protocols

Without a set of clear standards and guidelines in the workplace, people tend to make up their own set of rules. Thus, managers or business owners should spend the time to create an employee handbook that clearly outlines what is expected of employees and the protocols to follow should someone step out of line. That includes outlining who employees should talk to about problems in the workplace, as well as the consequences employees will face for infractions. Likewise, have a clear job description for each role in the company.

2. Foster open communication

The handbook will lay out some of the protocols employees can follow should they suspect corruption, but in addition, business owners and managers should encourage a general sense of open communication. Let employees know it’s OK to approach you when they have concerns. Schedule regular one-on-one sessions with subordinates to find out how things are going.

3. Encourage oversight in financial transactions

Ideally, you’ll have a CPA, or outside accountant helping your business stay on top of financial transactions, as well as providing the oversight necessary to spot inconsistencies in billing, payroll, or accounts receivable, suggests the Connecticut Business & Industry Association. Even if someone in-house is handling those tasks, that person should not be left alone. Have a system that allows one person to write payroll checks or pay suppliers, for example, and then have another person sign those checks.

4. Create systems of review

Even with that CPA or other professional on board, businesses need to regularly review financial records and business transactions. Every year -- if not every quarter -- sit down and review payroll checks, look at deposits, withdrawals and bank statements. As a business owner or manager, don’t make these scheduled checks, as that could alert possibly-corrupt employees that they need to cover up certain activities. Instead, make the checks at random times to bring in the element of surprise.

5. Take corruption claims seriously

If someone does report a problem or inconsistency, take action immediately. Naturally, you’ll need to follow any union protocols or employment laws that pertain to suspensions or terminations, but in any case, investigate the matter thoroughly. If you find that someone is indeed guilty, follow the protocols outlined in your employee handbook to punish the person. Depending on the circumstances, you might even hold a staff meeting to inform other employees of issue and to let them know how you’re handling it.

6. If you need to report an employer, research whistleblowing laws

If you’re an employee who suspects your employer is participating in some type of corrupt activity, get help from a government agency to help you proceed and to avoid retaliation from your employer. For example, the U.S. Department of Labor’s Whistleblower Protection Act protects workers who are reporting issues of safety or who are reporting violations of financial security, securities, consumer product, environmental, or other laws.

Corruption is always a serious issue at any business. However, if you follow the steps above then you should find that you never have to worry about it.

Image: A Fool and his Money, by Dave Goehring, via Flickr