FRIDAY, MARCH 29, 2024
Workplace.ca HomeWorkplace.ca TrainingWorkplace.ca LawsWorkplace Today Workplace.ca ResourcesWorkplace.ca EventsWorkplace.ca LibraryWorkplace.ca EncyclopediaWorkplace.ca AdvertisingContact Workplace.ca


Workplace.ca is your gateway to Canadian management and workplace resources. It has all the tools you need to create and use successful management and human resources strategies.

Join IPM's Associations Online!

Renew your Membership Online!

Volunteer for IPM Associations








Ask
Trust and Occupational Fraud
BUILDING A CULTURE OF TRUST

Q: Our senior executives are getting more concerned about fraud and the level of trust. What should we consider while reviewing procedures and how to build a culture of trust among our employees?

A: Trust is one of the most important and complex issues facing Canadian companies today.

While trust within an organization is clearly necessary for employee satisfaction, efficient business operations and the resulting competitive advantages these provide, it can also create the potential for fraud, which in extreme cases can result in bankruptcy.

David Elzinga,
CA, IFA, CFE,
Grant Thornton
International
Understanding how trust relates to or leads to fraud is actually quite complicated. How do businesses determine when and where too much trust has been bestowed? How can they determine when and how trust has been breached? Trust-related fraud by its nature involves subjective, often imperceptible human processes, which makes it difficult to deter, detect and deal with.

A recent Grant Thornton white paper addresses the issues of fraud related to trust. According to the Association of Certified Fraud Examiners Report on Occupational Fraud and Abuse 2010, the majority of occupational frauds are committed by employers and managers with fraud by managers resulting in greater financial loss to the company. More than half of all cases were committed by individuals between the ages of 31 and 45. Generally speaking, median losses tended to rise with the age of the perpetrator, peaking with the 56 to 60 age group.

People are the most unpredictable investment; however, you can take a basic systematic approach to ensure that employee trust levels are justified and subsequently validated by following these steps:

  • Assess the present levels of trust bestowed;
  • Determine how much risk derives from reliance on trust;
  • Modify current levels of trust based on risk tolerance;
  • Increase trust going forward based on a “trust earned/demonstrated” model;
  • Add periodic trust validation steps; and
  • Last but not least, remember to review and adjust as necessary.

    Despite substantial evidence that the mishandling of trust within an organization can lead to serious financial loss and even bankruptcy, senior managers and owners seem shockingly willing to take the risk, placing too much trust in their employees without verification and remaining generally uninterested in implementing fraud prevention and detection services and solutions. Unfortunately, everyone in the corporate picture pays when unregulated trust results in fraud. The potential for damage is loss of morale, job loss, downsizing and stakeholder pressure. This usually leads to more organizational distrust than ever.

    Perhaps a new way of looking at the problem is required, even an alternative terminology. Trust-related anti-fraud services would be more appealing to owners if they understood that “consistent verification” of roles rather than “complete trust” in individuals is the cornerstone of effective organizational trust. Owners implementing these services would be seen not as distrusting their people, but as building a “culture of trust” and maximizing the value of trust across the company. Employees would not only accept trust-based anti-fraud strategies, but demand them, if it were clear that it was in their own best interests to do so.

    Whether the issue is repositioned in this light or not, the fact is that all businesses, particularly privately held businesses that may not have comprehensive controls in place, are at risk for trust-related fraud. It’s a complex web of issues whose solutions lie in a combination of measures: maximizing your understanding of trust, knowing the statistics (and that they apply to your business), initiating appropriate controls for your business, “controlling” your controls. You can’t trust to luck or fate. That could cost you and everyone around you.

    David Elzinga is the Global Leader, Forensic Investigative Services for Grant Thornton International and can be reached at david.elzinga@ca.gt.com.


    NOTE: David Elzinga will be presenting on "Workplace Bullying, Fraud & Investigations: Recent Trends & Best Practice" at the IPM Ottawa One Day Conference on November 1, 2011 and at the Edmonton Half Day Workshop on October 20, 2011. Click here for more details

    Get a Handle on Bullying
    MANAGING THE CONFRONTATION

    Q: With all this talk about bullying and violence in the workplace, how do you stand up for yourself?

    A: What defines a workplace bully? It is important to distinguish between normal worker conflict and workplace bullying. Bullying is defined as repeated, persistent, continuous behaviour as opposed to a single negative act and is usually associated with a power imbalance between the victim and perpetrator, where the victim feels or is made to feel inferior (Salin 2003).

    Monika Jensen,
    RPT
    Aviary Group
    Research shows that victims of workplace bullying wait almost two years before filing a complaint and have a 70% chance of losing their jobs. We note that only 13% of bullies are ever punished or terminated and bullying is three times more prevalent than sexual harassment, usually occurring without witnesses. Even when bullying is witnessed, colleagues will rarely support the bullied employee.

    Bullying should not be confused with a tough or strict style of management. Examples of workplace bullying behaviour include: silent treatment, starting or encouraging rumours, personal attack of a person's private life and/or personal attributes, excessive or unjustified criticism, micro management, verbal abuse such as name calling, withholding job related information, withholding job responsibility, replacing proper work with demeaning jobs and setting unrealistic goals or deadlines.

    Characteristics of those who bully include low-self esteem, poor communication skills, unresolved work issues and the impression they have the right to inflict controlling and abusive behaviours onto others. They often are viewed as charmers and generally liked by their supervisors. Additionally, they often bully to cover up their own insecurities and weaknesses. According to Rowell (2005), 81% of bullies are managers, 4% are peers and 5% are lower-ranking staff.

    Who is the typical victim of the workplace bully? Keep in mind that one reason bullies behave the way they do is to compensate for their own insecurities. Often the victim is a nice person, hard working, intelligent and the bully feels threatened or intimidated. Bullies also tend to pick on those who desperately need the job and are less likely to quit or resign as a result of the behaviour. According to a study in 2007 by the Canadian Workplace Bully Institute, women are targeted by bullies more frequently than men, mostly by other women.
    How do you stand up for yourself?

  • Be informed. Educate yourself as to your policies and procedures for bullying and violence in the workplace.

  • Document everything! Write down every incident, the date, time, place, details of what occurred and names of any witnesses to the incident. Keep a diary documenting what occurred including what you have done to try to stop it.

  • Stand up to the bully. Remember when confronted by a bully, do not argue. Someone has to be the adult. Let it be you. There are likely to be witnesses, so your professional response to his/her unethical conduct will carry much weight. Avoid being alone with the bully when possible.

    If you feel confident and secure in doing so, confront the bully and let them know that their behaviour is not appreciated or acceptable and that you want it to stop. You may want to ask a supervisor or union member to accompany you when you approach the bully. Remaining calm and courteous is important. With a deep breath state, “I find the manner in which you speak to me offensive and I consider it to be harassment. Please do not do this again or I’ll have to take further action.” If you cannot confront the bully, put it in writing, stating the incident with specific example of their offensive conduct and tell them how you wish to be spoken to in the future.

  • Speak to colleagues. Are they are experiencing the same thing? There is always strength in numbers. By outnumbering the bully, you will be able to stop them in their tracks. Often the bully has one target, so by gathering your forces you will have the strength in numbers.

  • Pay no attention to them. Most bullies are just seeking attention, so by turning your back to them and ignoring them you have gained control. When they realize you are not listening to them, they will lose interest or give up and leave you alone and unfortunately move on to someone else.

  • Speak to the bully’s manager. When you approach the bully’s manager, have all your documentation with you in case you get a defensive response.

  • Do not retaliate. You might be found guilty and blamed for initiating the conflict. Try instead to be kind to them. Most bullies take pleasure in knowing they are making you feel uncomfortable and hurt so do not let them see your emotional state. Not necessarily immediately, but by demonstrating that you have control over your state of mind and emotions, they may in time stop bullying you and leave you alone.

  • Climb the ladder. If all these tactics do not work and the bullying behaviour continues, rather than allowing yourself to continue be the target, advise management, HR or the union what is happening. Sometimes bullies need a resonant message to halt their attacks. You have a right to a respectful workplace.

    Finally, be willing to examine your own feelings. Are you truly being victimized or are you being overly sensitive?

    Understanding why a person bullies may help you in dealing with their behaviour. See them as humans. Understand that everyone has something that bothers them may give you some insight into how to respond to that behaviour. Knowing what bothers your oppressor and focusing on that when they try to intimidate you may create a different reaction. By realizing they are dealing with their own problems, you may increase your confidence to a level you did not know you had.

    Monika Jensen, RPT is Principal of the Aviary Group and can be reached at mjensen@aviarygroup.ca.


    NOTE: Monika Jensen will be presenting on "Managing Difficult Conversations" at the IPM Ottawa One Day Conference on November 1, 2011. Click here for more details

    The Right to Personal Cell Phone Records
    WHAT YOU SHOULD KNOW

    Q: Do we as employers have the right to request an employee’s personal cell phone records following a serious workplace accident?

    A: The use of computers and personal cell phones at work has captured the attention of many human resource professionals in recent months. This issue came up in the case of Canadian Pacific Railway Company v. Teamsters Canada Rail Conference (Case No. 3900). The issue in that case was whether the employer had the right to request an employee’s personal cell phone records following a serious workplace accident. According to Arbitrator Picher, the answer was yes.

    Malcolm MacKillop
    LL.B,
    Senior Partner,
    Shields O’Donnell
    MacKillop LLP
    In the CPR case, the employer had a policy prohibiting the use of cell phones while on duty. The employer subsequently implemented a broader policy requiring employees to provide their cell phone records to the employer where the employee was involved in a serious workplace accident, which was otherwise unexplained. Pursuant to the policy, the employer was only interested in obtaining information that identified where and when the cell phone was used. In addition, the employer did not apply discipline for the failure to provide cell phone records; rather, the employer reserved the right to draw an adverse inference against those employees that failed to co-operate.

    The union filed a grievance alleging that the policy requiring production of cell phone records was unnecessarily intrusive and infringed on the privacy rights of employees. At the hearing, the employer argued that it was necessary to obtain the cell phone records in order to complete a full investigation into the accident and to ensure safe operations generally.

    The union’s grievance was dismissed. Arbitrator Picher held that based on the safety sensitive nature of the railway industry and the limited scope of the production request, the policy was reasonable and justified. There was no other equally reliable and less-privacy invasive way of being able to complete an investigation into accidents and ensuring safety in the workplace.

    It should be noted that the CPR case does not mean that production of employees’ personal cell phone records will be upheld in every case. Before implementing a policy requiring the production of employee’s personal cell phone records in your workplace, it is necessary to consider the following points:

    1. Is the employer engaged in a “safety sensitive industry” or does the employee work in a “safety sensitive position”? In answering this question, arbitrators have considered whether the work risks the safety of the employee, other employees or persons generally, or the safety of property and equipment. If so, it will be recognized as “safety sensitive”. Examples of positions that may be classified as “safety sensitive” include employees charged with the responsibility of operating machinery in the manufacturing sector, employees in the water treatment industry, employees working with hazardous chemicals, transport truck drivers, construction managers, registered nurses, police officers and others.

    2. Does the policy address a legitimate employer concern? Has there been a series of unexplained workplace accidents that have caused personal injury, property damage or lost production? If so, this would support the policy being upheld.

    3. Does the policy intrude on employees’ right of privacy as little as possible? For example, if the policy requiring production of cell phone records is limited in scope to include only information related to whether the employee was on the phone and does not go so far as to request particulars of the conversations or text messages, the policy is more likely to be upheld.

    Another factor that may insulate Ontario employers from challenges to cell phone policies similar to the policy in the CPR case is the Occupational Health and Safety Act, which requires employers to “take every precaution reasonable in the circumstances for the protection of the worker”. If there is reason to believe that on-duty cell phone use interferes with the “protection of the worker” or other workers, it may be reasonable for the employer to implement a similar policy to that in the CPR case in order to ensure safe operations.

    In conclusion, there is a developing trend amongst arbitrators acknowledging that the use of personal cell phones at work is on the rise. In light of the changing times, arbitrators appear to be inclined to allow employers to curb this conduct in the workplace by permitting policies that ban the use of cell phones at work and require production of personal cell phone records where the employee is involved in an unexplained workplace accident.

    Malcolm MacKillop, LL. B. is Senior Partner, Shields O'Donnell MacKillop LLP in Toronto and can be reached at (416) 304-6417 or via email at mmackillop@djmlaw.ca.

  • CPTA





    Membership Directory



    New and Renewing
    Welcome the associations' new and renewing members



    Message
    Quarterly message from IPM's President, Brian Pascal.

    Ask the Expert
    Expert information on a variety of topics from our members presented in Q&A format.

    Features
    Articles of current topical interest.


    IPM's National Board
    Find out who's who in our associations across Canada

    Volunteer for IPM Associations



    Members Quarterly Achives



    © IPM Management Training and Development Corporation 1984-2024 All Rights Reserved
    IPM Management Training and Development Corporation dba IPM- Institute of Professional Management