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To print this newsletter, click here. by Linda Carter ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ DISHONESTY IN THE RETAIL STORE ENVIRONMENT - PART 4 (FINAL) The best time to weed out dishonest employees and the problems they cause is by not hiring them in the first place! There are too many retailers who do no checking at all of potential new hires. At the minimum, you should be checking references to see if the prior employers would hire this person again. A criminal background check is also a good thing to do. A drug test is also an excellent tool to use. People who use drugs, which are illegal and expensive, are more likely to have need for cash beyond their paycheck and more willing to use illegal means to obtain it. Another tool the store owner has is what is called an “Integrity Test”. This is a test taken either with paper and pencil or on-line to check the applicant’s potential for dishonesty. The goal of these tests is to eliminate the candidates most likely to steal from the company. They are, however, no guarantee that the person you hire will not steal sometime in the future. We have reviewed a number of these tests in our office and following are 4 that we feel did a good job. 1. The Reid Report Test The test is not lengthy (50 questions) and the questions are worded in such a way as to leave much gray area to be defined by the prospective employee. It is through this definition process of the gray area that the patterns start to emerge. To review this test, we used an on-line format. The test-taker remarked that the font was small and difficult to read—enough that it slowed the test taking procedure some. However, this is a well-rounded test that measures attitude, social behavior, substance abuse and work background. Vangent, currently marketing the Reid Report Test, can customize the test for an individual company and the test can be administered on a computer or by paper and pencil. Cost in June of 2008 was $20 per test. For more information on the Reid Report test click here. (web-site link: http://www.vangent-hcm.com/Solutions/SelectionAssessments/) 2. IntegriView: also active members of the National Retail Federation. This was a well-rounded, well-worded test. The test-taker commented that it would have been helpful to freeze the answers so that as the screen scrolls up the answer choices remain visible. The questions are positively worded and not, in any way, offensive to the test taker. The IntegriView test further suggests questions for a business owner to ask to clarify anything that has potential to be a problem later. This test is also available printed and/or online. The base price of this service is $12 per test, but there are volume discounts. There is no annual fee and no contract. For more information on the IntegriView test, click here (http://www.integriview.com/index.php?Action=). 3. Smart Moves: In review, the SmartMoves! test, also easy to take, seemed almost totally focused on drug usage. While that may be a leading cause of theft, I thought the questions were repetitive and related to drug usage almost exclusively, not to integrity. However, the test was quick and easy- both easy to read and not open to much interpretation by the test taker. Both questions and answers were very black and white. For more information, click here. (http://www.smartmovesinc.com) 4. Psych Tests This site was set up to be a self-test. My test-taker scored a 91 out of a possible 100, which according to the results means she should assumed to be an honest employee. The cost to purchase the report was $6.25 per test as is on-line. Test took about 25 minutes. Questions were well-worded, the font was easy to read. All answer choices repeated with each question. This test provided answer choices that were varied with little interpretation needed. This company will re-work their master test for individual purchasers on company letter head or will score the test in greater detail for a price. To get more details on pricing information for your company, click here (http://www.psychtests.com/about/faq/commercial.html). Store owners have a responsibility to themselves, their store and their employees to try to keep people honest. In addition to properly screening out dishonest people so they are not hired, the other step that needs to be taken at your store is to build an atmosphere of honesty so people not only are not tempted to steal but will alert management if they see another employee stealing. This can be difficult. A number of years ago, Peter Berlin, in the Berlin Report told about what he called the “Code of Silence” that keeps an employee from turning another employee in to management for dishonesty. According to Peter, this goes back to the childhood honor system of not ‘ratting’ on siblings or friends. This has been carried forward into adulthood and keeps honest employees from reporting dishonest co-workers to company management. One way to combat this is to hold a company meeting in which employee stealing is addressed. Company management needs to let employees know that dishonest employees are hurting not only the company but the other employees as well since management may have to reduce costs in other areas to make up the losses. This can result in lower benefits or elimination of bonuses. One way to encourage employees to report dishonest activity is to have a “hot line” they can call and give anonymous tips to management. That way they are doing the right thing but no one needs to know who reported the problem. Management must also accept it’s share of the blame for employee theft. If attitudes and controls are lax it sends the message to employees that management does not care. Employees then feel it is OK to take merchandise for themselves or to help themselves to cash in the register. This is why it is very important that managers and owners scrupulously follow all procedures so there is never any appearance of unethical actions on their part. If the owner wants to take merchandise out of the store for personal use, the appropriate paperwork must be done so employees can see that even the owner follows all the rules. We hope this series has been an eye-opener to many of you out there. Shrinkage CAN be reduced! It is up to YOU to make sure it happens. QUOTE OF THE MONTH AUGUST SALES SURVEY To remind everyone, this survey concerns August sales.
OPEN-TO-BUY SERVICE TELE-SWAP GROUPS
Comments from just a few of retailers taking part in these teleconferences are:
If you would like to discuss the types of issues listed above, and others, with retailers who are similar to you, but far enough away they are not competitors, give us a call at 1-877-206-1299 or on our web site at http://www.the-retail-advisor.com/peer_groups_tele-swap.html. Then you can complete an online application. Once I get your application I will contact you about joining a group to take part in a monthly one- hour teleconference call. The biggest commitment will be the one-hour a month for the call. The cost is minor at just $180 for a 6 month commitment (just $30 a month). Click on the link above and join a group today! KEEP YOUR EMPLOYEES HONEST & INCREASE YOUR BOTTOM LINE! If you can reduce shrinkage by 1% that is an additional 1% of profit for you. As the owner it is your job to provide the procedures, checks and balances to keep your employees honest.
Fortunately, I can help. As controller for a 5-store chain of family apparel stores and with my experience working with retailers around the country as a retail management consultant I have developed a manual to help you with this. It is our "Internal Control Manual" that covers all aspects of a retail store's operations. It is set up in an easy question and answer format where a Yes answer means things are OK and a NO answer means you may have a problem that needs further checking To get a copy for your store, for just $95 shipped Priority Mail, visit our website at http://www.the-retail-advisor.com/internal_controls.html. Do not wait until you discover that a trusted employee has stolen $70,000 from you (like a retailer I know had happen to him last year). Take steps now to make sure your merchandise and cash are as safe as you can make them.
Most job descriptions are 2-4 pages long. Your investment is just $25 for the complete set, including shipping. To order, mail your check to the address below and we will mail the job descriptions to you: Job DescriptionsThe Retail Management Advisors 510 Red Oak Street Allen, TX 75002 WHAT WE DO . . . To print this newsletter, click here |
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