THE CPA IN INDUSTRY

NOBODY WORKS HERE

By Gregory M. Lousig-Nont

Did you ever feel as if you have an extra employee named Nobody on the payroll? Nobody is the one who left the office unlocked overnight. Nobody left the coffee pot on and almost burned down the building. Most of all, Nobody is the one who has been responsible for the cash shortages, the high cost of supplies, and the inventory shrinkage. If you don't believe it, ask your employees if they are responsible for these things. As each one shakes his or her head no, then shrugs when you ask all if they know who is, you'll comprehend that you have indeed hired that elusive and costly employee, Nobody. You wonder how it is possible to escape this slippery "underminer" of profitable business. As one answer to the search for honest employees, many companies have included integrity tests among their hiring practices. These tests focus on finding those job applicants who are unlikely to steal.

Honest people tend to be more goal oriented and are able to delay gratification, while dishonest people tend to have a "live for today, I've got to have it now attitude." A trustworthy person is looking toward advancement, performing at his utmost while a high risk employee will be trying to beat the system.

Because hiring seems so simple, few companies implement plans to select good employees. When a job vacancy needs filling, most employers have the impulse to hire the first tolerable person who walks through their door, just to get the ordeal over with. However, when it comes to employing unproductive people, the cost and stress may be too high a price for such casual practices. There's interview time, recruitment advertising, lost productivity during training, cost of training replacements, and lost productivity during employment. There is also the stress encountered by present employees every time they have to interrupt their work to answer questions and train someone new. If it happens too often, it can also undermine morale. Hiring someone who is dishonest further escalates these problems. When you contemplate the full scope of these expenditures, it is sensible to hire more slowly, using a systematic procedure for target hiring.

Think about the pitfalls of the standard methods for hiring. Former employers are reluctant to reveal much information about an ex-employee's past performance because of the potential for lawsuits. References are a weak source of documentation because applicants are smart enough to provide only those names that will insure them a good reference. Credit ratings may not work because the dishonest may have better credit than honest applicants because they can keep their bills current through dishonest means. Relying on subjective assessments or gut feelings is risky because dishonest people, experts in deception, generally do well in interviews. However, this picture often changes when you use a combination of the positive aspects of these hiring practices plus an integrity test.

Don't Trust Your Luck

Not wanting to leave hiring to luck, many companies today are using the latest scientific advances in hiring. The days of filling out a standard application form and hiring on a gut feeling are gone. In the past, most employment applications revealed very little about a candidate's functional attitudes toward work. Now, having the right questions on your employment application plus a candidate's own answers from an integrity test, can give you valuable information about that person's work values. Computer testing, for example, can produce a printout after each individual takes the test, alerting the employer to undesirable attitudes a potential employee may have. Although testing should not be the "end all" of hiring, it is an extremely useful tool in finding out how a future employee thinks, giving focused information to discuss in the interview. Wouldn't you want to know why an applicant answered true to the question: "Sometimes a person may have a good reason to steal from a place where they work."

The odd thing about honesty is that while those lacking integrity don't usually admit to a dishonest practice when first confronted, they often will admit to acts of stealing when tested as part of the hiring process. But why would anyone admit to stealing in the first place? "People who are dishonest rationalize their actions. Even though, when asked, they tend to minimize how much, they are not reticent in admitting dishonest behavior." They feel their conduct is justified; they do not see themselves as being out of the ordinary. They perceive themselves as ordinary people in a dishonest world where everyone is stealing. Honest people simply do not have the intrinsic ability to rationalize dishonesty.

Most people are not intimidated by written honesty tests possibly because taking tests is such a prevalent part of our culture. Tests appear in magazines for just about everything. There are health, fitness, medical, and IQ tests. Most people do not find the tests intimidating since job applicants are prepared for an interview anyway. Statistics show that 92% of applicants surveyed found tests acceptable, while only three percent resented it. The rest had no opinion.

Employers should be cautious when deciding which tests to use. Time-tested instruments developed by reputable companies are the best bets. Employers should question the testing firms as to the validity and reliability of their tests. They should also ask if independent university-level validation studies have been conducted. A good test has a validity scale of control questions that act as built in safeguards to tip off whether test takers are answering honestly. Without this scale, tests can be faked. In addition, before using any test, companies should ask the test publisher for a copy of their Equal Opportunity Commission Study that demonstrates that their instrument does not discriminate.

Employers are beginning to realize that quality employees can mean the difference between the success and failure of a business. If you don't hire that employee called Nobody, underminer of profits, growth, and company morale, you have a much better chance of avoiding the fate of all those employers whose larcenous employees put them into debt or out of business. Keeping Nobody off your payroll just might keep somebody in your company working.

Gregory M. Lousig-Nont, PhD, is president of Lousig-Nont and Associates, publishers of Phase II Profile, an honesty and integrity inventory.

Editor:
Michael Goldstein, CPA
The CPA Journal