How You Can Manage Employees who Misuse Benefits

Employees who abuse company benefits should not and must not be entitled to special treatment. Managers are often tasked to keep these subordinates under control and close watch on behalf of the Company directors and HR department. It’s not always...

How You Can Manage Employees who Misuse Benefits
Employers must put a stop to company benefit abuse as quickly as possible 

Employees who abuse company benefits should not and must not be entitled to special treatment. Managers are often tasked to keep these subordinates under control and close watch on behalf of the Company directors and HR department. It’s not always easy to attempt to put these strays on a tight leash and managers who are successful are able to respond effectively to abusive behavior.

How Employee Benefits Maybe Used Fraudulently

The misuse of benefits come in many forms: taking too much or too little time off, sick days, and medical leaves; excessive expense reports for things such as liquor or expensive meals. These abuses of the system not only cost your employer money but also deplete employee morale as well as hamper your company's success. And in some cases, the abuses can even lead to fraud charges or imprisonment.

Examples of Benefits Misuse

What benefits are widely expected to be abused?

  1. Pre-tax flexible spending accounts (often known by the much less derogatory name " cafeteria plans ") are the most common type of misused benefit.
  2. Flexible spending accounts allow employees to "save" their money in a special account in which they can deposit money, deduct necessary amounts for health or dependent care purposes, and so on.

In order to combat these problems, any organization should have a written policy that clearly states what constitutes abuse and how it will be dealt with by management.

Further Background to Incentivizing Employees

Incentives encourage employees to act in the best interest of the company by rewarding them for doing so. Incentives can take many forms, including profit sharing, performance bonuses, and cash bonuses. A monetary incentive may be the most powerful, but it is also the easiest to abuse and should only be used in combination with other measures to prevent mismanagement of company funds.

Effective Ways in Dealing With Abuses of the Benefit System

1. Making an Example of Errant Employees

Humans are pain avoiders. When someone steals from the organization, they lose trust and respect, and often fear is involved as well. By punishing the person who misuses the system publicly through demotion or loss of leave entitlements, it sends a strong warning for other employees who are considering taking advantage of the system. Once the abusive behavior has been discovered, the employee must be disciplined accordingly. Managers cannot go soft because of personal relationships and have to remain firm when dealing with the punishment.

Now of course exceptions should be made in certain circumstances, such as if in light of death or severe medical conditions. Managers should be prudent to deal with issues case by case to allow for the other party to voice out their concerns, and so on.

2. Requiring Voluntary Sign Up for the Benefit (Opt-In instead of Opt-Out)

Registered employees must sign up for the benefits offered by the company before being promoted or allowed to work with them. All benefits are made on an opt-in basis where a recommendation by their superior is required to have access to these items. This allows a narrower selection of staff to have the benefits, creating a stronger community of users who were chosen for their rationality, decency, and worthiness, before given benefits at all.

3. Tiered Benefits for all Employees

Benefits may be given out upon promotion since the increased responsibilities signal an increased trust of the employee by his or her bosses. In such a case, it will be worth considering that benefits should be given without the need for any formal application process.

4. Fewer Benefits for Fresh Hires

Only certain kinds of benefits are available to newbies, and all others should be off-limits. Since new hires may not entirely comprehend the gravity of the abuse situation, limiting the range of benefits is a great idea. The way in which they are given out to be less consummated than the standard benefits gives new employees an opportunity to learn on a small scale, instead of having to jump into all at once.

Additionally, since the pool of fresh hires can be rather large, fewer benefactors also come as a cost saving in the long run. Non-essential benefits can be withheld on a year-by-year basis to all new employees and no individual is any worse off than the last.

Creating a Clear Policy about Abuses

Clarity to the Zero-Tolerance Abuse Policy

All company policies regarding employees must be clear and equally applicable to all employees. Consistency is also key here since it underscores that the policy is not being selectively enforced. When this policy is established, the content should be communicated to all employees and often in a form that is easy to understand. Finally, any such policy must be reviewed from time to time in order to ensure that it remains both relevant and effective.

Establishing Rules & Getting Consensus

Any organization should clearly define what constitutes an abuse of company time and resources by employees and have a procedure for dealing with such abuses that is fully consistent with company policy. Policies created are then signed off by higher management and digitally signed by every employee of the organization to ensure that identical meaning is relayed to everyone. No employee thereafter will be able to disavow or "play dumb" to the fact that they are not aware of such rules.

Setting up a Complaint Procedure for Abuses

Given the fact that managers often have limited resources, they should use their time wisely by establishing a procedure that efficiently deals with abuse of benefits.

If you have employees who are abusing company benefits, then you must be informed about it. And if you do not, then perhaps you do not really need to take any action at all since the degree of severity may be so low that the problem can be managed by immediate supervisors or for situations with negligible impact, it will go away on its own. But whatever the case may be, some manual or system is required for employees to report abuses of company benefits by other employees. This is to ensure that abuse of such benefits is not ignored and can be dealt with when it arises.

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