I am faced with a tricky situation and would like your opinion on this.
A department head has highlighted that one of his team members has taken money from him citing family crisis and urgency. Because it was the weekend and petty cash was not possible at such short notice, the department head helped the employee with cash. However, it turns out that the employee is a habitual defaulter and keeps asking for money from other people in the office as well. We have also received calls from banks/collection agencies regarding this employee's defaults.
The department head has filed a complaint against him citing that the professional relationship at work might suffer and has asked HR to take action. This employee (defaulter) had recently won the performer of the month award too.
What kind of action would you take in such a case? I have already given this employee a verbal warning. However, his behavior does not seem to change. How can we resolve the situation?
From India, Hyderabad
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A department head has highlighted that one of his team members has taken money from him citing family crisis and urgency. Because it was the weekend and petty cash was not possible at such short notice, the department head helped the employee with cash. However, it turns out that the employee is a habitual defaulter and keeps asking for money from other people in the office as well. We have also received calls from banks/collection agencies regarding this employee's defaults.
The department head has filed a complaint against him citing that the professional relationship at work might suffer and has asked HR to take action. This employee (defaulter) had recently won the performer of the month award too.
What kind of action would you take in such a case? I have already given this employee a verbal warning. However, his behavior does not seem to change. How can we resolve the situation?
From India, Hyderabad
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Just send an email to the entire organization, mentioning that employees should be cautious about lending money to anyone in the office. Avoid mentioning any names. Have a private conversation with the individual again, and consider issuing a written warning as well.
From India, Delhi
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617From India, Delhi
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Dear Paul,
This is in addition to what Atul has said. My personal opinion is to somehow remove this employee notwithstanding his high level of performance. History is replete with examples wherein it shows that those who were caught in embezzlement, cheating, etc., had some sort of bad habit. Inability to manage finances is prominent amongst them. Defaulting on payment of borrowed money speaks of personal values of the employee. Therefore, be cautious and nip this kind of employee in the bud lest he may create a big problem for you in the future.
Ok...
Dinesh V Divekar
From India, Bangalore
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This is in addition to what Atul has said. My personal opinion is to somehow remove this employee notwithstanding his high level of performance. History is replete with examples wherein it shows that those who were caught in embezzlement, cheating, etc., had some sort of bad habit. Inability to manage finances is prominent amongst them. Defaulting on payment of borrowed money speaks of personal values of the employee. Therefore, be cautious and nip this kind of employee in the bud lest he may create a big problem for you in the future.
Ok...
Dinesh V Divekar
From India, Bangalore
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Hello Paul,
On one end, if we see, as HR, we cannot help much in the situation for people to recover their dues because the lending of money happened at a personal level. Ideally, the company and HR will get involved only in professional relations.
Hence, to me, if the lenders are coming with a complaint that the person has defaulted and so I should take action, it is not the right option. Because I am the HR for professional issues, and lending money was a personal issue. If the person has dues to the company, as an HR, it is my duty to ensure the person pays up or faces consequences.
On the other hand, as an HR, it is also my duty to keep my staff motivated and engaged in the company, so taking no action will result in the demoralization of employees.
Circulating an email to all your staff as suggested here will be rude, as I clarified this was a personal transaction.
You should circulate an email to all stating that "We do not encourage lending/borrowing of finances or any other items in the company. If, however, any staff member is lending anything to their colleagues, it will be their personal transaction, and the company by no means should be held liable to recover the dues."
Secondly, you can meet the defaulter and ask if he has any financial issues and then try to find out why he borrowed money from his colleagues and when he plans to pay it back. You can tell him that a lot of people have complained against him and that the company will have to conduct an inquiry if the complaints do not stop. Tell him that since he is a consistent performer at work, you would suggest he pay back the dues to the lenders as soon as possible so that no inquiry is initiated and no blacklisting occurs.
Hope this helps.
From India, Mumbai
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On one end, if we see, as HR, we cannot help much in the situation for people to recover their dues because the lending of money happened at a personal level. Ideally, the company and HR will get involved only in professional relations.
Hence, to me, if the lenders are coming with a complaint that the person has defaulted and so I should take action, it is not the right option. Because I am the HR for professional issues, and lending money was a personal issue. If the person has dues to the company, as an HR, it is my duty to ensure the person pays up or faces consequences.
On the other hand, as an HR, it is also my duty to keep my staff motivated and engaged in the company, so taking no action will result in the demoralization of employees.
Circulating an email to all your staff as suggested here will be rude, as I clarified this was a personal transaction.
You should circulate an email to all stating that "We do not encourage lending/borrowing of finances or any other items in the company. If, however, any staff member is lending anything to their colleagues, it will be their personal transaction, and the company by no means should be held liable to recover the dues."
Secondly, you can meet the defaulter and ask if he has any financial issues and then try to find out why he borrowed money from his colleagues and when he plans to pay it back. You can tell him that a lot of people have complained against him and that the company will have to conduct an inquiry if the complaints do not stop. Tell him that since he is a consistent performer at work, you would suggest he pay back the dues to the lenders as soon as possible so that no inquiry is initiated and no blacklisting occurs.
Hope this helps.
From India, Mumbai
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I would suggest stopping helping him financially altogether. We all know that this basic quote is so important in life:
"Many of the things you can count, don't count. Many of the things you can't count, really count." - Famous Great All In One
(Search On Cite | Search On Google)
Whatever is mentioned in the quote is absolutely right. Do consider this and be strict in this case. Do not pay at all.
From India, Mumbai
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"Many of the things you can count, don't count. Many of the things you can't count, really count." - Famous Great All In One
(Search On Cite | Search On Google)
Whatever is mentioned in the quote is absolutely right. Do consider this and be strict in this case. Do not pay at all.
From India, Mumbai
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Dear Paul,
People who are defaulters for non-payment of debts always remain defaulters. I feel that this is because they continue to fulfill their family's needs and demands by any means of money. Additionally, they often ask for loans to clear the debts of those who have long outstanding debts. In the end, someone has to face the fact that their debt is uncollectible. They do not hesitate to ask for loans, as they have a strategy where they plan to pay off the previous loan and then request for more, leaving the lender in a difficult position. Many loans that I have extended on humanitarian grounds have become uncollectible, and I have no option but to move on and forget about them.
Therefore, I believe it is important to warn everyone about such situations.
Thanks,
V K Gupta
From India, Panipat
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People who are defaulters for non-payment of debts always remain defaulters. I feel that this is because they continue to fulfill their family's needs and demands by any means of money. Additionally, they often ask for loans to clear the debts of those who have long outstanding debts. In the end, someone has to face the fact that their debt is uncollectible. They do not hesitate to ask for loans, as they have a strategy where they plan to pay off the previous loan and then request for more, leaving the lender in a difficult position. Many loans that I have extended on humanitarian grounds have become uncollectible, and I have no option but to move on and forget about them.
Therefore, I believe it is important to warn everyone about such situations.
Thanks,
V K Gupta
From India, Panipat
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Dear Paul,
Greetings. As an HR professional, you need to approach situations with a calm mind. Remember, it's important to avoid blaming the individual but rather understand the root cause of the problem. If the person is a good performer, they could be a valuable asset to the company. Take the time to deeply understand their habits and provide proper counseling.
Correcting a regular person is simple, but solving their underlying issues is a truly rewarding and challenging task. It's essential to address the problem positively rather than resorting to dismissal. If everyone gives up on him, someone needs to step in and offer support.
I hope you will tackle this issue with a positive mindset and work towards resolving it. Wishing you all the best.
Raghu
From India, Mumbai
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Greetings. As an HR professional, you need to approach situations with a calm mind. Remember, it's important to avoid blaming the individual but rather understand the root cause of the problem. If the person is a good performer, they could be a valuable asset to the company. Take the time to deeply understand their habits and provide proper counseling.
Correcting a regular person is simple, but solving their underlying issues is a truly rewarding and challenging task. It's essential to address the problem positively rather than resorting to dismissal. If everyone gives up on him, someone needs to step in and offer support.
I hope you will tackle this issue with a positive mindset and work towards resolving it. Wishing you all the best.
Raghu
From India, Mumbai
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Dear Raghu,
I have a strong difference of opinion with you. We run the enterprise and not a rehabilitation center for delinquents. Our objective is to satisfy our customers by running the business smoothly. We are not here to reform someone. A person who is career-conscious will be level-headed and will not play these kinds of tricks.
You have recommended counseling; however, I doubt he is of the workman category. One should not borrow money at all. One should "cut one's coat according to one's cloth." After borrowing money, someone who does not understand the importance of returning the money on time lacks common sense. Should we teach someone common sense or handle the jobs that are in the interest of the organization?
By terminating that person, a clear message will be sent to one and all. The story will be discussed in gossip for a couple of years. This is far more important, as this very informal communication shapes the organization's culture.
Ok...
Dinesh V Divekar
Dear Paul,
Greetings.
Being an HR person, you need to think with a cool mind.
AVOID SIN, NOT THE SINNER. Please go to the root cause of his problem.
If he is a good performer, he may be a valuable asset to the company.
You need to know his habits deeply. He needs proper counseling.
Correcting a normal person is quite easy; solving his problem is a really good and challenging task.
Hope you will solve his problem. Everyone will throw him out, but correcting him is the right way. If everyone throws him out, someone has to accommodate him.
Hope you will go with a positive mind and resolve his issue.
All the best,
Raghu
From India, Bangalore
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I have a strong difference of opinion with you. We run the enterprise and not a rehabilitation center for delinquents. Our objective is to satisfy our customers by running the business smoothly. We are not here to reform someone. A person who is career-conscious will be level-headed and will not play these kinds of tricks.
You have recommended counseling; however, I doubt he is of the workman category. One should not borrow money at all. One should "cut one's coat according to one's cloth." After borrowing money, someone who does not understand the importance of returning the money on time lacks common sense. Should we teach someone common sense or handle the jobs that are in the interest of the organization?
By terminating that person, a clear message will be sent to one and all. The story will be discussed in gossip for a couple of years. This is far more important, as this very informal communication shapes the organization's culture.
Ok...
Dinesh V Divekar
Dear Paul,
Greetings.
Being an HR person, you need to think with a cool mind.
AVOID SIN, NOT THE SINNER. Please go to the root cause of his problem.
If he is a good performer, he may be a valuable asset to the company.
You need to know his habits deeply. He needs proper counseling.
Correcting a normal person is quite easy; solving his problem is a really good and challenging task.
Hope you will solve his problem. Everyone will throw him out, but correcting him is the right way. If everyone throws him out, someone has to accommodate him.
Hope you will go with a positive mind and resolve his issue.
All the best,
Raghu
From India, Bangalore
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Dear,
Firstly, you work in the HR department. Apply the standing orders of the company. You should not involve yourself in private matters. If you, as HR, get involved in such matters, you may receive legal notices and end up in court. Avoid engaging in such matters.
Thank you.
From India, Hyderabad
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Firstly, you work in the HR department. Apply the standing orders of the company. You should not involve yourself in private matters. If you, as HR, get involved in such matters, you may receive legal notices and end up in court. Avoid engaging in such matters.
Thank you.
From India, Hyderabad
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