All dishonesty is bad. Some dishonesty needs to be dealt with by dismissal and even prosecution if laws have been broken. Some dishonesty should be dealt with by a reprimand and a second chance.

Your company handbook should be very clear about the types of dishonesty that will lead to immediate dismissal. New employees should sign off on receipt of this information. Activities leading to immediate dismissal might include improper use of company equipment, bringing illegal substances into the workplace, fighting with or threatening another co-worker, or violation of specific high-danger safety codes.

Then there are offenses that are misdeeds for which warnings will be issued. Usually, dismissal will follow after one verbal and a written warning about the same offense.

If you have hard-hat, safety-glasses or safety-shoe requirements in certain areas, leaders must not violate these rules since others will follow that example. There should be no exceptions.

But making too many onerous conditions for workers to prevent minor theft can add a lot of cost to your operations.

In the assembly area of our shop, all hardware was controlled from a crib where the mechanic would go with a detailed list of the nuts, bolts and screws he needed for the project. What a time-waster that was! Beside the trip, there was the idle chatter with the attendant about the latest scores or fishing adventure. We discussed providing on-the-floor bin control for all the standard hardware items used in assembly. “But people are going to just help themselves to these items for their home workshops!” Sure, but once they’ve taken the few items they want, it will end; and the cost will be minimal compared to the lost time under the current system.

The system was installed and it works far better than expected. We now no longer even track these items. The supplier does all the tracking and replenishes the bins as needed. And there was the added benefit of reduced assembly time and cost for all the products. We did not encourage employees to take this material, and most probably did not. In this case, however, allowing for a small amount of “dishonesty” resulted in a win-win situation for both the company and the employees.