Loyalty to one’s workplace is a vital component of employment. Decision making and actions by employees should be fair and always within the interest of their employer. Lower staff numbers in a small business make conflicts of interest easy to spot, damaging workplace culture and staff trust. Follow the steps below to identify, prevent and deal with conflicts of interest.
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Types of Conflict
The most well-known type of conflict, this involves family members or friends who are working together at the same company. As a result, favouritism and benefits due to the connection could cause biases in decision making.
Involving two employees who have a romantic relationship which has developed outside of the workplace. This can result in unequal treatment of certain employees over others for promotions or other opportunities.
An employee accepting gifts from a vendor can, in turn, cloud their judgement and motives when dealing with that particular vendor. For example, the ability to act in the best interests of your business could be impeded on by a staff member receiving bribes. Further, the discovery of financial conflict could impact the reputation of your business.
A current employee working for a competitor or uncovering trade secrets to a third party. Consequently, personal staff information or details about the goods and services that you offer could be revealed.
How to Prevent Conflicts of Interest
1. Ask Employees to Disclose Any Conflicts of Interest
Honesty really is the best policy. Asking future employees directly to report any conflicts of interest allows for transparency. Ultimately, this approach helps you to decide whether you should proceed to hire them as an employee and the implications for your business.
2. Create a Conflict of Interest Policy
Drafting up and creating a Conflict of Interest Policy is vital for every business.
- Types of Conflicts
- Identifying Conflicts
- Managing Conflicts
This establishes the expectations of your business and your staff. Staff should have a copy of the policy they can refer back to throughout their employment.
3. Avoid Nepotism
As the owner of a small business, you have the ability to decide who you wish to hire. Certainly, family and friends are an easy option as you know of their skills and suitability. Yet, as a rule of thumb, you should avoid hiring relatives or friends and if you do, make sure you hire them based on merit. Above all, this can ensure, as an owner, you are preventing any possible conflicts that may impact on your decision making.
4. Create a plan for managing conflicts of interest in your small business
In the event that a conflict of interest does arise, prepare yourself with a plan to resolve the conflict. Mapping out all the steps and how to move forward can be found in your Conflict of Interest Policy. Further, including a mediator within your resolution may help you come to an agreement with your employee about the next steps. Hence, this allows smooth conflict resolution without major disruption to your business.
A conflict of interest can have harmful impacts on workplace culture, decision making and company loyalty. Providing your business with the tools to identify conflicts of interest, how to prevent and resolve them is essential. Hence, a Conflict of Interest Policy is the first step to ensuring your employees understand the expectations of your business.
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