Get Rich Soon
When Mr. Levitt made his speech to the New York University Center for Law and Business, he was fed up with the financial reporting environment that he perceived had developed in the United States. His proposals were designed to bring about significant and lasting change. There is anecdotal evidence available to indicate that change is occurring. (more…)
Some questions you can’t ask when talking to references. Questions regarding any of the following categories are illegal:
• Age
• Race
• Religion
• Marital status
• Children or childcare arrangements
• Pregnancy or family plans
• Sexual orientation
• Parents of the applicant
• Medical status, disabilities, or impairments
• Psychological or physical well-being
• Residence
• Membership in social organizations
• Union membership
• Previous use of drugs and alcohol
• Arrest record
• Visible characteristics
In addition to these, a prospective employer is prohibited by law from asking a reference (including former employers) anything that the employer is prohibited from asking the applicant directly (see Lesson 9, “Navigating the Legal Minefield” ).
Taken From: 10 Minute Guide to Conducting a Job Interview
The SEC has less direct control over instituting cultural changes in corporate managements and Wall Street than it does over the contents of financial reports filed with it, the quality of audits, and the independence of audit committees. Certainly the new diligence the commission is showing in the pursuit of civil and criminal penalties for questionable accounting practices should, over time, lead to a more transparent financial reporting culture. (more…)
The quality of information that you receive from references depends upon how well you ask questions. Here are a few things to remember:
• Don’t ask leading questions that provide the reference with the information given by the applicant. Instead of asking, “Mr. Peterson said that you worked in his unit for 5 years. Is that correct?” ask instead, “How long did you work for Mr. Peterson?” Let the reference provide the information.
• Don’t ask closed-ended questions (questions that can be answered with a simple “yes” or “no”). You want to hear what the references have to say. Give them a chance to speak freely without limiting their replies.
• Be sure to ask questions that verify basic facts such as dates of employment, salary, title of last position, duties, and so on.
• Limit your questions to those that directly relate to an applicant’s qualifications for the job (that is, the mandatory success factors—see Lesson 1, “Analyzing the Position” ).
Taken From: 10 Minute Guide to Conducting a Job Interview
In February 1999 the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees issued a series of recommendations.24 These recommendations were representative of those included in a 1987 report of the National Commission on Fraudulent Financial Reporting, also known as the Treadway Commission, named after its chairman, former SEC commissioner James Treadway.25 The Treadway Commission had been formed in 1985 to investigate the underlying causes of fraudulent financial reporting. (more…)
Getting previous employers to level with you about an ex-employee may prove difficult. Conspiracies of silence are very real. In many organizations, disclosure agreements make it next to impossible for previous employers to speak candidly about former workers.
Plain English
Disclosure agreement A legally binding agreement between an employer and an employee who is leaving the organization. The agreement purposely limits the information that can later be disclosed to prospective employers.
Whether or not employees leave under less than favorable circumstances, disclosure agreements are often used to limit the information that former employers can disclose. Some employers adhere
to the “name, rank, and serial number” approach, providing only minimal information. It’s not uncommon for such firms to restrict disclosable information to dates of employment, job title of the last position held, final salary, and a touch of murky narrative that has been carefully worded and mutually agreed upon concerning the character of the employee and the general quality of work that he or she performed.
The use of disclosure agreements is motivated by the fear of costly, and often well-publicized, defamation or invasion of privacy litigation. Ex-employees sometimes sue former employers, claiming substantial damages as a result of negative reference reports. Juries in many of these cases have been sympathetic to employees, handing down megadollar judgments against corporate defendants.
Here are some suggestions that will help you in your quest for meaningful reference information.
Think about implementing them in your organization:
• Always have applicants complete an application that grants permission to contact references. A resumé is not an application. Be sure that your application contains an authorization permitting you to contact any and all former employers and others who have knowledge of the applicant’s work history, experience and education, and that allows them to provide information about the applicant.
• Include a “hold harmless” agreement with your employment application that will prevent former employers from being sued by an applicant as a result of releasing reference information. Then send a copy of the signed agreement to each reference before contacting them. Hold harmless agreements can go a long way in lowering the guard of former employers.
• Check references before interviewing those you’ve selected for further consideration. Having done so will not only provide a better understanding of each applicant, but it
may also direct you to areas that require further exploration.
• Check references yourself—don’t assign the task to others. Managers will have more success talking with other managers. Also, by contacting references directly, the manager can listen intuitively to what is (and is not) being said.
• Be sure to ask each reference for the names of others in the organization who may be familiar with the qualifications of the applicant. It’s astonishing how much information you can obtain from those whose names weren’t provided by an applicant.
• Share the information received from reference checks with other members of the interview panel.
• Always contact colleges and universities to verify degrees. The most common form of deception involves applicants who overstate educational accomplishments. Colleges and universities are eager to provide information about the academic achievements of former students. It’s fast and easy information to obtain.
• Document all information that you receive. Your documentation will be vital if you ever have to defend your actions.
• Don’t contact only one or two references. Make it a practice to contact all of them, without fail. And be sure to ask each reference to provide you with the names of others who have knowledge of the applicant’s skills and work experience.
Plain English
Intuitive listening Being sensitive both to what is said and to what is not said. It is the message conveyed by a hesitation, a reluctance to discuss a matter, or an obvious desire to change the subject.
Taken From: 10 Minute Guide to Conducting a Job Interview
Regardless of how impressive a candidate may seem, always verify academic credentials and check the references provided. No exceptions.
Hiring mistakes are expensive. They take a major toll on an organization’s finances and employee morale.
A few years ago, a Minnesota firm hired a chief financial officer whose resumé stated that he had graduated with honors from a prestigious Ivy League university with an advanced degree in accounting. The candidate had interviewed well and had impressed management with his prestigious background.
Management was so convinced he was the right man for the job that they immediately offered him an excellent salary and benefit package, and included some truly exceptional perks such as a liberal stock option arrangement. But in their rush to fill the position, no one bothered to verify the individual’s educational credentials.
Almost two years later, a federally mandated audit revealed that the company’s financial records were in a state of absolute disarray. That’s when the board of directors decided to take another look at the resumé of their CFO. When they contacted the Ivy League university listed on it, they learned that the closest this individual ever got to the prestigious campus was, in all likelihood, driving down the freeway that passed nearby.
The result: embarrassed managers, an irate board of directors, a demoralized staff, the loss of a federal contract worth more than a million dollars, and an expense of $185,000 for an outside accounting firm to repair the company’s financial records. And all of it could have been prevented with a five-minute phone call to the Ivy League university to verify a degree.
Will performing thorough reference checks keep you from making hiring mistakes? No. But your percentage of bad hires will decline significantly. In fact, some informal research conducted by my organization suggests that as many as 85 percent of hiring mistakes can be avoided by thorough reference checks.
Reference checks present a genuine opportunity to learn more about an applicant. Former employers are in the best position to provide useful information about a candidate’s skills, abilities, prior work performance, and character.
TIP
Consider asking candidates to submit as many as ten “personal” references that may include previous employers. That way, when you contact a former employer, you can truthfully explain that the applicant provided his or her name as a “personal” reference (instead of as a former employer or business reference). This approach usually yields
better information, and more of it.
Taken From: 10 Minute Guide to Conducting a Job Interview
The SEC’s newfound diligence on cleaning up corporate financial reporting went beyond even the civil and criminal cases brought against company managements. The SEC is aware that auditors may play a role in permitting accounting problems at the companies they audit. Thus, as part of his division’s crackdown, Mr. Walker announced that it would begin bringing enforcement cases against “weak-kneed auditors.”21 In particular, the division is concerned about cases involving auditors who also are providing consulting services for fear the auditors were not being as diligent in their pursuit of reporting problems. (more…)
Workplace crime involving assault, terrorism, fraud, arson, theft, and even murder is on the rise. In fact, statistical evidence from the United States Department of Labor identifies violence in the workplace as one of the fastest-growing causes of death on the job. Moreover, studies seem to demonstrate a strong correlation between past criminal activity and job-related crime.
Most states have already adopted the legal doctrine of ” negligent hiring ” and “negligent retention.” These legal theories maintain that an employer is liable for the harmful acts of an employee if the employer knew—or should have known—of similar incidents in the employee’s
background. An employer’s negligence is based on the fact that, had the employer done an adequate job of evaluating and investigating the applicant, the harm would not have occurred.
Plain English
Negligent hiring The failure to exercise a reasonable amount of care in recruiting and selecting a candidate for a job, which ultimately results in injury or damage to another.
In the past, employers were considered liable for the acts of an employee while performing the duties of the job. Today, under the tort of negligent hiring, employers are liable for the harmful acts of an employee even when those acts are beyond the scope of the job.
The legal adage remains true: The best defense is a good offense. Thoroughly checking an applicant’s employment history and personal references is the best way to keep your workplace safe and avoid becoming embroiled in costly negligent hiring claims.
Taken From: 10 Minute Guide to Conducting a Job Interview
However, even after this wide-ranging series of civil actions, the SEC was concerned that some managements still might not be convinced that it was serious about cleaning up financial reporting in the United States. Accordingly, within months of the announcement of the civil actions against the 15 firms, the SEC announced that it would work more closely with criminal prosecutors to attack corporate accounting (more…)
