Minimizing Risk from Disgruntled Employee

June 15, 2018

Minimizing Risk from Disgruntled Employee

According to a 2015 report by the Society for Human Resources Management, employee job satisfaction is higher than it’s ever been in the last ten years. Peaking at 88%, this is a significant change from 2005 where employee satisfaction was hovering around 77%.

As of February 2018, The Bureau of Labor and Statistics concluded the workforce was almost 162 million. While that means a lot of satisfied workers, this still leaves almost 20 million workers who pose a risk to employers due to dissatisfaction. This risk comes in a variety of forms. Some are less intrusive…decreased morale, lower productivity, and erosion of company culture, while others can be catastrophic for a business. Preparation is key to ensuring that a disgruntled employee does not cripple your business.

What’s the Risk?

Public Image

Employee grumbles have become more prominent with social media and the Internet. Glassdoor is a website dedicated almost exclusively to employee reviews of businesses and management, and it is a stop for many prospective employees before pursuing employment opportunities. And for companies vying to attract top talent, a few negative reviews by disgruntled employees or the appearance of a culture where management is disconnected or apathetic can discourage applicants. The pervasiveness and speed at which information travels electronically can quickly result in branding a business as a bad place to work. Consumers too use this kind of information when making purchasing decisions often patronizing a business because of its reputation as a good place to work. Whole Foods and Costco share such loyalty.


A company’s business systems are particularly vulnerable to disgruntled employees. While the great majority of employees act with integrity even during adverse events such as poor performance reviews or discharge, a single employee can cripple and even halt business operations. Many small businesses cannot partition responsibilities and business systems such that a single employee is unable to significantly disrupt operations. Larger organizations, on the other hand, often have the technological depth and capital to support such protections. Sophisticated organizations and those with high-value information can limit what can be downloaded, emailed, imported and shared. However, this infrastructure is expensive to implement and maintain.


Theft occurs in a variety of ways. It can be obvious property theft, as in the case of stealing tools or equipment, or more discrete, where the employer may never learn of the theft until the employer is hit with a scathing review or worse, a lawsuit. And while most employers protect valuable tangible property, it is intangible property that is often easiest to steal without immediate detection. One of the most nefarious activities criminals undertake is embezzlement. These stories regularly pop up in the media and involve someone in a position of trust and power, with limited oversight, who couldn’t resist the temptation to divert funds from the business for personal gain.


The liability businesses face for failing to properly safeguard assets, whether tangible or intangible, has been highlighted in my previous posts. While inadvertent disclosure or release of information can expose a business to criminal and civil liability, the breach of trust that occurs when a business knowingly or unwittingly fails to monitor or control a disgruntled employee can force a business to cease operations. While some years ago, consider the Boeing worker who intentionally cut wires in a Chinook helicopter after not obtaining a transfer he wanted. While it appears the helicopter would never have flown due to the damage, imagine a more calculating criminal who sabotaged a computer or warning system. Notwithstanding the government has limited liability, this could have caused fatalities, and there would likely have been multiple lawsuits.

Minimizing Risk

Criminals are crafty. An industrious employee bent on damaging or destroying a business will find a way. While I have no data to support my contention, my experience is that most businesses who have to manage disgruntled employees deal with acute situations triggered by a single event or a series of events occurring in a short period of time. Here are some things employers can do to minimize risk.


Hire the right employee. It all starts before the employee begins his/her first day of work. One way to assess the level of scrutiny applied to applicants is to evaluate the level of risk if the employee goes sideways. A person who manages the financial aspects of a business warrants more, and different, scrutiny than someone who is going to chop vegetables.  Background checks, criminal history, and credit history are available and appropriate in certain situations. While they won’t eliminate risk, they are tools that can be used to create a picture of a candidate.


Make sure you have policies and procedures in place regarding company assets and reputation. Employee dissatisfaction often comes from surprise. While an employee may be frustrated with a reprimand, the blow is often more palatable when the employer can point to a specific policy or procedure that may have been violated. Inequity also fuels frustration. Aside from communicating information, the second most important role that policies and procedures play is ensuring that folks are treated equally.


Like putting locks on kitchen cabinets when you have small children, limit the employee’s ability to cause harm. Employers should conduct a risk assessment and determine wherein risk lies. A doctor’s office reliant on electronic medical records may want to limit a receptionist’s access to just that information which is necessary to manage appointments. Valuable tangible property should also only be accessible to those that have a need to use. A 2017 CNBC article suggests that employee theft costs employers 50 billion a year. Maintain controls around money and inventory. Redundancy is the key. No single employee should be the gatekeeper for the financial affairs of a business. In my first job working at a pizza restaurant, which predates computers, I remember orders being placed on a single ticket which was given to the delivery driver when delivery was to be made. Were the ticket to disappear, there would be no record of the order or the money obtained from the customer. It was not long before duplicate tickets were implemented.

More sophisticated organizations can leverage technology. Many large organizations with sensitive information prohibit the attachment of external devices to business computers. This step reduces the ability for large-scale data theft. Couple this restriction with a limitation on attachments in outbound electronic communication and another channel for siphoning a large volume of information is eliminated. Limiting inbound attachments can also reduce the risk of infecting a business system. Like a fence, these systems need to be updated and maintained to be effective.


I believe one of the most effective and least expensive methods for monitoring for disgruntled employees is for managers at all levels to be plugged into the culture and temperature of the workforce. Most unhappy employees are vocal, even if just to a small audience. Like the Department of Homeland Security’s slogan, “if you see something, say something.” Managers with good employee relations will not only be able to identify disgruntled employees but will also be able to defuse many volatile situations. And while it may be appropriate to terminate the employee, the employer-employee relationship is important in minimizing disgruntled employee risk.


Extricate disgruntled employees swiftly. Many companies have a policy, whether the termination is voluntary or involuntary, to immediately remove the employee from the workplace for the very reasons identified above. All system access is immediately suspended, and any access to physical spaces are collected. To avoid disruption to other workers, this should be done discretely and with as little fanfare as possible.


On a daily basis, businesses face risk not only from external forces but internal as well. Most businesses can point to an instance of an employee being dissatisfied with some policy or company action. While it is not possible to eliminate the risk posed by disgruntled employees, there are practical steps employers can take to promote safety and business integrity as discussed above.