As your business grows and you add more employees and bring functions in house, you’ll need to hire managers to help you share oversight and responsibility. Some of your supervisors, directors or executives might not act with the best interests of the business at heart, taking shortcuts, not delivering their best efforts or stealing from you. Knowing common ways managers behave unethically will help you put measures into place to prevent this behavior.

Taking Undue Credit

Some managers take credit for the work of others, which can result in you giving unqualified managers more responsibility and losing key employees who are frustrated by a lack of recognition. Make sure each person in your organization has a written job description, and make those job descriptions the basis of written reviews. Seek feedback from employees that lets you evaluate how subordinates view their superiors.


Many people have “pets,” but favoritism can reach a point where it damages your productivity and costs you key workers who leave because they don’t get recognized or promoted. Set parameters for how workloads should be assigned and how promotions, raises and bonuses are given. Make sure managers know they should be ready to explain their rationale behind employee decisions, including how they assign tasks, award sales territories and give promotions.


Some managers can get you into legal trouble with insensitive comments or blatantly offensive conduct. In addition to sexual harassment, managers can harass staff with comments about race, religion, political affiliation and physical handicaps. A manager who consistently insults a worker in front of his peers might leave a paper trail of abusive emails and memos. Some managers have employees perform personal tasks, such as running errands or performing work for the manager that is unrelated to the company’s business. In extreme instances, managers might be physically abusive of employees. All of these can lead to your being fined for violations of state and federal workplace regulations. If you can’t afford to hold sensitivity training sessions, include written policies governing behavior in your company manual and require managers to read and sign acknowledgment of them.


Some managers perpetrate fraud by submitting falsified reports that show they have completed work they haven’t done, turning in false expense reimbursement requests, awarding contracts to vendors and suppliers that provide a kickback, selling information to competitors, stealing or using company supplies or property for personal use, funneling company money into their own pockets on an ongoing basis or embezzling significant money before leaving the company. Work with your accounting department to set up internal controls that limit how employees can award contracts, request payments and receive funds.