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Poor performance management 'can increase fraud crimes risk'

Published on 1 Jun 2009 under category: legal

Companies that are worried that sales teams may commit fraud crimes should ensure that their performance management strategy emphasises this risk, an expert asserts.

Philip Delves Broughton, writing for Management Today, says that, if a system is set up to indiscriminately reward sales numbers without taking this into account, legal problems can ensue.

He says that when bonuses are based on a single area of performance this can be harmful, as other guidelines should be factored in when a kickback is being determined.

"Only if the salespeople are equally aware of the risks of deceit and fraud can the contest run properly," he asserts.

Mr Broughton writes that committing to the wrong strategy is a mistake, as no matter a firm's dedication to this goal a bad idea can sometimes be just a bad idea.

He says businesses find setting revenue and profitability targets, which take the risk of fraud crimes into account, can focus firms' activities.

In other fraud crime news, a gang producing false visa applications has been found, with the prosecutor accusing the government of spotting the group too late.