05/ 30/ 2007
Q. "My employees travel a lot, and they're usually careful about what they spend. But recently one of them turned in a receipt for a steak dinner fancier than anything I've treated myself to recently. It made me wonder if I needed to institute a per-diem policy for those on the road. Is this a good policy for my business?"
A. Probably not, says Neal McDonald, who's on the Special Expertise Panel on Ethics for the Society of Human Resource Management. "Per diems are good because they set limits, but they're also quite restrictive and require enforcement that can be damaging to morale. Another downside is that per diems can raise overall travel costs. If you have one abusive employee and 20 thrifty ones, giving the thrifty ones a dollar amount they may spend each day could encourage increased spending.
"The good news is that most employees will respond when expectations are made clear. So before you resort to a strict per-diem policy, talk to your employees about what you consider to be a reasonable per diem, and ask that they make reasonable decisions when they're traveling on company time. You can also provide them with guidelines that set a mid-range for per-diem expenses, but also provide flexibility when it's needed.
"As for the employee who treated himself to the fancy dinner, let him know that you think it was extravagant, and that if you deem an expense too costly in the future, you may not provide full reimbursement for it.
"No matter which way you decide to go, it's definitely a topic you need to address. Frivolous travel expenses here and there add up over time and will eventually affect your bottom line. Plus, consistency in practice is good management—and it's good for morale."
NFIB.com
Have more questions about business travel practices? Look in "Workplace Policies" in the "HR" section of www.NFIB.com/ toolsandtips.
