From the July 2010 issue of Entrepreneur

Q: What should you do if an employee is lying to you?

A: Much as you'll want to call bullshit on the spot, Pamela Meyer, author of Liespotting: Proven Techniques to Detect Deception, recommends you take a deep breath, then:

Gather Evidence. Wrongfully accusing someone can seriously damage morale. Get the facts in writing or e-mail and observe the employee's behavior.

Set up a time to talk. Most lying is done by phone (scientists have actually studied this). And, of course, lying is even easier with e-mail. So schedule a face-to-face meeting with the employee. Just remember: It's not an interrogation. Keep it professional by making it easy for an employee to save face and say, "I'm sorry, I must have misunderstood." Ask simple, open-ended questions ("What did you do on Friday?" "How do you feel about your work here?"). If the employee continues to be evasive, change the subject until you have reestablished rapport and then come back to Topic L from a different point of view. Don't directly call the person out--it won't accomplish anything.

Take appropriate action. If you discover that an employee violated company policy or the law, you must act--from starting probation to notifying authorities. If it's something less serious, just state that the company doesn't tolerate deceptive behavior.

Small-business owners are often victims of employee deception because they're too busy to pay attention, Meyer says. "But don't be paranoid. It only matters if deception or fraud is hurting your company. Social interaction sometimes relies on white lies, and deception is a fact of office life. If everybody was completely honest, we wouldn't have any friends or colleagues left."

The Tells
In poker, they call it a "tell": A subtle cue that gives away the weak hand behind the player's bravado. Liars have their tells, too, and Pamela Meyer offers some of the most common, drawn from research, interrogation methods and facial recognition techniques taught in intelligence training programs, police academies and universities.

  • An asymmetrical smile or frown, or shrugging with just one shoulder.
  • Extended eye contact (honest people look you in the eye only 60 percent of the time).
  • Sitting completely still, or moving just one body part (a single jiggling leg or waving arm).
  • Flashes of anger or surprise that are quickly repressed.
  • Fidgety, quick touches to the eyes or mouth.
  • Over-talkativeness.
  • Speaking more slowly and deliberately than usual.
  • Lame denials and vague statements ("I don't know what you mean.." "I was out.." "It was a busy day."
  • Repeating questions or phrases to stall for time.