Employee dignity as crime prevention strategy

When it comes to sticky fingers at work, we’ve heard plenty about Bernie Madoff and the folks at Enron, but we shouldn’t ignore what happens when rank-and-file workers start walking off with the store, perhaps a little too literally.

Employee theft: Worse than shoplifting?

New York Times labor reporter Steven Greenhouse recently shed some light on the problem of employee theft:

At the Saks flagship store in Manhattan, a 23-year-old sales clerk was caught recently ringing up $130,000 in false merchandise returns and siphoning the money onto a gift card.

. . . Employee fraud involving gift cards appears to be growing sharply as retailers struggle to contain overall theft, now estimated at $36 billion a year in the industry, or 1.51 percent of retail sales, according to a leading national study.

Indeed, internal theft may be more of a problem than shoplifting:

Retail experts say they can only estimate what portion of their theft losses can be traced to employees, to shoplifting and to vendors, but they view their own store workers as the leading culprits. The national study, based on information obtained from 106 retail chains that responded to a questionnaire, said employees were responsible for 43 percent of the stores’ unexplained losses, versus 36 percent for shoplifting.

A secret to preventing employee theft?

Buried deep at the end of the article are some clues to addressing the problem.  The principal author of that national theft study, Professor Richard Hollinger, notes that:

…the rate of theft is greatest among retailers with high turnover rates and many part-time workers, who may be less loyal and under more financial pressure than full-time workers.

He also found higher theft among younger workers. “Older workers know they have a lot more to lose — promotional opportunities, health insurance, 401(k)’s and pensions,” Professor Hollinger said.

Hmm, could it be that treating workers well and paying them decently is one way to stave off employee theft?  Reading between the lines, it appears that longer-term workers who are loyal to their employers and who have a decent financial stake in their jobs are less likely to steal from their employer.

No, I’m not defending theft as the right of an underpaid retail store worker.  But I am looking at realities.  The literature on organizational justice tells us that workers who are disgruntled or who feel mistreated are more likely to seek payback.  Forgive my profiling here, but that young temp who feels exploited and underappreciated may be a more likely candidate to walk off with a gift card or two than a permanent employee who feels a part of the store.

Employee dignity as a crime prevention strategy…imagine that!

Link to Greenhouse article: http://www.nytimes.com/2009/12/30/business/30theft.html

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