Underpaid employees who feel they are not respected are more prone to steal at work, an authority on business ethics warns.
Employees not only outsteal shoplifters but their thieving allegedly is the cause of one out of every three business failures. The price tag on employee theft is said to be $120 billion a year--and climbing rapidly.
“Whether they actually do steal is determined by the extent to which they have been treated in a disrespectful, insensitive or uncaring manner by their superior. What they’re doing at that point is retaliating,” said Jerald Greenberg, professor of business ethics at Ohio State University.
While most of the loss to employers is from everyday pilferage of petty cash and supplies by “ordinary” employees who don’t consider themselves criminals, a new wave of gangsters is also infiltrating corporations, the February issue of Personnel Journal magazine reported.
These gangsters are stealing $8 billion worth of computer parts alone each year, among other valuables, the report said.
“Some gangs are successful at planting members within a company, often inside dispatching, shipping or accounting [departments], and others gain access by posing as temporary workers or using their position with an outside vendor to make their way into a steady stream of companies,” Personnel Journal said.
To test the role “retaliation” plays in workplace theft, Ohio State’s Greenberg studied the reactions of employees in three manufacturing plants owned by the same firm.
In two of the plants, the company cut employees’ pay by 15% for 10 weeks in response to a financial crisis but kept pay the same at the third plant.
At plant No. 1 Greenberg’s researchers were allowed to give “a thorough and caring” explanation of the need for the pay cut. At plant No. 2, however, they gave employees only a limited explanation.
Thefts at plant No. 1 rose from 3% percent to 4% of inventory after the explanation. But thefts of inventory at plant No. 2 jumped from 3% to 8%. By comparison, there was no increase in theft at plant No. 3.
“It’s bad enough when employees feel they’ve been treated unfairly. But what really triggers theft is when managers show no sensitivity to how workers feel about the inequity,” Greenberg said.
Surprisingly, some employers actually expect night-shift workers to steal as a “bonus” for their late hours, he said. And supervisors have been known to connive to allow merchandise to gather dust, after which it is sold to employees “cut-rate” as a perk.
Greenberg said workers at some businesses “engage in theft as a regular part of their lives on the job” because “they are socialized into work groups” which condone it.
These theft rings turn their companies into veritable “schools for dishonesty” at which new hires are taught how to steal.
When miners, dock workers, trash collection crews and airline flight crews go bad, Greenberg said, they are referred to as “wolves” because they tend to steal in packs. “By helping a co-worker steal, one may be paving the way for his or her assistance in helping oneself steal in the future,” he explained.
Employers can fight theft by posting notices stating how much it costs the company, setting up whistle-blower hotlines (as Georgia-Pacific has done), improving screening of temporary help, making sure employees know how their pay is calculated and by showing a little compassion.
“Wolf pack” theft can be broken up when employers rotate workers who band together to steal.
Prosecuting thieving employees can also deter theft, even if it means bad publicity for the business. As it is, Greenberg said, “they [employers] might fire someone but in terms of pressing charges, no. I call that the ‘cycle of acceptance.’ You [employers[ want to send a message that you’ll prosecute.”
Workers employed by large businesses who steal often rationalize the theft as just a “drop in the bucket,” Greenberg said. Managers need to point out that such drops can add up to a sea of red ink that can cost them their jobs.