As a side effect to the troubled economy, we’re noticing more stories about an increase in employee theft. We haven’t seen enough to know if this reputed increase is statistically true or anecdotal, but theft by employees is a massive problem that occurs in good financial times and bad. It stands to reason that there might be a spike when times are tough. It’s a good time for employers to dust off and tighten up their loss prevention practices and policies – here’s a checklist for preventing employee theft excerpted from the Small Business Fraud Prevention Manual issued by the Association of Certified Fraud Examiners.
If indeed we are seeing a spike in employee theft, there may be other reasons to account for the increase than the economy and there may be other solutions to loss prevention than the traditional ones. For another perspective on employee theft, see Bob Sutton’s recent post on an innovative employer approach to stopping employee theft . While there are various root causes of theft and need may certainly be one of them, Bob notes that, “The most extensive and impressive stream of research on employee theft has been conducted by Jerald Greenberg, who has done a host of laboratory and field studies (e.g, in manufacturing plants and retails stores) that show stealing is driven, in large part, by employees’ desires to “get even” with companies and managers who treat them in cold and unfair ways.”
While “the economy” and “getting even” may well be motives for theft, Bob goes on to cite a fascinating case of employee theft at a sawmill in which the underlying motive was largely “for the thrill of it.” At this particular plant, organizational consultant and researcher Gary Latham worked with management to institute some creative measures to stop theft. The company introduced a “library system” where employees could borrow the type of equipment that was being stolen. Management also launched an amnesty campaign, during which employees could return any stolen goods under a no-fault, no-questions-asked system. The results of both measures were dramatic, with theft being virtually stopped in its tracks. This approach reminded me of a similar measure I witnessed a number of years ago when working at a manufacturing plant that assembled popular household goods and toys for large corporate clients. To mitigate employee theft, the employer sponsored a “company store” where employees could purchase the goods they produced at wholesale prices. This served the dual purpose of being a great new low-cost benefit and reducing theft significantly.
While we haven’t witnessed too much in the way of for-the-thrill-of-it theft, revenge against perceived unfairness is certainly something we’re familiar with – it surfaces as a motive for many work behavioral problems that our counselors deal with daily. And beyond specific grudges against specific employers, there is a more generalized sense of anger and outrage brewing, stoked by the daily barrage of headlines about corporate malfeasance and greed at the highest “leadership” levels of large corporations. It’s pretty difficult to imbue high ethical standards when the people at the top are widely disrespected or engage in criminal behavior themselves.
Whether it be employee theft, runaway workers’ comp costs or some other costly work problem, all too often we find that the problem is a symptom of a toxic work environment where mutual respect and trust have broken down. Prudent employers can and should enact preventive measures, but as we’ve previously stated, that may not be enough.

Our experience shows time and again that employers who communicate often and well with their employees and who work diligently to maintain a healthy work culture experience fewer workplace behavioral problems than their mistrusting, suspicious counterparts. Keep things in perspective. Dishonest employees are in the minority so don’t cast a pall of suspicion over everyone. Set the policy and the expectation, ensure that risk control measures are in place, and be fair and consistent in the way policies are enforced.


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