An Astounding Intervention That Stopped Employee Theft

There is big body of research on theft by employees, as it costs employers billions of dollars, is something that is possible to measure with some accuracy, and -- as a diverse body of qualitative and quantitative research shows -- often happens for complex reasons.  In some cases, studies have shown that both supervisors and employees will reach quite explicit agreements that stealing is a useful way to make-up for low wages.  In other cases, supervisors will makes subtle deals with employees that, if they work overtime or do something else extra, they can steal something (or steal more). And, in research on dock workers in the UK, the amount and type of things that people could steal was carefully regulated by the peer culture. If you stole nothing, you were seen as dangerous because you were potential rat; but if you stole too much, you were also seen as dangerous because your actions put everyone else at risk, and such employees were ridiculed, shunned, and forced out by peers.

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. The incentive to get something valuable is part of the story with theft, but his research suggests that giving people bad explanations and treating them without dignity is what really pisses people-off and drives them to exact revenge --to steal to get even.

I have been reading this research for years and always been fascinated by it, but I had missed a 2001 study that just floored me when I saw it for the first time last week.  It was done by renowned researcher Gary Latham in a large sawmill (about 1000 hourly workers and 200 managers). He was called in to help management because employees were stealing about 1 million dollars in equipment years from the mill.  There was a very strong union and imposing discipline was proving to be impossible. One story Latham tells is about a worker who was stopped by a supervisor because his tool boxes looked very heavy -- in response, the union flooded the HR department with so many grievances that they so begged the supervisor to back off; so supervisors adopted a "hear no evil, so no evil" approach to employee stealing as they were helpless to stop it anyway.  As Latham did his interviews (under conditions were he promised anonymity), he realized that employees didn't need most of the stuff the stole (like a 2000 pound piece of machinery called a "head ring").  They were doing to for thrill of it, because it was challenging and they wanted to brag to their buddies about it.  Indeed, when management started talking about putting in surveillance cameras to catch the thieves, instead of being upset, workers got excited because because the equipment would be so challenging to steal!

Working with management, Latham came up with a system to "kill the thrill."  First, they installed a library system where employees could "check-out" the same kind of equipment for personal use anytime.  The effect was immediate, because it was no fun to steal anymore and bragging  about stealing something that was free did not earn you prestige in the peer culture, so theft drop to virtually zero immediately. It continued that way from then on (at east for three years until Latham published the article).

Second, in a perhaps even more astounding turn, management had an amnesty day -- also following the library analogy -- where employees were invited to return missing equipment without fear of punishment. Management said they assumed that anything being returned was as a favor to a friend and the employee had not stolen it.  On that day, employees showed-up with one truckload after another of stolen stuff; and in  fact, management had to extend the amnesty period, as truckload after truckload came in for days and days. Apparently, the root cause for returning stuff wasn't the thrill; it was that workers (mostly men) were in trouble with their wives because the stolen stuff was taking up so much room in garages, storage sheds, and so on! And so they prevailed on their husbands to get rid of the stuff while they had a place to bring it.

Certainly, the thrill is not the main motive in many cases of theft, but I think Latham was brilliant in identifying the root cause in this case and coming-up (in concert with management) with a way to stop its motivating effect. Sure, from an ethical point of view, stealing is wrong (and a big subset of workers Latham interviewed did not steal for that reason), but this is a situation where management couldn't punish effectively -- but they did have some power of rules and practices, and used it very creatively.  I also wonder, looking at this more broadly, how much human behavior explained by the search for excitement among people who having boring jobs -- and boring lives too.

Here are two key citations:

Greenberg, J. (1997). The STEAL motive: Managing the social determinants of employee theft. In R. Giacalone, & J. Greenberg (Eds.). Antisocial behavior in organizations (pp. 85-108). Thousand Oaks, CA: Sage.

Latham, G.P. The importance of understanding and changing employee outcome expectancies for gaining commitment to an organizational goal," Personnel Psychology, 54, 2001, pp. 707-716.

Comments

[Wally Bock]

Thanks for that particular case study, Bob. It will be a good thought starter for situations where it looks like those "cooperative social norms" are taking things in the wrong direction.

[Garrick Infanger]

Great post.
Not only did Latham help devise a method for defusing the theft by means of a library--they went a step further with the amnesty and recovered piles of stolen items.
I think the union element puts an interesting twist on the story, but sad that the management-union dynamic can spill into criminal behavior.

[metacool]

Awesome post, Bob. Thanks for that one -- am going to remember this lesson (hopefully I'll never have to use it).

[Greg]

Stealing (or goofing off) is often more interesting than our jobs.

This reminds me of the story from the early days of HP, when either Hewlett or Packard (I do not remember which) took a pair of bolt cutters and cut the lock on the supply closest, not only so people could get what they needed to work, but also if they needed parts for a side project.

[Bret Simmons]

This is to me a great example of your point the crappy systems trump crappy people.

When I was young I worked about 10 years in the fast food industry. I know how much food and paper costs impact profits - and small things add up to big costs. To this day, if I go into a fast food restaurant and get bad food or bad service, I always reciprocate by grabbing a BIG handful of napkins or ketchup packets and throwing them away before I leave. If you cheat someone on a good faith transaction, you earn their response. To me this is an issue of equity.

My students love it when I tell them this story :)

[Dex]

Gah!!!

I doubt that any of this can be taken seriously. Anytime you hear this tripe, it's always one way. For instance, does anyone count the time employers steal above the 40 hours they pay for under the guise of "management? Nope, didn't think so.

Seriously, start being a little more skeptical on these types of things. American management as a whole is a bunch of ditzes that couldn't manage their way out of a bag of marshmallows. EPIC FAIL!
The layer that's the most useless is management.

Why not do something on "Open Book Management"? Or how about worker-run businesses. Bring "management" into the 21st century.

[Michael F. Martin]

I meant decreased the uncertainty of course.

[Michael F. Martin]

Fits very nicely with a version of Robert Ellickson's hypothesis about the formation of cooperative cultural norms: The establishment of a legitimate system for borrowing tools increased the parity of power between, the frequency of contacts with, and the uncertainty about how management will react to the borrowing of tools. Amnesty day simply supercharged the process of transformation.