Companies called lax in curbing theft by employees

By , Business correspondent of The Christian Science Monitor

Companies don't do enough to stop employee theft. Management often reads that employees are taking billions of dollars of goods and services from companies. But according to a newly released study, companies don't do much about it. The best solution to this problem is for a company to articulate clearly a strong corporate policy against it - to let workers know that helping themselves to merchandise, supplies, or cash is stealing - and to make sure they know the policy will be enforced.

Controlling theft is much like any other management problem. ''How management operates and relates to employees is the major determiner of theft and counterproductive behavior,'' says John P. Clark, a sociology professor at the University of Minnesota.

Making employees feel appreciated and secure in their jobs isn't all there is to it, though. ''You can give people a nice warm feeling about the company, but if you don't make it clear that taking from the company is stealing, you've still got a problem.''

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Professor Clark, along with Richard C. Hollinger, assistant professor of sociology at the University of Florida, has just completed a quarter-million-dollar study on employee theft for the United States Justice Department. The professors and their researchers looked at three cities, Minneapolis-St. Paul, Cleveland, and Dallas-Fort Worth, and three types of enterprises: retail stores, electronics manufacturing (in the Twin Cities only), and hospitals.

Their biggest surprise, they say, was how little companies do to prevent theft. Why don't they do more? ''It's not their main business,'' Professor Clark says. ''Companies say, 'We hire people to do the work. We're not their social workers. We take them as they are.' ''

Professor Clark says companies see themselves in business to manufacture a particular product or provide a certain service. They regard taking steps to prevent employee theft as a distraction.

Companies maintain this attitude at their peril. The Minnesota study found that one-third of all employees surveyed reported having committed some sort of theft against their employer - a figure Clark regards as low because it comes from the employees themselves.

''The notion of good management of your assets ought to extend throughout the organization, and not be just the province of the security staff,'' he says. Conversely, good security teams tend to be an integral part of good management teams.

Technically sophisticated security measures aren't necessarily what's needed. ''We found that quality of security measures did not relate to rate of theft, except in the retail area,'' Clark says.

The Minnesota study found that certainty of sanctions was a greater deterrent than severity of sanctions. In fact, the greatest deterrent was the employees' perception that if they stole they would be caught - and punished.

Professor Clark adds, ''Detection (of theft) by co-workers is more important than detection by management. If management standards against theft don't penetrate to co-workers, people are still likely to be thieves.''

''Gray areas'' of policy and capricious enforcement often turn out to be the black holes into which inventory slips. ''Sometimes things will change when there's a new supervisor coming on. Or there's a new production quota, or suddenly three people decide to take a mental-health day all on the same day. Then you've got trouble.''

Times of corporate upheaval are times when it's hard to keep employees honest , Professor Clark notes. One of the firms he surveyed merged with a larger company during the course of the study. ''Theft went up greatly.''

There is a general perception that standards ''aren't what they used to be,'' that young people demonstrate a greater moral laxity than their parents and grandparents did. And studies on employee theft do tend to find that young, unmarried employees with their employer only a short time cause a disproportionate amount of theft.

But Professor Clark sees this less as an indication of eroding standards over time than of the fact that in every era, young employees with less responsibility and less stake in their firm tend to have fewer qualms about stealing from it.

This doesn't mean that a company has to put up with theft, though. Those with lots of young, ''uncommitted'' employees can take positive steps to include them in the ''corporate family'' through extra supervision, fellowship programs, and the like, Professor Clark says.

But if he doesn't buy the idea that morals have deteriorated over time, he does suggest that people nowadays are ''probably more capable of compartmentalizing their behavior. There are different ways to behave at home, at work, with the kids.'' This is to say that the morality of the home doesn't necessarily make the commute into the workplace.

''If you pass through the gates of the workplace without standards of your own, you're at the level of the work group, 'Everything goes till I find out differently,' '' says Clark.

Giving supervisors explicit authority to bend the rules a bit can be an important management tool, Clark suggests. ''The supervisor can say to an employee, 'Look, you've been working so hard, why don't you take a long lunch?' Or he can say, 'They're really coming down hard on us to get this order shipped - can you take a short lunch hour?' It's called 'brokering deviance' to the company, and it's not necessarily a negative thing.''

Lewis Shealy, vice-president for asset protection at Woodward & Lothrop, the Washington department store chain, endorses the ''firm but fair'' message of the Clark-Hollinger study.

''We have a good employee orientation program,'' he says. ''We show them films during training of how people get caught (stealing).''

As a condition of employment, Woodie's employees are asked to sign an agreement by which they consent to searches of such personal property as lockers , handbags, and other items.

''We also have positive incentives,'' Mr. Shealy adds, by which he means a reward system whereby employees get $500 plus half the loot if they inform on fellow workers who have stolen. ''We double the award at Christmas.''

Asked whether encouraging employees to inform on one another doesn't undermine morale, Mr. Shealy says that on the contrary, taking steps to control theft builds morale. ''They work better, they sell better, if they know we're doing something about it. . . . Workers don't have respect for a thief.''

What's especially demoralizing is to have employees blow the whistle on dishonest co-workers - and then see no action taken. That's why the policy at Woodie's is to ''prosecute everyone we can,'' Mr. Shealy says.

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