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Why employees steal, and how to handle it

04/13/2016

employee stealing moneyIt can be as small as a handful of office supplies (a few Hi-Liter pens, a few pencils and a ream of paper) that an employee snatches for his or her middle-schooler. Or it can be a sophisticated, years-long embezzlement scheme involving forged invoices, multiple bank accounts and nonexistent customers.

Whether it’s either of those two extremes, or anything else between, your employees are likely stealing something from your company.

In fact, fraud prevention experts offer up the 10-10-80 rule. That is, 10% of employees never will steal; 10% do steal; and 80% will go either way depending on the circumstances.

What causes a basically honest employee to commit theft? Security experts give the following motives:

Real or perceived financial need. Sometimes an employee is “driven” to steal by what he or she sees as a financial crisis that can’t be solved any other way. That “crisis” can be a costly illness in the family, falling behind on the bills, or merely the inability to afford the clothing, gadgets or activities as one’s peers. But financial need is in the eye of the beholder, and some experts believe that employees manufacture crises in their own minds to cover the true motivation—greed. Often, the first time an employee steals, he rationalizes the act by calling it a loan. The problem is, once they see how easy it is to steal, most return to the trough again and again.

Revenge. Some security experts consider revenge the No. 1 cause of employee theft. Employees who believe they’ve been underpaid or overworked often steal to even the score. Other times, an employee cannot face the fact that his or her performance doesn’t merit a raise or promotion and will instead blame management. And sometimes, companies truly do overwork and underpay employees to the point where it poisons the work relationship. Employees who feel the company owes them will often do more than grouse—they’ll go after their fair share.

Temptation and opportunity. A depressing but popular theory holds that, given the opportunity, even basically honest people may steal. Honesty, unfortunately, tests itself as the situations offer greater temptations. The rate of theft among employees in jobs with unrestricted access to money or valuable property is higher than that of other workers. Theft rates are also higher when employees know the value of a product. For example, engineers may be more likely to steal computer parts than are the line workers who assemble them.

Workplace norms. Worker attitudes have a profound effect on the amount of theft that goes on in a company. These attitudes and norms are also called “informal controls.” In other words, workers themselves let co-workers know just how much theft is permissible through an informal system. For example, a long-time employee may walk out with a few office supplies, telling others that, “They won’t care or notice.” Conversely, an employee who sees a new co-worker pilfering items out of the breakroom may say, “We don’t do that here.” Informal rules of a workplace have much more effect on employee theft than formal rules laid down by management.

What to do if you suspect theft

Accusing, harassing or interrogating a suspected thief in your workplace is a flash point for a lawsuit. Many in the security field say that the best way to handle an investigation of a larger-scale theft is for your organization to turn it over to an outside expert, who knows how to handle an employee without getting sued. Other authorities say if you handle the investigation internally, a human resources manager should be in charge.

If you’re dealing with the pilfering of office supplies or breakroom items, you might better address the issue with a companywide meeting.

Consider this hypothetical scenario: A cashier that you manage has been short in his register drawer on several consecutive shifts. So you think you’re on to his game. When he arrives for his next shift, you take him by the arm, steer him into your office lock the door and tell him that the two of you aren’t leaving until you get some answers. So he offers up a signed confession.

The problem is that not only is the confession likely inadmissible in court, but the cashier could sue you for false imprisonment, assault and battery and infliction of emotional distress. The cost in legal fees alone would undoubtedly be more than the employee stole.

If you are part of the investigation, follow these guidelines when interviewing suspects or witnesses:

•    Never interview an employee for an unreasonable amount of time.

•    Never give an employee the impression that he or she is not free to leave.

•    Never touch an employee or give any appearance that force might be used.

•    Conduct interviews in private—under relaxed, nonthreatening circumstances.

•    Don’t play police officer a hard-nosed detective.

•    Interview only the employees who have reason to know about the alleged theft. Widespread interviews could cause the employee in question to sue for defamation if vindicated.

•    Focus on facts and data, not rumors and innuendo.