Employee Theft



In America, businesses incur losses of between $10-120 billionannually as a result of employee theft(Rana &amp Punia, 2014). Following this report, thispaper will examine the different aspects of the problem such as itcauses, the different strategies employed by businesses to avert it,and the effectiveness of these methods. Additionally, the paper willanalyze the different symptoms that should inform managers andsupervisors that a certain employee may be involved in stealing.Besides, some of the emerging ways of curbing the malady of internaltheft will be explored as well.

Approximately 75% of all workers steal from their place of work atleast once, and about half of them do it more often(Rana &amp Punia, 2014). Employee theft entails theact of a permanent or contract worker exploiting his/her legitimateaccess to a company’s property for unauthorized purposes. Thebehavior has severe implications on businesses to the point that manyof them have been forced to close their operations following massivelosses. According toRana &amp Punia (2014), businesses in America incurlosses of between $10 and 120 billion annually from employee theft.Following the rampant nature of the act of employeesstealing from their workplace, employers are adopting specificmethods aimed at averting the problem. Some of these methods includepre-employment assessments and the adoption of technology such as theclosed circuit television. This paper will assess the differentaspects of the problem of employee theft

Causes of employee theft

There is a wide array of factors that contributes to employee theft.According to Giacalone &amp Rosenfeld(2013),&nbspa combination of personal, motivational, andsituational factors are responsible for the problem. Studiesconducted on prison inmates sentenced for stealing from theiremployers have revealed that the majority of individuals whopilferage from their place of work do not perceive themselves as realcriminals. Instead, they tend to rationalize and justify theiractions. Giacalone &amp Rosenfeld (2013),assert that a huge difference exists between a retail outlet ownerand his/her employees’ idea of what constitutes internal theft.While owners perceive theft by workers as any behavior that resultsin a firm losing financially, the majority of employees view stealingfrom their employer, regardless of the amount involved, as akin toenjoying the benefits of employment.

Sometimes, employees steal from their place of work as a way ofreacting against the injustices they feel were perpetrated towardthem by those their work for. According toFurnham &amp Taylor (2011), workplace theories thatexplain the cause of internal theft cite factors such as theperceived organizational fairness as playing a monumental role incultivating pilferage behaviors among employees. For example, poorlyremunerated workers tend to regard stealing from their workstation asa way of getting what they think their employer owes them. Somemanagement action, such as unreasonable pay cut and fines provide theimpetus workers need to pilferage goods and cash from theirworkstation as a way of getting even with their employer. Besides,employee theft may be as a result of a perceived lack of compassionor disrespect on the part of the business owner or the managers.According to Giacalone &amp Rosenfeld (2013),dissatisfaction is perhaps the most important cause ofinternal theft. A sense of dissatisfaction, particularly whencombined with the perception of inequality gives workers a reason torationalize their actions of stealing from their employer. Besides,some part-time workers lack a strong connection with their work dueto the temporal nature of their position and this causes a sense ofjob insecurity. Consequently, part-time employees may steal fromtheir place of work as a way of leveraging the harassment and jobinsecurity that characterizes their work.

While some employees view stealing as a way of getting even withtheir employer, research shows that the management attitudes towardinternal theft also play a significant role in encouraging thebehavior. The existence of a moral atmosphere that turns a blind eyeon internal theft or that endorses dishonesty is one of the factorsthat account for the pervasive nature of stealing by workers in mostorganizations(Furnham, A., &amp Taylor, 2011). Some supervisorstend to cover-up incidents of theft perpetrated by some of theemployees in their departments to avoid being reprimanded by theirbosses. Additionally, some of them corroborate with unscrupulousemployees to steal from the company.

The other reason for the prevalent nature of internal theft is thetendency by the employees to view stealing from their place of workas a norm. According to Giacalone &ampRosenfeld (2013), one of the reasons frequently cited ascontributing to employee theft is the thinking that everybody elsedoes it. Besides, some employees tend to view the managers ashypocrites when they formulate and implement strategies for taminginternal theft

Ways in which employees steal from their employers

According to The City of Beverly Police Department (2016), the commonmethod employees use to steal from their place of work is by hidingsome goods or merchandise in their pockets, briefcase, handbag, lunchtins or any other personal items that are less likely to be inspectedwhen the person is leaving the business premises. Also, someemployees tend to remove some items from their place of work bydisguising them as trash only to recover them later. Cashiers mayovercharge a customer only to pocket the extra money later. Forbusiness entities that offer goods or services that the clients areexpected to pay for at a later date, an employee may take theconsumer`s payment and fail to credit the same amount to his/heraccount. Besides, the nature of some jobs requires that workers usecertain equipment and materials to solve the client`s problem. Inthis case, some employees may request for more money compared to whatthe materials needed to serve the customer cost only to pocket theextra cash. More often than not, employees do not return any unusedequipment upon leaving the client`s place.

Symptoms of employees who are involved in internal theft

The City of Beverly Police Department (2016) advises business ownersand supervisors to check the following behaviors when exhibited bytheir workers. Firstly, employees with a habit of stealing goodsworth huge amounts of money are likely to change their spendinghabits drastically. For example, a supervisor may notice that one ofthe employees has more than one car while his/her salary does notaccommodate such level of expenditure. Secondly, an employee involvedin stealing from the business premises may change his/her standard ofliving unexpectedly. For example, a worker moving from poor to richneighborhoods without a significant change in his/her salary shouldraise a red alarm. Thirdly, certain behaviors by employees in thecourse of their job should raise a red alarm that something fishy isgoing on. For example, when an employee exhibit a sudden and unusualdevotion to his/her job shows that he/she may be hiding something.Also, some workers may be resistant to shifts as some workstations donot contain anything of value that a person can steal. According tothe City of Beverly Police Department (2016), some workers may failto take earned vacation, and this may mean that the amount they getthrough internal theft exceeds whatever their employer is offeringthem during their leave. Lastly, an employee may refuse to bepromoted or transferred especially if the new position is less likelyto accommodate their behaviors.

Prevention strategies for employee theft

The widespread nature of internal theft has resulted in organizationsadopting certain precautions to avert the problem. Most of thesemethods are proactive in nature which means that they seek to preventthe problem instead of responding upon its occurrences. Some of thedeterrence methods employed by organizations to curb the problem ofemployee theft include the use of technology such as the closedcircuit television and pre-employment assessment.

Pre-employment background check

Pre-employment screening aims at verifying the credentials of a jobapplicant as well as to check whether he /she has met preconditionsfor employment. By conducting the pre-employment background check,the potential employer gets to know whether an applicant hasmisrepresented him/herself by producing false information. Theprocess of doing a background check on potential employees variesfrom one organization to the other depending on the nature of the joband the possible loss resulting from workers misconduct. For example,most governmental and financial organizations take pre-employmentscreening seriously.Following the huge lose businesses across theworld are incurring as a result of employee theft, many of them areundertaking to investigate potential candidates before hiring them.According to Cavico,et al., (2014), 94.3% of retail outlets in Americaconduct workers’ screening during the hiring process. Some of theareas of interest when conducting a pre-employment screening for newemployees include education, work history, medical history, financialhistory and the use of social media. Most importantly, criminalrecords have become mandatory for many organizations across the worldduring the hiring of new employees.

There are many organizations an employer may use to get records ofthe potential employees, and this includes their former place of workand the national criminal database. Cavico,et al., (2014) report the Federal Bureau ofInvestigation conducts approximately nine million background checksevery year mainly for employment purposes. While it is not illegalfor an employer to carry out a background check on a potentialemployer, certain rules must be followed during the process. Forexample, an employer is prohibited from using the information her/sheacquires during the pre-employment screening exercise to discriminateagainst one applicant based on his/her color, religion, andnationality. Additionally, an employer must receive the applicantwritten consent authorizing him/her to go ahead with the backgroundcheck. Besides, an employer is required to produce the consentdocument upon arrival at the organization he/she is seeking to getthe information regarding a potential employee from. While the manyorganizations are adopting pre-employment screening as a method ofcurbing internal theft, research shows that the majority ofindividuals who steal from their place of work are first-timeoffenders(Cavico, et al., 2014). This means that a business entity shouldcombine at least two methods of theft prevention, such aspre-employment screening and closed circuit television, for it toexperience a decline in the incidences of items and money beingstolen by its employees.


Some employers rely on integrity tests to assess the likelihood of anapplicant to engage in any form of workers misbehavior. However, thismethod has been criticized as less effective in revealing anapplicant’s behavior that may predispose him/her to pilferagebehavior. According to Furnham&amp Taylor (2011), it is unreasonable and ironicalfor one to expect dishonest individuals to answer questions honestlyabout their attitudes toward theft. Besides, potential employeeswould go to whatever extent possible to cover most of the recordsthat can hinder them from getting jobs. One way of doing this is bycolluding with some unscrupulous managers to act as their referees.Additionally, there is a likelihood that applicants would notdisclose self-incriminating evidence when taking the integrity test.For example, it is common sense that most applicants would omit toinclude their former employers who they deem would have detrimentaleffects on their chances of getting hired.

Closed circuit television

CCTVs serve both proactive and reactive goals when taming internaltheft. As a proactive strategy, the installation of these deviceswarns potential thieves that they are being watched which means thatthe likelihood of their actions being detected is high. As such, thepresence of CCTVs serves as a psychological deterrence. As a reactivestrategy, a closed circuit television may help an organization in theimplementation of its policies towards the elimination of internaltheft. For example, if the cameras capture an employee takinganything that is not part of his/her personal items out of thebusiness premises necessary actions can be taken against him/her.Besides, the infringement of an organization’s policy regardingareas where personal items such as backpacks are not allowed can beimplemented better with the installation of closed circuittelevisions. Additionally, if these cameras capture a person takingpart in one of the behaviors that fall under the broad spectrum ofemployee theft, the record may serve as evidence in a court of law.Also, the records provided by CCTVs can protect an employer againstthe charges of the unlawful firing of an employee in case the latteris recorded stealing from the business premises by the cameras(Haldas, 2015).

To increase their effectiveness, CCTVs should be installed instrategic places where the likelihood of employee theft occurring ishigh. For example, the device should be installed facing the cashregisters, entrances and exits, and around dumpsters. However, oneshould ensure that the cameras have a clear view. For instance, itwould be futile to install a CCTV in areas with poor lighting or nearlarge objects such as shelves that are likely to blur the camera’sview (Haldas, 2015). Besides, many cases of internal fraud involvethe synergy between several individuals working in differentdepartments to ensure that all evidence is destroyed. As a result,organizations where the cases of employee theft are high are advisedto hire the services of a contracted security staff to manage theCCTVs. This aims at reducing the act of employees colluding with eachother to steal from their place of work.

While closed circuit televisions have proved very valuable in curbinginternal theft, their use raises some ethical and privacy issues.With the proliferation of CCTVs in many business premises, the socialand the mainstream media have been awash with stories of how thesedevices are used maliciously. For example, there have been cases ofsome school administrators installing hidden cameras in high schoolwashrooms with the aim of selling the recorded videos to pornographicsites. As such, Haldas (2015) argues that CCTVs should be installedin open places and all individuals being monitored must be informedof their existence. The Fourth Amendment forbids the installation ofrecording devices in areas where people expect a certain level ofprivacy. Such areas include employees` changing rooms and washrooms.The installation of cameras in such areas amounts to the infringementof the workers’ right to privacy guaranteed in the Constitution. Besides, while the primary reason for the installation of closedcircuit televisions is to tame employee’s misbehavior, anorganization should also consider the rights of customers wheninstalling these cameras.

The effectiveness of closed circuit cameras in curbing internal theftcannot be questioned. Harikrishnan, et al., (2014) did a follow-upinvestigation aimed at assessing the effectiveness of the CCTVs intaming employee theft in business premises. In their study, theresearchers found that upon the installation of closed circuittelevision, employee theft decreased substantially, although thereduction varied depending on the type of organization. For example,the percentage decrease in employee theft registered in a jewelryshop was 60%, textile outlet (72%), production center (9%), chainstore (41%), and (6%) for malls and supermarkets (Harikrishnan, etal., 2014).

Other strategies for preventing employee theft

Research has shown that the majority of the modern methods employedto curb internal theft do not eradicate the problem. Consequently,the City of Beverly Police Department (2016) proposes the followingpreventive steps to address some loopholes that encourage acts ofpilferage by employees. For example, every business should have apurchasing policy that explicitly specifies how all goods are to beprocessed. This targets at addressing the habit of some employeesprocessing their purchases. Secondly, businesses should provideemployees with lockers that they can use to store their personalitems. This move should be followed by a strict policy that forbidsemployees from taking personal items beyond a certain pointespecially near the merchandise or cash registers. This aims atreducing the amount of goods stolen through lunch boxes, backpacks,and purses. Thirdly, employees should only leave the businesspremises through a single exit where the organization can install itsclosed circuit television and have guards monitor all workers as theydisperse from work. The fourth approach that a business entity mayadopt to curb internal theft is to maintain a refund book where allmerchandise returned by customers are booked. For example, a companymay develop a policy requiring that returned goods be checked by anemployee other than the one who made the sales. This aims at tamingthe employees’ behavior of pocketing the goods returned.

The fifth strategy for ameliorating the problem of employee theftrequires that an organization develop a policy concerning trashremoval. For instance, the policy should take into consideration thespecific time trash should be removed from the business premises.Besides, it is advisable that businesses utilize transparent trashbags to reduce the likelihood of workers hiding some merchandiseinside the trash cans. The other approach to preventing theft byemployees requires that supervisors conduct random checks ofemployees who exhibit suspicious behaviors. Such behaviors includearriving early at the workplace or staying late for no apparentreason. Additionally, every organization should ensure that the cashbook is edited at the end of every work day. The auditing involveschecking the cashbook entries against the money the cashier has onhand (The City of Beverly Police Department, 2016). This aims atreducing the likelihood that the cashier or any other person handlingthe business cash will overcharge a customer with the aim ofpocketing the extra money later.

The act of employee stealing from their place of workers has beenplaguing business for decades. Statistics show that organizationslose billions as a result of internal theft every year. Causes ofemployee theft are diverse and ranges from personal, situational,motivational to economic ones. The pervasive nature of the problem isas a result of the rationalization and justifications that areinvoked by the perpetrators of internal theft. The majority ofemployees perceive stealing from their workplace as a norm to thepoint that efforts to curb the problem are viewed as a form ofhypocrisy on the part of the management. The most common ways used topilferage include workers hiding some items, equipment, andmerchandise in their backpacks or any other container they usuallycarry to their workstation. To curb the problem, many employees areadopting modern methods such as the pre-employment screening forpotential employers as well as the installation of CCTVs. The use ofCCTV has raised pertinent privacy and ethical issues such that abusiness owner needs to take precaution when installing thesecameras. For instance, it is mandatory that all employees working ina business premise that is under the CCTV surveillance be notifiedthat there are being watched. For pre-employment screening, anapplicant need to consent in writing that he/she has given permissionto his/her potential employer to conduct the search. Besides, expertsencourage supervisors and managers to be extra vigilant on workerswho exhibit suspicious behaviors such as staying late at their placeof work for no apparent reason. A sudden change in an employee statusis the most common sign that should hint at the possibility ofhim/her stealing from his/her place of work. In addition, theemployee’s refusal of promotion, leave, and transfer should betaken as an indication that he/she is hiding something. While theprevalent nature of employee theft has necessitated the use of modernmethods, the most effective way of curbing the problem is bysupervisors addressing the loopholes that encourage stealing.Additionally, the management should adopt strategies designed toaddress the issue of workers` dissatisfactions.


Cavico, F.J., Mujtaba, B. G., &amp Muffler, S. C. (2014). Criminal BackgroundChecks in Employment: An Unfolding Legal Quandary for Employers.Journalof Law and Criminal Justice,&nbsp2(1),41-103.

Furnham, A.,&amp Taylor, J. (2011).&nbspBadapples: Identify, prevent &amp manage negative behavior at work.Springer.

Giacalone, R. A., &amp Rosenfeld, P.(2013).&nbspImpression management inthe organization. Psychology Press.

Haldas, M. (2015). “Using surveillance systems to prevent theft.” Accessed on August 30, 2016.http://videos.cctvcamerapros.com/surveillance-systems/prevent-employee-theft.html

Harikrishnan, G., &amp Dhanuvachapuran., V. T., &amp Kerala, T.(2014). The role of CCTV in business organizations: A case study.International Journal of Commerce, Business, and Management, 3(3).

Rana, H., &ampPunia, B. K. (2014). Management Mechanisms and Implications ofWorkplace Deviance for Green Organizational Behavior.

The City of Beverly Police Department. (2016). “Internal TheftPrevention.” Accessed on August 30, 2016.http://www.beverlypd.org/pdf/PRIVATE%20BUSINESS%20SAFETY%20TOPICS/INTERNAL%20THEFT%20PREVENTION.pdf