STAFF DISHONESTY – AN IMPORTANT WORKPLACE CRIME
EXPLANATION IN THE LIGHT OF CRIMINOLOGICAL THEORIES
The crime in the workplace has been a subject of increasing
interest for the criminologists and researchers in recent
years. Numerous studies and surveys have been carried out,
as it was realized that managing and preventing workplace
crime is of vital importance for any organisation. According
to Challenger (1995: 2) ‘Workplace crime is generally seen
as comprising offences that cause an identifiable loss to an
employer’. Ismaili (2001, as cited in Friedrichs, 2002: 251)
defines ‘workplace crime’ as ‘any harmful act committed by a
person or group of persons during the course of a legitimate
occupation’. Sennewald (2003) identified, ‘one of the major
remits of the security manager as being the limiting of
losses to his or her organisation’. Managing and preventing
crime in the workplace has become the main goal for any
security manager, as it is instrumental in creating a safe
and secure working environment for employees as well as
preventing financial losses to an organisation.
This essay will discuss workplace crime of ‘Staff
Dishonesty’, as one of the important workplace offences. It
will outline the extent of the problem and the causes which
possibly lead to staff dishonesty. An attempt would be made
to explain this crime in the light of ‘deterministic’ as
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well as ‘neo-Classical perspective’ in criminology. After
discussing explanations offered by various criminological
theories, the prevention strategies would be highlighted.
This would include situational techniques including
opportunity reduction as well as social crime prevention
measures. A final conclusion would be drawn as to how
helpful the various criminological theories could be for a
security manager to manage this offence. In order to
maintain focus of this assignment, the role of a security
manager in a large departmental store or supermarket would
be considered as an example.
‘Staff Dishonesty’ or ‘Employee Theft’ is widely regarded as
a form of occupational crime. According to Hollinger and
Davis (2006), staff dishonesty takes place during the course
of a legitimate occupation, involves a violation of trust
and is committed primarily for the benefit of the individual
either financially or in terms of social status. A widely
accepted definition of ‘employee theft’ or ‘staff
dishonesty’ is ‘the unauthorized taking, control, or
transfer of money and/or property of the formal work
organisation perpetrated by an employee during the course of
occupational activity which is related to his or her
employment’ (Hollinger and Clark, 1983 as cited in Hollinger
and Davis, 2006: 204-205). It was recognized by Hollinger
and Clark that employee theft has two major forms, namely
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‘property deviance’ including financial embezzlement,
pilferage and theft of goods or sabotage and ‘production
deviance’ including time theft. The Association of Certified
Fraud Examiners offers a broader definition of the term
‘occupational fraud’ as, ‘the use of one’s occupation for
personal enrichment through the deliberate misuse or
misapplication of the employing organisation’s resources or
assets’ (ACFE, 2008: 6). In the service industry, staff
dishonesty is often called ‘fiddling’, which can be defined
as ‘a theft by a service agent from a customer which is
practiced in such a way as to make it interactionally and
inventorily invisible’ (Ditton, 1977: 19).
The scale and extent of staff dishonesty can only be
calculated by knowing the rate of incidence (number of times
a theft has occurred) and prevalence (number or proportion
of staff involved). However, an exact answer to these
questions has remained a challenging task for the
researchers because of lack of data, as most of the
incidents of staff dishonesty are dealt with internally by
most companies and rarely end up in official criminal
statistics (Beck, 2006a). The researchers have no option but
to rely on case studies, self-report surveys and other
indirect measures used by various organisations (Hollinger
and Davis, 2006).
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According to annual studies undertaken by University of
Florida, since 1991, internal theft is responsible for 40-47
percent of all losses in the US (Hollinger and Langton, 2004
as cited in Beck, 2006a: 6). Similarly, ECR Europe shrinkage
survey of 2004 suggested that staff theft accounted for 28
percent of the losses of retailers (Beck, 2006a). The BRC’s
Retail Crime Survey of 2009 estimated staff theft and fraud
to account for 7 percent of the £1.1 billion losses in crime
against UK retailers (BRC, 2009). According to Hollinger and
Clark (1983, as cited in Beck and Peacock, 2009: 68),
employee theft accounts for between 10-15 percent of the
cost of consumer goods in the US and it plays a major part
in the bankruptcies of between 30-50 percent of all
companies going into insolvency (Greenberg, 1997 as cited in
Hollinger and Davis, 2006: 204). The ACFE in its 2008 report
estimated that U.S. organisations lost 7% of their annual
revenues (equivalent to $994 billion) to fraud (ACFE, 2008).
This does not take into account the amount lost by
production deviance or ‘time theft’.
The various forms of staff dishonesty were classified
according to the workplace characteristics by Gerald Mars in
1982, in a classification named Grid/Group Analysis or
Dynamic Cultural Theory (Mars, 2006). The grid dimension
assesses the relative strength of constraints operating in a
job and is composed of the elements of autonomy, insulation,
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reciprocity and competition (Department of Criminology,
2009b: 5-8). The group dimension measures the collectivity
among staff and also consists of four elements, namely
frequency or level of interaction with others on similar
tasks, mutuality, scope or range of shared activities
including socializing and a defined boundary or an awareness
of a collective identity (Department of Criminology, 2009b:
5-9).
According to the combinations of these ‘grid’ and ‘group’
dimensions, four occupational archetypes were proposed by
Mars (2006), namely Wolf-packs (strong grid/strong group),
Hawks (weak grid/weak group), Vultures (weak grid/strong
group) and Donkeys (strong grid/weak group). The Wolf-packs
are strongly knit, well organized groups who have assertive
self-identity, hierarchy and rules and operate collectively.
The Hawks are free of group membership and group controls
and their members decide their individual course of action.
The Vultures are those occupations having strong sense of
boundary but in which the members are quite autonomous with
less constraints and pursuing their own benefits. The
Donkeys are those occupations which are strongly constrained
by external rules and categories and lack the support from
other members of their group. So, the members lack autonomy,
work in isolation and are prone to retaliation and sabotage.
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The security manager in a retail setting has to understand
all these ideal occupation archetypes in order to understand
which one is more prevalent in his/her store. For example,
the workers at the till or the check out employees are
classic example of the ‘donkey jobs’. Therefore, the
security manager has to be careful in this regard and expect
common fiddles from them like under-ringing the till,
voiding last item, not charging all items for family or
friends, illegal usage of employee or loyalty cards, etc.
Similarly, the other employees working in different areas of
the store can belong to any of the archetypes described
depending on the existing work culture prevalent.
After analyzing the various forms of staff dishonesty, an
attempt would be made to understand why some staff indulges
in dishonest practices in the workplace, while others do
not. This is a complex issue and it should be understood
that there is no single factor or theory that can explain
each and every offence and instead the deviance may depend
on a variety of factors and circumstances.
The oldest explanation of why staff indulges in dishonest
practices can be found in the deterministic approach
suggested by biological and psychological positivists like
Cesare Lombroso. Some of the later researchers and security
professionals tended to view that offending is ‘determined’
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by pathological and deviant impulses or pathological
disturbances of mind or of the social fabric that produce
deviant personalities (Tucker, 1989, Smigel and Ross, 1970
as cited in Department of Criminology, 2009b). This point of
view does not have much to offer for explaining staff
dishonesty except highlighting the fact that offending staff
are in some ways different from their non-offending or
honest colleagues.
The second explanation of staff dishonesty can be found in
the Neo-Classical perspective. The rational choice theory
can be used both to explain the required conditions for the
occurrence of specific offences like employee theft as well
as to explain why employees become involved in such crimes.
According to this theory, the decision making stages are all
influenced by complex situational variables, which can be
psychological, sociological and depending on incentives and
opportunities. ‘The assumption is that the offender is
acting rationally and within this approach, offenders are
seen as decision-makers, they choose to become involved in
crime after weighing the costs and benefits of this course
of action’ (Cornish and Clarke, 2006: 19, as cited in
Department of Criminology, 2009a: 3-7). The question now
arises as to what are the conditions, which provide the
motivation for staff to become dishonest? Durkheim’s
sociological concept of ‘anomie’ associated with
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‘restlessness’, ‘dissatisfaction’, ‘agitation’ and other
states leading a person to suicide or deviance, provides one
of the answers (Reiner, 2007 as cited in Department of
Criminology, 2009b: 2-20).
Some studies have suggested that employees that are under
external financial pressures, like high levels of personal
debts and loans, may be inclined to steal from their
employers to meet external financial pressures. Such
employees, who are disadvantaged and cannot meet their debts
through legitimate means, adopt alternative means which may
lead to dishonesty (Merton, 1938 as cited in Department of
Criminology, 2009a: 2-20, 21). Other studies dispute this
explanation and suggest that this factor only plays a minor
role in explaining staff dishonesty (Hollinger and Clark,
1986, as cited in Beck, 2006a). The overall rise in consumer
debt during the past decade with a corresponding rise in
internal staff theft and fraud figures has once again raised
this as a possible issue in explaining staff dishonesty
(Hollinger and Davis, 2006). According to the concept of
‘anomie’ and in view of the ongoing worldwide recession, the
incidence of employee theft and staff dishonesty should
increase as more and more people are suffering growing debts
with no means to pay off their mortgages and loans. However,
BRC Retail Crime Survey of 2009, estimated staff theft and
fraud accounted for 7% of the losses of crime against
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retailers in the UK, as compared to 8% during the previous
year (BRC, 2009). This was contrary to the last five years
trend, but this decline can be attributed to the mounting
job losses due to recession during 2008-09 (Kollewe and
Wearden, 2009). Therefore, losses due to staff theft and
dishonesty could reduce as the number of people having
employment decreased. With the recent reports of a fall in
the UK unemployment rate from 7.9% to 7.8% in January 2010
(BBC, 2010), we might see a return of the previous trend.
Cornish and Clarke (1986, as cited in Hollinger and Davis,
2006) suggested that an offender’s decision and choices for
committing theft and dishonesty are not motivated solely by
economic needs but are likely to be guided by external
factors such as time, ability and the availability of
relevant information to commit an offence. Cohen and
Felson’s (1979: 590) ‘Routine Activity Theory’ is able to
explain the factors that are considered by potential
offenders before they commit any crime. According to this
theory, ‘the probability that a violation will occur at any
specific time and place might be taken as a function of the
convergence of likely offenders and suitable targets in the
absence of capable guardians’. Thus, unlocked inventory
doors or cash safes, areas without CCTV or surveillance and
relatively easy access to valuable information can be the
conditions in the retail store setting, which can lead to
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exploitation by the motivated or rational staff for their
individual benefit (Hollinger and Davis, 2006).
According to Hollinger and Davis, one can find desirable
goods and merchandise of value as well as good amount of
cash almost everywhere in the retail environment. Thus the
level of opportunities is higher in the retail sector, and
studies have proved higher incidence of staff dishonesty and
theft. Reducing the opportunities by target hardening,
denial of benefits, increased surveillance, limiting staff
access to cash and goods are some of the measures, which can
be considered by the security manager to minimize losses.
For example, the pattern of thefts could be studied to
identify crime hot-spots within the retail store,
identifying offence locations, routes which offenders might
normally take to these locations, blind spots not covered by
CCTV or other surveillance and boundaries between two
departments of the same store. All these factors can help
formulate feasible crime prevention strategies using the
internal design of the particular store (Brantingham and
Brantingham, 1993, as cited in Beck and Willis, 1998). One
of the chief methods adopted by many retailers to tackle
shoplifting has been the use of Electronic Article
Surveillance (EAS) and this can be equally effective for
internal shop theft. However, one of the key problems of
using such system has been the high level of false alarms,
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which severely impacts its utility and usage (Beck, 2005).
However, all such measures can seriously jeopardize the
ability of store employees to do their jobs and impair the
sales figures. A balance has to be struck between preventive
measures and procedures limiting the opportunities of the
employees and the freedom granted to them in doing their job
for facilitating the customers. It must also be kept in mind
that internal thieves are often in an ideal position to
‘probe’ new and existing processes and procedures to find
loopholes that would enable them to increase their
opportunities and reduce their risks (Beck, 2006b: 468).
Therefore, the security manager in a retail setting has to
be dynamic and well informed to remain one step ahead of
such employees.
There is another group of theories explaining the relation
between employee dishonesty and job dissatisfaction. These
theories explain that staff that is unhappy with their
working environment or circumstances would be more likely to
offend (Mangione and Quinn, 1975, as cited in Beck, 2006a).
On the contrary, if the attitudes of staff towards the
employing organisation, management and supervisors are
positive, there would be a lower level of deviant behaviour.
Greenberg (1997, as cited in Hollinger and Davis 2006: 213)
explains in the ‘Steal Motive Theory’ that ‘employees will
engage in theft in order to ‘even the score’ and redress
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perceived inequity with their employers’. The security
manager will have to work actively with the management to
reduce the job grievances and improve the working
environment for staff, in order to reduce the levels of
staff dishonesty.
The role of an organisational culture has also been a factor
in explaining staff dishonesty in some of the theories. This
refers to a set of shared meanings or understandings that
influence organisational behaviour by shaping employees
knowledge and perceptions of reality. It has been noted by
many scholars that many informal peer subcultures of
dishonesty exist within a given workplace. Often these
informal subcultures become so strong that they take
precedence over the formal rules and established guidelines
(Ott, 1989, Parilla, Hollinger and Clark, 1988, as cited in
Hollinger and Davis, 2006). It is therefore important that a
security manager in a retail setting understands the various
informal subcultures present. The peer pressure can also be
used positively because in such a situation, the employees
become more influenced by the expectation of their workplace
peers than by formal rules and sanctions and this can have a
deterrent effect on theft and dishonesty. If the security
manager realizes that a general culture of dishonesty exists
at a particular store, he/she has to work with the
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management to make efforts and policies to discourage such
culture, as this would make his/her work easier.
Motivation, rationalization and opportunity are the
essential elements of any internal fraud or dishonest act
(Cressey, 1953, as cited in Kieffer and Sloan, 2009). After
the staff are motivated enough to commit the offence and
find the appropriate opportunity, they need to rationalize
or neutralize their feelings of guilt concerning their
dishonest behaviour or theft. Matza and Sykes (1957, as
cited in Hollinger and Davis, 2006) defined these
techniques, which allowed for the traditional ethical bonds
of the society to be temporarily broken or suspended and
called them ‘Techniques of Neutralization’. This is in line
with Hirschi’s control theory, saying that ‘delinquent acts
result when the individual’s bond to society is weak or
broken’ (Hirschi, 1969, as cited in Department of
Criminology, 2009a: 2-24). These neutralization techniques
include denial of responsibility, denial of injury, denial
of the victim, condemnation of the condemners, defence of
necessity and appeal to higher loyalties. Hollinger (1991,
as cited in Hollinger and Davis, 2006) found that these
neutralization techniques were highly correlated with staff
associated with dishonesty. Understanding neutralization
techniques used by such staff can help in uncovering and
understanding the individual and situational causes of crime
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at the workplace (Kieffer and Sloan, 2009), which can be
very helpful for the security manager.
The last theory explaining staff dishonesty is the model of
‘Non-Theft’. Mars (1984, as cited in Department of
Criminology, 2009b) examined the view that many individuals
do not see their dishonesty as theft in the first place. The
reasons can be that the dishonest acts can be seen to be
‘victimless’ or the stolen items can be claimed to be
‘valueless’ (Horning, 1970, as cited in Department of
Criminology, 2009b). However, these reasons can form part of
the techniques of neutralization, as described above.
The various forms of staff dishonesty and the explanations
offered by various criminological theories have mostly
related to property deviation. However, an important form of
staff dishonesty is production deviation, commonly called
‘time theft’. This can include unacceptable work practices
like late arrival, early departure, taking unnecessary sick
leave, having long lunch and coffee breaks, socializing with
other colleagues, excessive personal phone calls, using
internet and checking personal emails during working hours,
not completing assigned tasks on time for claiming overtime,
leaving early and coming late from leave and doing other
personal tasks. Time theft is a form of dishonesty because
the employees ‘steal’ the intangible asset of time, which
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their employer purchased from them by the payment of salary
(Department of Criminology, 2009b). This can be a big
problem especially for larger organisations and can become
an informal organisational culture causing huge losses as
most of the employees would start indulging in it. This also
reflects poor employee induction training and lack of
following proper rules and practices. There have been very
few studies on the subject, however it was estimated that
time theft in the US cost the employers roughly $175 billion
every year (Snyder, Broome, Kehoe, McIntrye & Blair, 1991,
as cited in Department of Criminology, 2009b: 5-17). The
security manager in a retail setting has to ensure that
proper policies and rules are in place regarding what is
expected of employees during the working hours and what is
not tolerable. The store might be running on shifts,
therefore proper standard operating procedures need to be in
place to ensure that the employees arrive on time, do proper
handover/takeover and don’t waste their time by having
longer than required meal or coffee breaks or socializing
with other employees.
The discussions above highlight that staff dishonesty is a
very complex problem. No single theory or explanation can
cover all situations, so the prevention strategy has to be
comprehensive with multiple layers of prevention apart from
the physical security and situational crime prevention
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measures. The first line of defence can be pre-recruitment
screening, background checks, psychological integrity tests
and skilful interviewing to weed out prospective dishonest
employees (Hollinger and Davis, 2006).
The next line of defence can include having clear and
comprehensive policies for the workplace. These should
clearly state what would be ‘acceptable’ and what behaviour
would not be tolerated. The policies should also outline
what form of disciplinary control would be exercised and the
forms of punishment clearly outlined for dishonesty and
delinquent behaviour. These policies have to be well
publicized so that staff can clearly understand, as this
would not only have a deterring effect but would also
encourage an organisational culture which could discourage
dishonest behaviour (Department of Criminology, 2009b).
According to ACFE, ‘occupational frauds are much more likely
to be detected by a tip than by audits, controls or any
other means’ (ACFE, 2008: 4). It would have to be ensured
that the organisation and the management are fair and
equitable in their dealings with all employees, to avoid
sabotage. The organisation has to give out a supportive
message to its employees stressing the benevolence of the
company, both as a way of showing that the employee has
really no need to steal, and also to emphasize the status,
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reputation and benefits the employee will be throwing away
by indulging in dishonest practices (Speed, 2005).
Finally, the organisation would need to have effective
internal control and accountability policies to deal with
delinquent staff. In a survey conducted by University of
Leicester in 2003, 70% of the 2,000 people questioned
admitted they would commit fraud if they knew they would get
away with it (CIPD, 2007: 12). Therefore, the policies
should be directed towards increasing the perceived risks
and costs of punishment and reducing the anticipated rewards
as well as inducing guilt or shame. The organisation should
make the staff well aware that wrongdoers would be seriously
punished and sanctions would be applied very quickly
(Bamfield, 1988). All data and information regarding
internal theft and staff dishonesty should be collected and
maintained. This could include historical records of details
of the offender, the offence and the method of perpetration.
Such data can be very useful and can provide a strong basis
for understanding the criminal behaviour and providing an
ecologically valid foundation to the security manager for
developing crime prevention strategies (Dodd, 2003).
There can also be certain social measures and interventions
to reduce the motivation to offend. These social crime
prevention measures would work to create a conducive and
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equitable atmosphere for every individual. As discussed by
Shaftoe (2002), a comprehensive social crime prevention
program could consist of providing support for parents
before and after child-birth; parenting skills training and
family support; provision of good quality nurseries and pre-
schools; providing personal, social and moral education in
schools; provision of adequate playgrounds and areas of
youth activities; providing training and employment for
useful or meaningful work; providing help to overcome or
reduce the damage caused by alcoholism or drug abuse and
mediation or other community based services for conflict
resolution.
It can be concluded that managing and preventing the offence
of staff dishonesty is clearly of vital importance to any
security manager in order to prevent losses to the
organisation. The various forms of staff dishonesty provide
an insight to the security manager to understand the
problem. It is also very important to understand why some
staff indulged in dishonest practices and to understand this
deviance in the light of various criminological theories.
The possible neutralization techniques used by deviant staff
to explain their behaviour are also useful for the security
manager in understanding the offence committed and
formulating preventive strategies. It was also found that
the problem cannot be explained by a single theory or factor
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and staff dishonesty depends on a variety of factors and
circumstances. The role of a security manager in a retail
store highlighted that staff dishonesty is a complex problem
and can only be managed by a well planned strategy and
multi-pronged approach with different layers of prevention,
including situational as well as social crime prevention
measures. This is only possible if the security manager has
a deep understanding of the problem in light of the
explanations offered by various criminological theories.
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