Employee Crime, Monitoring, and the Efficiency Wage Hypothesis (original) (raw)
Employee crime and the monitoring puzzle
Journal of Labor Economics, 1989
1989 by The University of Chicago. All rights reserved. 0734-306X/89/0703-0005$01.50 331 332 Dickens et al. 5% and 30% of business failures each year! 1 These numbers can be placed in perspective by noting that federal corporate income tax revenues in fiscal year 1987 were 104billionandthatthefinancialcostofstreetcrimeisestimatedatapproximately104 billion and that the financial cost of street crime is estimated at approximately 104billionandthatthefinancialcostofstreetcrimeisestimatedatapproximately4 billion (Arnold 1985).
9 Employee Theft and Staff Dishonesty
2006
The concept of ‘white collar crime’ was formally introduced during Edwin Sutherland’s presidential address to the American Sociological Society in Philadelphia in 1939. Sutherland (1949) used the term to help establish his new crime theory, differential association, by challenging the discipline of criminology to pay more attention to crimes ‘committed by persons of respectability and high social status in the course of his/her [legitimate] occupation.’ Today, ‘white collar crime’ has become an umbrella concept often used to describe a host of criminal behaviors, including but not limited to, illegal financial acts, deceitful or dishonest business practices, or abuses of state power. Scholars generally include employee theft, embezzlement, corporate crime, computer crimes and even political or governmental crimes as primary examples. While white collar crime continues to be used as a crime category, most scholars have developed more precise definitions that focus on specific types o...
Working woman
If you steal 50,000fromabankinarobberyusingagunyouprobablywillspendseveralyearsinprison.Whathappensifyoustealafewhundredmilliondollarsfromabankinawhite−collarfraudwithnothingmoredangerousthanaball−pointpen?Maybealmostnothing.In1975,thepresidentofalargeCaliforniabankanddirectorofarathersizableconglomeratepleadednocontesttochargesofwhathasbeendescribedasoneofthelargestsystematiclootingsofapubliccompanyeverrecordedintheUnitedStates.Becauseofthepleaofnolocontendere,adetailedaccountoftheswindlewasnotmadepublic.Thepenaltywasludicrous:afineof50,000 from a bank in a robbery using a gun you probably will spend several years in prison. What happens if you steal a few hundred million dollars from a bank in a white-collar fraud with nothing more dangerous than a ball-point pen? Maybe almost nothing. In 1975, the president of a large California bank and director of a rather sizable conglomerate pleaded no contest to charges of what has been described as one of the largest systematic lootings of a public company ever recorded in the United States. Because of the plea of nolo contendere, a detailed account of the swindle was not made public. The penalty was ludicrous: a fine of 50,000fromabankinarobberyusingagunyouprobablywillspendseveralyearsinprison.Whathappensifyoustealafewhundredmilliondollarsfromabankinawhite−collarfraudwithnothingmoredangerousthanaball−pointpen?Maybealmostnothing.In1975,thepresidentofalargeCaliforniabankanddirectorofarathersizableconglomeratepleadednocontesttochargesofwhathasbeendescribedasoneofthelargestsystematiclootingsofapubliccompanyeverrecordedintheUnitedStates.Becauseofthepleaofnolocontendere,adetailedaccountoftheswindlewasnotmadepublic.Thepenaltywasludicrous:afineof30,000 to be paid at the rate of $100 per month for the next 25 years at no interest, plus five years of probation.
Occupational crime, occupational deviance, and workplace crime
Criminal Justice, 2002
The concept of occupational crime—as one of the principal forms of white collar crime—has been quite familiar and widely invoked since the publication of Clinard and Quinney's influential Criminal Behavior Systems: A Typology. More recently, however, the term occupational crime has been applied to activities quite removed from the original meaning of white collar crime, and it has been used interchangeably with such terms as occupational deviance and workplace crime. In the interest of greater conceptual clarity within the field of white collar crime the argument is made here for restricting the term `occupational crime' to illegal and unethical activities committed for individual financial gain—or to avoid financial loss—in the context of a legitimate occupation. The term `occupational deviance' is better reserved for deviation from occupational norms (e.g. drinking on the job; sexual harassment), and the term `workplace crime' is better reserved for conventional fo...
CORRELATES OF EMPLOYEE THEFT: A MULTIDIMENSIONAL JUSTICE PERSPECTIVE
International Journal of Conflict Management, 1995
In a field study, we build on previous research examining employee theft, which has focused on the influence of job dissatisfaction and pay inequity (distributive injustice). In a survey of employees at 18 fast food restaurants, where employee theft was a problem, we examine the relationship between employee-observed theft and justice perceptions (distributive, procedural, and interactional justice), employees' job satisfaction, and judgments regarding the deviancy of theft. As expected, perceptions of procedural justice and employees' judgments regarding the deviancy of theft explained a significant amount of variance in employee-observed theft; the other predictor variables did not. Theoretical and practical implications for managing employee theft are discussed.
2012
Corporate criminal liability legislation has been the subject of a widespread debate around the world in response to the financial scandals of the early 2000s. The existing legal regimes en- tail compliance requirements, such as internal monitoring mechanisms, with the aim of inducing firms to detect the wrongful conduct of their agents. We develop an analytical framework to address when and to what extent firms may find convenient to adopt these regulatory devices. We conclude that more productive firms and those operating in sectors where managers have more opportunities to undertake criminal activities are more likely to prevent such activities (through monitoring or the payment of e¢ ciency wages). When the potential returns of ille- gal activities are high or when the firms are large, implementing internal monitoring devices may be optimal, while smaller firms should generally prefer the payment of efficiency wages to prevent crimes by managers.
Antecedents of white collar crime in organizations: A literature review
AFRICAN JOURNAL OF BUSINESS MANAGEMENT, 2011
This study is focused on reviewing the literature of white collar crimes to identify factors which determine them in public sector organizations. Referring to a crime committed by someone of high social status, the literature suggest that the major causes of prevalence of white collar crimes are peer support, corporate culture, lack of accountability and lack of reporting. This review helps to understand the importance of white collar crime in today's public sector organizations.
Are You Paying Your Employees to Cheat? An Experimental Investigation
Working Papers, 2008
We compare misrepresentations of performance that occur under a target-based compensation system with those that occur both under a linear piece-rate and a tournament-based bonus setting by means of a controlled laboratory experiment with salient financial incentives. A widely used anagram word-creation game was employed as the experimental task. Results show that whether one considers the number of overclaimed words, the number of work/pay periods in which such over-claims occur, or the number of participants who make an over-claim at least once, target-based compensation produced more cheating than the other two systems. In particular, as argued by Michael Jensen (2003), linear piece-rates produce significantly less cheating than a target-based scheme. Moreover, a tournament scheme based on relative performance also results in significantly less cheating than a target-based one. In addition, as first demonstrated by Schweitzer et al. (2004), cheating is more likely under a target-based scheme the closer a participant is to the target.
Employers Gone Rogue: Explaining Industry Variation in Violations of Workplace Laws
SSRN Electronic Journal, 2012
Drawing on an innovative, representative survey of workers in Chicago, Los Angeles and New York City, the authors analyze minimum wage, overtime, and other workplace violations in the low-wage labor market. They document significant inter-industry variation in both the mix and prevalence of violations, and show that while differences in workforce composition are important in explaining that variation, it is differences in job and employer characteristics that play the stronger role. The authors suggest that industry noncompliance rates are shaped by both product market and institutional characteristics, which together interact with labor supply and the current weak penalty and enforcement regime in the U.S. The paper closes with a research agenda for this still young field, framing noncompliance as an emerging strategy in the reorganization of work and production at the bottom of the U.S. labor market.
Employee petty theft: not so petty for managers and organisations!
Petty theft, as a line of enquiry is not highly developed in the literature. References to it tend to be subsumed within publications regarding employee theft, a topic, broader in scope that has attracted considerably more attention. Given evidence suggesting that petty theft represents a substantiality of all employee theft, and exceeds a billion dollars’ worth of loss to Australian organisations, it is curious that the topic has not received more focussed attention. The paper discusses relevant literature and explores the nature of petty theft from individual and organisational perspectives, giving consideration also to some ethical implications. The authors conclude the paper with a call for more specific research into the conceptualisation of petty theft, its causes, consequences and management.
Determinants of Employee Fraud in Workplace: A Fraud Triangle Perspective
Economic Affairs
This study examines the factors influencing fraudulent activities in the workplace. Specifically, this study adopts the Fraud Triangle theory to examine whether rationalisation, opportunity, and pressure influence fraudulent activities in the workplace. Using a questionnaire survey on employees in a company, this study shows that rationalisation is positively and strongly significant in influencing fraudulent activities in the workplace, indicating that when the employees tend to be rational, it will positively influence their action toward fraudulent activities in the workplace. This study also shows that the opportunity factor influences fraudulent activities in the workplace, indicating that even when there is an opportunity, it does not positively influence the employee's action toward fraudulent activities in the workplace or that there is a lack of opportunity to commit fraud. However, this study shows that pressure does not positively influence fraudulent activities in the workplace. The findings in this study contribute to the literature on fraudulent behaviours. The findings of this study can assist companies in understanding their employees' needs and strategizing to enhance their employee management. HIGHLIGHTS m This paper is devoted to studying the factors influencing fraudulent activities at the workplace of XYZ company, which is a food and beverage company using the fraud triangle theory. m In the course of the study, the effect of rationalization, opportunity and pressure faced by employees on fraudulent activities are examined.