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Worth Pondering & Sharing With Mgmt

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  • Worth Pondering & Sharing With Mgmt

    These findings published in the most recent Loss Prevention E-Newsletter are important enough to be incorporated into company policy with regard to increased theft by employees when they give advance notice of termination, as well as when there are loose controls.

    Short version if you don't have time to read it all:
    • Employees tend to steal more during their "notice periods".
    • It may be better to pay off employees when they quit and let them go immediately.
    • If releasing the employee immediately would present a hardship or create other costs (i.e. overtime pay), consider shifting the short-timer to duties where the risk of theft is lower (i.e., taking them off register duties) or where they can be most closely supervised.
    • Tight controls (frequent inventories, good register practices, oversight, etc.) do matter in theft reduction, although some theft will still occur.
    • Employee turnover has always been known to have high direct and indirect costs, and increased theft would make them even higher than thought.
    • It is worth expending more effort to reduce turnover with good hiring practices and decent compensation.

    One thing that'll make you chuckle is that one of the stores in the survey mentioned below reported no theft at all. This being highly improbable, we can safely assume that the average theft per store would have been higher if this one had not obviously been managed by Rip Van Winkle, snoring behind the dumpster out back. Indeed, you might even suspect that this store probably had the highest theft of all of them.

    Study Finds Link between Employee Turnover, Theft

    Erie, Pa. -- When fast-food restaurant employees give a two-week notice, supervisors might be better off to pay them for the two weeks and allow them to leave at the end of that work day, say researchers.

    "A somber fact of the workplace is that employees who have given their two-weeks' notice may be more prone to theft than employers who plan to stay on the payroll," said Dr. Peg Thoms, assistant professor of management at Penn State Erie, The Behrend College.

    Thoms presented her research findings in a paper, "The Relationship Between Imminent Turnover and Employee Theft," at the annual meeting of the Academy of Management in San Diego. Co-authors were Paula Wolper, assistant professor at Mercyhurt College, Erie; Kimberly S. Scott with Hewitt Associates LLC; and Dave Jones, doctoral candidate at Benedictine University in Hanover Park, Ill.

    "The first part of our two-pronged study revealed a significant correlation between turnover and theft in one of the largest fast-food restaurant chains in the country," Thoms noted.

    The average annual turnover for the 88 stores studied was 204 percent, with turnover ranging from 31 percent in one store to 390 in another. During the same year, reported employee theft for the 88 stories totalled $60,984, ranging from nothing in one store to $12,496 in another. Theft took place despite extremely tight controls including twice-per-day inventories.

    "The second part of our study involved a survey of 152 undergraduate college students, of whom 104 were employed, over one-third in a restaurant," Thoms said. "They were given four theft scenarios developed by a restaurant management expert.

    "Research participants in our study indicated that they would be most likely to steal in situations where they had given a two-week notice of leaving and in situations where there were loose controls," she added.

    Previous research has indicated that restaurant theft can take many forms including giving free food to friends, taking home restaurant items and swiping other servers' tips. In general, restaurant employees do not try to justify their theft, perhaps because stealing, especially pilferage, has become so common.

    Employees most likely to steal are those in financial straits, those with the greatest access to things of value and those who do not expect to continue working for their present employer, according to the researchers.

    "If a restaurant has tight management controls against theft, the average amount of theft may be so low that it may not be worth losing two weeks of productive labor when an employee gives his or her notice," Thoms said.

    However, when store managers or employees with access to valuable equipment and supplies resign, it may be in the organization's best interests to allow them to leave immediately when they give their two-week notice.

    "These findings demonstrate the need to attract, train and retain high quality restaurant managers who understand the causes of employee theft and turnover and are skilled at reducing both," said Thoms.
    Last edited by SecTrainer; 01-29-2007, 10:01 AM.
    "Every betrayal begins with trust." - Brian Jacques

    "I can't predict the future, but I know that it'll be very weird." - Anonymous

    "There is nothing new under the sun." - Ecclesiastes 1:9

    "History, with all its volumes vast, hath but one page." - Lord Byron

  • #2
    Thank you for sharing that insightful article. That will be another resource to add to my security guide.
    I am sure other members of the forum will find that just as useful.
    Enjoy the day,


    • #3
      What an article...very informative. Wish we had something like this in affect with our company. I'll be looking into the Loss Prevention E-Newsletter more often
      "Life In Every Breath"


      • #4
        I was reading that same article myself and another 1 as well from a UK LP e-newsletter. Interesting to see what goes on behind the backs of retail managers. In 1 bar I monitored, profits were actually up and so were the wages of the staff with short pours from the staff. So we set up a sting operation and in the end it meant the bar owner had to let 14 staff go as they were casuals and even he agreed he lost customers when they complained about weak drinks when he got back. Also the number of free drinks passed out was going to send him broke as the bar bunnies were waiting for the free drinks from the male bar staff every weekend.

        Most staff don't see this as stealing - just as "hey has lots of money and can afford to give some of it away to me" !!
        Last edited by NRM_Oz; 01-14-2008, 08:31 AM.
        "Keep your friends close and your enemies even closer" Sun Tzu


        • #5
          The report made alot of sence, and with the attitude of persons that I have dealt with who knew they were soon to be terminated from their job, it was a no-brainer they were the most likely employees to steal from the company.


          • #6
            This goes to show the stupidity of management when in one place, my eateries re-hired a bloke who had been not rerostered after some discrepancies and when it came time to cash register shortages this clown on his last day had 4 registers with almost $1,000.00 missing from all 4 registers. I hit the roof when I found out he had been hired due to 1 person being sick after being not hire for 11 weeks and knowing the circumstances made sure he got his bonus from the company which was picked up 3 days later in a count through cashiers. Needless to say his drinking buddy let it slip the day after he left what had happened. The manager should have been fired for this but of course senior management covered it up.
            "Keep your friends close and your enemies even closer" Sun Tzu