How to reduce employee theft without nagging: 4 tips from behavioral economics

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Tip 4 of 4: Give a random reward

I know, this sounds like a bad idea. Why should you give rewards for not stealing, when people aren’t supposed to steal in the first place?

The reason is one has to be practical. Theft is a reality and there is going to be some cost to reducing it. If you simply go for a brute approach of reducing theft, you may spend more to deter theft than you end up saving. Here is one example.

A local transit authority was so concerned about the level of pilferage that its board approved a rather large budget item specifically to go after low-level thefts. Amount spent on reducing the problem: $500,000. Amount recovered: about $10,000. Therein lies the dilemma: To account for every pencil, paper clip, stamp, and long distance call would be 10 times the risk. Besides, it is much more cost-effective to understand what motivates people rather than to assume everyone is dishonest. (Quote via FindArticles)

One company I read about instituted a random reward as follows: truck drivers were given random inspections, and if they were found clean twice in a row, they would get a small bonus. Another instituted a reward system in its warehouse. If shrinkage of goods was sufficiently low, then employees were allowed to take home goods up to a certain value. This increased personal responsibility and reduced theft.

In conclusion, there are many ways to reduce employee theft in creative ways. Remember this the next time you are angry about employees stealing from your office.