Rationales for employee theft in hospitality: excuses, excuses.(Report)

This study aims to identify the prevalence of employee theft and rationalisations for taking company property, to help practitioners reduce workplace theft. The characteristics of workplaces where theft is common are identified, the items most likely to be stolen, the characteristics of the likely culprits, and their justifications for stealing. The study uses a questionnaire to collect quantitative and qualitative data from hospitality workers, whose responses are analysed to determine the severity of employee theft and rationalisations for taking company property. Employee theft is shown to be common, and strongly associated with workplaces where under-staffing and inadequate training are also common. Casual workers, young people, and those paid least, are found to be those most tolerant of theft. By addressing the relationship between social consensus, moral reasoning, and petty theft, the discussion identifies causes of petty theft from an ethics perspective.

Keywords: hospitality, employee theft, petty theft, staff turnover, ethics, training

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Theft is costly and difficult to control. Employee theft in America was estimated by Niehoff and Paul (2000) as USD200 billion per annum (NZD458 billion, converted at the December 2000 rate), and the cost of New Zealand retail crime estimated by Guthrie (2003) as NZD564 million. Guthrie's report (in which liquor shops were those most represented) found that 48% of retail crime was attributable to employee theft, resulting in a loss of around NZD270 million annually.

Theft is defined as the 'dishonest appropriation of another's property with intent to deprive him or her of it permanently' (Shorter Oxford English Dictionary, 2003, p. 3233), and generally refers to items of sufficient value that their owner might regret the loss, such as a bottle of wine, or a $10 note. When multiple thefts of minor items occur, a dilemma emerges in relation to quantity; at what point is the theft of alcohol or money (for example) so inconsequential as to be a tip, souveniring, or merely tidying up? The common law principle of de minimis non curat lex (the law is not interested in trivia) offers some guidance, and common sense should prevail. However, the zero tolerance demonstrated by the Auckland Subway franchisor who dismissed a kitchen-hand for stealing a soft drink (Dunedin Subway Sacking, 2007) suggests that hospitality managers are indeed interested in minor thefts, as they can contribute to significant accumulated losses. This study primarily focuses on these minor thefts.

Minor thefts can be reclassified as ethical behaviours and therefore not deemed as theft. This study explores rationalisations given for thefts that have allowed respondents to act in ways that are more acceptable than unethical behaviours.

Literature Review

Prevalence of Theft

Although recruitment, retention, and understaffing issues in hospitality are well documented (e.g., Baum, 2002; Brien, 2004; Choi, Woods, & Murrmann, 2000; Gustafson, 2002; Jameson, 2000), the literature seems remarkably unconcerned with theft (Jones & Groenenboom, 2002). Perhaps this lack of interest arises from the notion that petty theft, pilfering, and souveniring are not real crimes. 'Real theft', however, is generally perceived as a serious matter. Theft (followed by sexual harassment) was considered the most serious breach of ethical standards by hospitality human resource directors and students in Stevens and Fleckenstein's (1999) research, a result subsequently confirmed by both Yeung (2004) and Poulston (2006). Similarly, in a study of attitudes to crime, in which 1500 New Zealanders were surveyed (Paulin, Searle, & Knaggs, 2003), burglary with a weapon was perceived as a more serious offence than either assault or importing heroin.

Such strong attitudes towards theft, along with concerns about financial losses and consequent price increases, should be sufficiently compelling to limit theft in hospitality workplaces to a manageable level. However, employee theft is often underestimated (Oliphant & Oliphant, 2001); it is ubiquitous, persistent, and expensive, simmering below the surface of many hospitality workplaces, largely unnoticed, or ignored.

Possible Causes of Theft

Theft is associated with staff turnover (Thorns, Wolper, Scott, & Jones, 2001; Withiam, 1996), a lack of trust between staff and management (Niehoff & Paul, 2000), organisational dishonesty (Cialdini, Petrova, & Goldstein, 2004), and general employee unhappiness (Korolishin, 2003). Theft is also stimulated by unfair or inequitable employment conditions (Adams, 1963; Greenberg, 1990, 2002; Withiam, 1996) such as are often associated with hospitality workplaces. Hospitality pay is typically low (Gilbert, Guerrier, & Guy, 1998; Mars & Nicod, 1984; Rowley & Purcell, 2001; Tourism Industry Association New Zealand, 2006) and ad hoc personnel practices common (Price, 1994). Many workplaces suffer from high staff turnover and rely heavily on youth and migrant labour, as the barrier to entry is low, attracting school leavers, students, and other transient workers. Staff shortages, time constraints, work overload, long hours, shift work and difficult customers all help contribute to stressful working environments (Lo & Lamm, 2005). In these conditions it seems hardly surprising that some employees try to improve their lot by stealing from guests, the company, and each other (Divine, 1992; Mars & Nicod, 1984).

Furthermore, the characteristics of hospitality workers may further predispose the industry to theft. In New Zealand, 40% of hospitality workers are under 25 (Whiteford & Nolan, 2007), with the largest cohort being the 15- to 19-year-old age group. Age is considered by many writers (e.g., Freedman, 1990; Muncy & Vitell, 1992; Posner & Schmidt, 1987; Ruegger & King, 1992; Wong, 1998) to be a significant influence on ethical decision making, with young people cited as those most tolerant of unethical behaviours.

The use of student workers also represents a significant risk to hospitality workplaces, which are an important source of work for them (Hoel & Einarsen, 2003). While managers have been identified in several studies as having higher ethical values than students (Arlow & Ulrich, 1980; Carroll, 1975; Freedman, 1990; Glenn & Loo, 1993; Stevens, 2001; Stevens & Fleckenstein, 1999; Stevens, 1984), such findings rely not just on age as a predictor of ethical values, but also on pay and seniority. For example, Freedman found that hospitality management students under 26 with no management experience, had lower integrity scores than hospitality managers, and therefore concluded that students' ethical values were lower than those of managers. Moreover, this writer was unable to find any research identifying students as more ethical than nonstudents, graduates, or managers.

The hospitality industry's particular characteristics (e.g., cash transactions, low-skill jobs), the prevalence of small businesses and the tradition of payment in kind, particularly expose it to theft (Geller, 1991). Products such as" food and liquor provide a veritable menu of opportunities for supplementing low pay through informal rewards, which may or may not be sanctioned by management. This tradition of payment in kind provides numerous opportunities for unapproved perquisites, pilfering, and fiddling (Johnson, 1983), unfairly rewarding those who help themselves to their employers' property. Mars and Nicod noted that pay is just one part of the total rewards available in hospitality, and fiddles, knock-offs, and free food commonly represent 'a normal part of the total rewards' (1984, p. 6). Fiddles are a means of extracting cash from a person or business in such a way as to conceal the theft (e.g., adding water to a bottle of gin and taking cash to the equivalent value), and knock-offs are thefts of products (e.g., uncooked meat), usually with the intention of selling them later; in this writer's 15 years in hotel management, both were found to be common.

Ethics and Morality

Ethics and morality are strong influences on theft. Good ethical standards rely on principles, values, duties and obligations. Because ethics are community rules governing interactions between people, unethical behaviour is that which can hurt or harm another in the community. An …