Vertical Markets

US study on IT and retail theft

by Mark Rowe

Employee misconduct is primarily a result of managerial policies rather than individual differences in ethics or morality. That’s according to US academics in a study titled Cleaning House: The Impact of Information Technology Monitoring on Employee Theft and Productivity.

Lamar Pierce of Washington University in St Louis; Daniel Snow Brigham Young University; and Andrew McAfee Massachusetts Institute of Technology took theft and sales data from 392 restaurant locations from five firms that adopt a theft monitoring information technology (IT) product. Since the timing of when places’ technology adoption is most likely different, they used difference-in-differences models to estimate the treatment effect of IT monitoring on theft and productivity within each location for all employees. They found significant effects in reduced theft and improved productivity that appear to be driven by changing the behaviour of workers, rather than selection effects (in other words, as the ‘problem workers, the ones worst for stealing, leave, or are made to leave, the restaurants). Although workers with past patterns of theft appear more likely to leave places than others, behavioural changes by existing workers drive restaurant-level improvements. According to the researchers, these findings suggest multi-tasking by employees under a pay-for-performance system, as they increase effort toward sales after bringing in the monitoring, to compensate for lost income due to not thieving.

For the 46-page research paper in full visit –

http://apps.olin.wustl.edu/faculty/pierce/cleaninghouse.pdf

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