Occupational Crime and Avocational Crime - Essay Example

Employee theft constitutes a significant financial challenge to the economic survival and sustainability, let alone growth and development, of business entities. Whether approached from the perspective of senior executive or junior employee theft, the cost to a company is enormous. As Friedrichs (2004) reports, senior level executives have customarily engaged in both direct and indirect theft. Direct theft or embezzlement, implying the removal of funds from corporate accounts into personal ones, can reach the hundred million dollar figure, as in the case of Day-Lee Foods’ CEO, Yasuyoshi Kato. In comparison junior employee theft is usually of the more direct kind and involves pilfering or the direct theft of store and business items. While, the former hardly ever reaches the level of the latter, it still represents a formidable challenge to employees, and most especially to retail entities (Friedrichs, 2004). It is within the context of the stated that the imperatives of developing a system as would effectively curtail employee theft need be understood. With specific focus on the problem of inventory shrinkage which faces retail companies, this paper shall seek to define articulate a strategy and provide a set of recommendations for the curtailment of employee theft. While conceding that electronic surveillance may play a fundamental corrective function, the paper shall argue for a solution which embrace employees and works with them rather than against them. One of the more important challenges confronting the financial heath of retail companies is employee theft. A study undertaken by Hollinger and Pernice (1998) determines that employee theft is the primary cause of inventory shrinkage in retail companies, culminating in losses of billions of dollars per annum. Not only had that but, in immediate comparison to shoplifting, the researchers found that while a single incident of shoplifting averages $212.68, one incident of employee theft averages $1,058.20. Within the context of the aforementioned comparison, it is hardly surprising to discover that employee theft is the primary factor behind inventory shrinkage (Hollinger and Pernice, 1998). Given the dimensions of the problem, as articulated in the preceding paragraph, it is incumbent upon retail companies to design and subsequently implement a strategy as would confront and overcome employee theft. Hollinger and Pernice (1998) maintain that electronic surveillance has, over the years, proven its effectiveness and, in immediate comparison to other strategies, has proven to be “the most popular loss prevention system” (Hollinger and Pernice, 1998, par. 6). The knowledge that their crime may be recorded and that they may have to face the concomitant legal and career repercussions functions to control an employee’s desire or tendency to steal. As such, the adoption of electronic surveillance may be a solution to the problem. Even though electronic surveillance has proven its effectiveness over the years, the fact is that such systems are expensive and function to demoralise employees. Friedrichs (2004) emphasizes, other than the cost factor, electronic surveillance may not be the optimal solution to inventory shrinkage due to the negative effect that such systems have upon employee loyalty. In other words, despite the fact that the system has a proven advantage, it has an undesirable effect on employee morale. Rather than install expensive electronic surveillance systems, it is more advisable for a retail company to comprehend the nature of the workplace environment and the factors therein which either allow or motivate such actions. Friedrichs (2004) argues that employee disgruntlement, borne out of the feeling of being underpaid, overworked and unappreciated, and the existence of opportunities to steal are the primary causal factors of inventory shrinkage. In other words, a lack of commitment to the workplace, concomitant with workplace disorganization compels employee theft. The solution to employee theft, as explained in the above, does not lie in the installment of close circuit television, or any other electronic surveillance system, but in confronting the work environment factors which motivate theft. Employee disgruntlement can best be addressed through the design of a corporate culture which fosters a sense of employee commitment to the company’s welfare and motives that level of loyalty as would function to negate theft motivators. A company, however, can only create that type of culture and instigate the requisite loyalty if it, itself, demonstrates itself as loyal to its employees and intent on promoting their welfare. Should retail company communicate the suggested, it would foster the requisite loyalty. The fostering of loyalty, however, will only partially solve the problem of inventory shrinkage, as a comprehensive solution further depends upon fair wage. One cannot overlook the fact that a company’s failure to fairly compensate its employees may function as a fundamental source of the inventory shrinkage problem. Therefore, to negate the financial motivators at play here, a company needs to both ensure that a system of fair compensations is in place, in addition to a rewards system. Even though the former has a financial cost, the cost of rewarding employees for their loyally and performance will hardly measure up to the losses incurred by inventory shrinkage. It is within this context that a company need seriously reconsider its existent compensation and rewards systems, not simply to instigate loyalty but to offset the financial motivators behind inventory shrinkage. In the final analysis, the solution to the problem o inventory shrinkage does not necessarily lie in the adoption of electronic surveillance systems but in the design of a workplace environment which fosters employee commitment and loyally. It is within the context of the stated that fair compensations and an attractive awards system emerge as the optimal solutions to the identified problem. Bibliography Hollinger, R. and L. Pernice (1998. Survey shows shoplifting and employee theft continue to cost billions. Retrieved on Feb 2, 2006 form http://www.napa.ufl.edu/98news/theft98.htm Friedrichs, D. D. (2004). Trusted Criminals. Thomson and Wadsworth. Read More