Is Pilferage Really Stealing?

Pilfering refers to taking small items that don’t belong to you, usually on a repeated basis. People who pilfer generally do not think of themselves as thieves. Because the items are small, they are often considered insignificant. Pilfering can take many forms such as taking small amounts of office supplies, including pencils, pens, paper, envelopes, and postage. Many do not think it is especially wrong to make long-distance phone calls from a company phone. Because these things are done without company permission, they are considered theft. Pilferage costs a lot of money, and it is against the law. Joseph Wells, a former FBI agent, estimates that employees pilfer as much as $200 million a day, almost $4 per employee.

A landmark survey in the early 1980s by Hollinger and Clark found that fully 80 percent of the 9,000 employees they surveyed admitted to noticeable amounts of pilfering from their employers (Theft by Employees, Lexington Books, 1983). Perhaps even more surprising was that many employers said there was nothing really wrong with it.

In the minds of most employees, there is a dramatic distinction between pilfering and outright theft. They see stealing as wrong, but pilfering as rather common and an accepted perk of employment. From an organizational perspective however, the difference is not so great. Everyone agrees that taking $10 from the cash register is a dishonest act. But, not everyone agrees that it is dishonest to use $10 of company postage by processing personal announcements through the company’s postage meter.
One of the most serious problems of pilfering is that it leads to a blurring of the ethical distinctions between right and wrong. Taking a pen home from the office is not wrong if the employer grants permission. Indeed, some employers invite employees to use office supplies at home or to use the office for personal business because it maximizes an employee’s efficiency. However, there is strong evidence to suggest that unapproved pilferage leads to theft of small items, and theft of small items leads to theft of larger items. People who commit theft of any kind must rationalize their behavior to maintain their feelings of self-worth. Employees who pilfer soon develop the attitude that pilfering is not really wrong. In time, they develop other justifications for their pilfering, such as the company owes it to me, everybody is doing it, managers do it, or management knows about it but doesn’t do anything to stop it, so it must be all right. Such rationalizations frequently lead to theft on a larger scale.

Why People Pilfer and Steal
Fraud research has identified three variables that are significant in determining whether a person will be dishonest: a) moral character, b) situational pressures, and c) opportunities.
Moral Character refers to a person’s commitment to do and say what is right. People with high moral character don’t take things that don’t belong to them and they are dependable and trustworthy.
Situational Pressures refer to the specific problems a person might face at a particular time, especially a need for money.
Opportunities refer to the ease with which a person can take something and not be detected. Opportunities are enhanced when detection, prosecution, and punishment are unlikely.

Finding a Solution
The big question is: “What can a company do to minimize pilferage?” We offer the following suggestions to help companies control pilferage:

. Talk with employees, preferably in small groups, about the problem of pilferage. Employees need to understand that pilferage costs the company a lot of money – perhaps not individually, but in total. Employees should also understand that taking anything without permission, even if it is only worth a few cents, should be considered stealing.

. Establish clear policies about what the company considers to be acceptable. Employees should be informed of the resources they will receive and they should also be reminded that the resources belong to the company and should generally be used for company purposes. Exceptions should be specified and discussed. Keep in mind that employees need to learn how to balance company resources and personal resources. This is particularly important as people are doing more of their work at home.

. Instill trust in your employees. Let your employees know that you trust them. Most people will be more honest if they are put in a position of trust than if their honesty is questioned or they are threatened with punishment for small infractions. Positive reinforcement is generally better than negative reinforcement for controlling pilferage among casual and chronic pilferers.

. Set a good example. There is strong evidence that middle and upper managers pilfer as much as lower level employees. Setting a good example should start at the top. Employees who hear one story, but see inconsistent behavior, will be confused by the policy and will generally follow the bad example. $

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