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Stop! Employee Theft

How to keep your employees from ripping you off. It's simple: Companies should try treating them with more respect.

While the exact toll will never be known, employee theft is indisputably epidemic. And the best solution, contends Jerald Greenberg, Ph.D., isn't always aiming more surveillance cameras at workers. Instead, companies should try treating them with more respect.

Theft is particularly common when employees feel mistreated, reports Greenberg, professor of business ethics at Ohio State University. Pay cuts, lay-offs, even banning workplace smoking -- all may set the stage for theft. But managers can slash the pilferage potential by explaining the rationale for unpopular actions and expressing regret for any ill effects that result.

In one of Greenberg's studies, a financially strapped firm opted to temporarily cut salaries at two plants. At one site, managers gave only cursory explanations for the pay cut and expressed little sympathy for the plight of employees. The result: levels of missing inventory more than doubled.

But at the second plant, where management painstakingly explained the need for cutbacks and made clear their regret, theft rose only modestly. Follow-up studies in Greenberg's lab confirmed that simply sharing information with people and treating them with dignity reduces their inclination to steal in response to injustice.

"There's no good reason why companies shouldn't do these things," Greenberg insists. "They're easy -- and they're free."