Employee Theft: The Big and Little of It

Management/Staff Strategies

By Allen F. Weitzel

Anyone can steal. The secretary that makes personal copies on the copy machine. The manager who mails his household bills using company stamps. The VP who damages the video camera on his vacation. Personnel managers authorizing and taking salaries for fictitious workers. The parking employee borrowing five bucks for lunch. It's all about the degree of theft and the intention. What is the value of what was used, damaged or taken? Was the theft premeditated?

The FBI reports that employee theft losses exceed an estimated $4.9 billion annually, averaging $700 per offense. Experts estimate that 30 percent of employees steal, and 60 percent will steal if given sufficient motive. Just as there are different degrees of theft, there are also different kinds.

Employee theft

Employees steal for various reasons. They believe they are working hard and are not rewarded adequately. Employees see others stealing and believe that it is OK. When employees become angry over misunderstandings, revenge can lead to theft. Economic hard times may trigger dishonesty. Employees may take merchandise from storerooms. Workers may steal from other employees, taking purses from back rooms or stealing from another employee's cash drawer, so it appears the coworker is dishonest.

Maintenance theft

There are two types of maintenance theft. One is the employee who steals for profit. Be wary of the worker that enters other department areas to make repairs and then steals products during that process. The other scenario is employees who want supplies for their home projects. This is theft for convenience rather than profit. Purveyors and contractors also can steal, so be alert when they are on the property.

Productivity theft

Unmotivated employees create significant company losses. Employees who fail to do their own work are performing an ambiguous form of theft by forcing other employees to carry their load or the company to pay overtime to get jobs completed. The simplest form of productivity theft is the employee who comes in late, leaves early and takes long breaks. There are also employees who make numerous personal phone calls, chat excessively with coworkers or spend all day Web surfing. Employees add to productivity theft by allowing friends to congregate at their station, which not only slows them down but also creates safety concerns when the employee's attention to duty wanes. There are employees who practice time-card theft by having their friends clock them in when they are not working. Just as employees who steal money or products must be monitored, time thieves also must be disciplined.

Easy solutions

There is no magic wand that managers can wave to prevent employee theft. Managers must talk about theft, so employees know that management is not blind to it. To begin the implementation of prevention strategies, be open about company discipline procedures regarding dishonesty. Use all the security procedures that the company can afford to implement. Establish strict and equal rules for use of all company equipment and products. Hire mystery shoppers to observe the operation. Pull cash drawers in mid-shift and check for shortages. Remove cash drawers to look for hidden or forgotten currency. Inspect workstations after an employee's shift. Encourage employees to protect themselves by checking and documenting their work, so they can be sheltered from false accusations. Price every item in stores. This prevents the employees from inventing or discounting prices and discourages price-tag switching.

To prevent product theft, establish a policy outlining when and how employees may go to and from their vehicles. Only allow visitors to meet with employees at a designated site and not at their workstations. Create a strict storage and inventory system. Do not permit employees to take trash, damaged items or leftover food home, free of charge, at the end of the day. If employees are allowed such freedoms, they may damage an item or overcook food, so they can take it home. Require that all waste or damaged goods be paid for, at cost. To prevent management from looking greedy, donate the money to a charity. Security should inspect all packages leaving the property. Stolen items could be hidden inside a package that has been authorized for removal. Prosecute dishonest employees.

Advanced solutions

The larger the facility, the more technology is needed to protect the resources. For serious theft, video surveillance is the primary defense. Surveillance cameras are helpful, but assign adequate staff to monitor the cameras. Employees are smart, and some may watch for an opportunity to steal. On the other hand, understand that security measures could negatively affect morale, making employees feel that they are not trusted. Consider this issue when establishing a security program.

Use paper trails to help employees become responsible. Require employees to sign for money or goods when it changes hands. Limit access to supply stock and cash rooms. Require employees to work in two-person teams when the opportunity for theft is obvious. Alternate which employees work as a team, so the same two workers are not constantly together.

Unexpectedly drop in on employees. Managers should not establish a routine for when they check on their staff. Use non-peak hour visits or night surveillance. Employees rarely expect managers to leave their home at night to check on the crew. When employees see the manager at odd hours, the word gets out that the boss does check on the staff.

Document times and dates when incidents occur. Theft trends may develop, and then through referencing the work schedule, suspects can be identified. Maintain up-to-date inventory-control systems tied to register sales.

In accounting, do not permit the accounts-payable person to reconcile the bill of lading paperwork. Do not allow the purchasing department to be the same employees who receive deliveries. Records must be current and accurate. Do not permit the accounting department to annually change report formats. Always compare "apples to apples" when studying financial reports. If record-keeping documentation is sloppy, theft will be harder to detect.

Management techniques

Conduct as much pre-employment screening of candidates that the law will allow to hire the most trustworthy staff possible. When employees are hired, policies on theft and the misuse of time should be made clear. Employees must understand that every department will aggressively combat dishonesty.

Search for signs of internal theft. Managers should trust their eyes and be suspicious of anything amiss. If something does not seem right, it may not be right. Watch for a sudden rise in a worker's living standards. Pay attention to employees who insist on handling routine clerical tasks or resist inspections. Listen to clients who complain about being overcharged. Pursuing customer grievances can uncover internal dishonesty.

Address employees who have substance-abuse symptoms or problems. The company should have a substance-abuse program in place.

Be fair with employees. If they feel the company is unfair, they will invent ways to steal. Be certain about a worker's misconduct before making accusations.


Whether or not the company approves of moonlighting, management must understand that it does happen. Employees moonlight because they feel they need extra income for daily living expenses, have an impending large cash outlay, want mad money, need to rebuild their declining retirement portfolio or because their jobs are no longer challenging.

Moonlighting also can be just a spare-time hobby that cuts into regular work hours. Some employees moonlight at side jobs on their free days and balance their workdays between the two jobs.

Employee theft can occur when employees uses company resources to do work for other employers, or pursue their hobbies, on company time. Employees may be using company tools or equipment to perform moonlighting tasks. Employees could be leaving early from work to go to a second job. Employees may moonlight so much that they constantly come in late for work or call in sick because they are rundown. Accuracy and decision-making may suffer when employees moonlight on a regular basis. Often when an employee takes on a second job, that job begins to take precedence.

Property theft can increase due to moonlighting scenarios. Employees innocently borrow tools to use at their other jobs and forget to return them. Often overlooked is employee use of phones, computers, copy machines and fax machines. The wear and tear on frequently used equipment is seldom addressed as theft.

The best countermeasure to address moonlighting is to set up and document clear procedures and train the employees on those procedures. Make sure that policies addressing the use of company equipment are clear and enforced uniformly for workers and management, whether it be the use of a hammer, copy machine or company vehicle. Legally, if an employee were using the company equipment on the property to benefit a moonlighting job, the firm would, most likely, be responsible for an injury if the worker were hurt, even if the employee was on a unpaid break. Review, with legal counsel, the consequences if an employee damages company equipment or is injured while working on a moonlighting project.

Some employees may moonlight because they feel they are not adequately paid for their position. Conduct salary surveys with similar recreational facilities to make sure employees are receiving fair salaries. If an employee feels the need for extra income, offer more hours. Ask if other departments have jobs where they can use the worker. If a moonlighting situation is getting in the way of the work the employee was hired to do, address it as the company would for any other lack-of-performance issue. Explain the concern to the employee and allow the employee to suggest solutions. Document the performance issues as they occur. Only make exceptions as they would be made for any other worker. If the company would rather have employees moonlight on their own company tasks, then employees need to be motivated to do so. Increase their pay, provide more work, make it more fun to be at work or show them how they are valued at the company.

Outside intervention

A proactive relationship should be established with the police. Have meetings during the off-season and establish action plans that both sides can administer when a theft occurs. Ask law enforcement to survey the facility and then implement their suggestions to deter theft. Always let a professional investigate embezzlement. When the company decides to prosecute an employee, the District Attorney will determine if the case is worth pursuing.

The best defense

Create an atmosphere in which employees know that if they steal, they will get caught.

If a worker is caught stealing, do not hide that fact from coworkers. Employees must understand that when others steal from the company, they are stealing from honest employees, causing reductions in profit-sharing contributions or future pay raises.

Offer a source for counseling to workers with financial difficulties. Set an honest example. Remind employees that no one, including management, is above suspicion. If management is seen dipping into petty cash, fudging expense accounts or taking home equipment, dishonest employees will feel justified in doing the same.

Reward employees who report dishonest or suspicious activities. All reports must be taken seriously. Protect these employee sources without exception. Such positive actions will spread throughout the facility. Establish countermeasures and procedures addressing every type of corruption. Quite simply, reward integrity and establish procedures that make it easy for employees to remain honest.


Allen F. Weitzel has 40 years of recreation industry experience. In addition to consulting for the industry, he currently holds a management position at a California park, overseeing risk management and training. He can be reached at weitzel@blueneptune.com.

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