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The two articles highlight the prevailing issue of employee theft in the retailing industry. Some of the giant retailing companies such as Amazon have been developing mechanisms to eliminate theft among workers in their stores and warehouses. However, it is not easy to eliminate employee theft in the retailing industry because there are limited options for monitoring the employees throughout their shifts. Employees in the retailing industry in the United States account for about 48% of the revenue losses incurred by their employers, and this is quite worrying because the associated losses are passed to the consumers through price increments to recover the shrinkage. This paper looks into employee theft as reported in the referenced articles, with a close focus on linking the information with the concepts reviewed in the course.
Main issues Regarding Managing Employee Theft
The primary issue highlighted in the articles is the fact that there has been a prevailing issue of employee theft in the retailing industry. Employers are aware that there are various months when their sales increase tremendously, but this period is also associated with the highest shrinkage levels. Employee theft is seen through stealing products and money, and this is mainly instigated as the employees interact with the consumers, as well as when they are on duty in the warehouses (Eidelson and Soper).
Employees account for more than $18 billion loss for retailing companies annually (Fisher). Companies such as Amazon have realized that their employees are the main instigators of revenue loss, and they are looking for innovative ways to discourage the behavior because there is no available mechanism to monitor the employees to ensure that they do not steal.
The highlighted issue can be clearly understood by employing Frederick Herzberg’s model of motivation. The theory reveals that enhancing the level of satisfiers in the workplace results in an increased level of positive behavior among the employees. Dissatisfied employees are bound to engage in defiant behavior in the quest of gaining the attention of their employers or filling the voids caused by the dissatisfying elements. In this case, employees who engage in theft at the workplace might require better compensation and benefits to satisfy their financial needs.
The concept also relates to Professor Elton Mayo’s human relations theory, which provides a clear guideline of the need for employers to develop a relationship that facilitates mutual needs for the members of the organization. Employees are major stakeholders in the retailing industry, and as their employers marvel in huge margins, it would only be ethical for the employees to access better payment. This would ultimately eliminate the temptation to steal from the employer.
Additionally, the approaches used by companies like Amazon to manage theft are derived from the application of the behavioral theory of negative reinforcement (Eidelson and Soper). Providing screens at the workplace that highlight the names of employees involved in thefts in the company is an innovative way of enforcing mechanisms to discourage theft. However, it is not as effective as the company desires because despite the workers being acquainted with the consequences of theft, the company still loses products and money through employee-instigated thefts.
Impact on Stakeholders
The primary stakeholder affected by employee theft is the employer. Companies in the retailing industry have been recording heavy losses of money and products. The resultant shrinkage jeopardizes the performance of the organizations, and since competition is high in the industry, the affected companies might experience a reduction in their competitive power. Shrinkage also reduces the willingness for investors to continue investing in the affected organization’s stock.
However, since companies in the retailing market have the freedom to pass their losses to the consumers, most of the entities have adopted the strategy of increasing prices of various commodities to cover up for the losses. This implies that the consumers are the only stakeholders that cushion the financial losses associated with employee theft. The average cost per household in the United States is $403 annually, which goes toward covering for the lost merchandise and cash from the retailers (Fisher).
How I would Manage Theft
Managing theft in the workplace is not an easy task because it requires behavioral changes, as well as motivational programs to ensure that the employees are adequately provided with financial wellness. I would use the organizational culture as a major tool for behavioral change among the employees. A culture associated with openness and a sense of belonging to the organization would foster the commitment to assuming honesty on the part of the human assets (Gregory). I would also utilize negative reinforcement to ensure that fear comes to play in compelling the employees to refrain from adopting the vice.
Companies in the retailing industry need to devise effective ways of dealing with theft among the employees. A good start would be satisfying the financial needs of the employees. Taking the appropriate legal measures against employees involved in theft would also foster a higher level of adherence to responsible behavior on the part of the culprits.
Eidelson, Josh, and Spencer Soper. “Amazon’s Story Time Is Kind of a Bummer.”Bloomberg.com, Bloomberg. 2016, Web.
Fisher, Anne. “U.S. Retail Workers Are No. 1…in Employee Theft.” Fortune. 2015, Web.
Gregory, Jennifer Goforth. “6 Tips to Reduce Employee Theft.” Entrepreneur. 2013, Web.