Abstract

Employee pilferage – the unauthorized taking of work property or the means of production on a relatively small scale – is extremely costly. However, very little is known about what psychologically drives frontline retail workers to pilfer. Drawing upon the social cognitive theory of self-regulation, we argue that moral disengagement is the key psychological mechanism that frees retail employees to pilfer in the workplace without experiencing feelings of guilt or self-censure. We further develop and test a conceptual framework that depicts the causes of pilferage moral disengagement by customer-contact retail employees. We find that both moral identity centrality and ethical leadership inhibit pilferage moral disengagement, while cynicism and pilferage norms enhance it. Moreover, moral identity centrality can also alleviate the positive effects of both cynicism and pilferage norms on pilferage moral disengagement. We discuss the theoretical implications of these findings and the implications for practice.

Introduction

Studies of ancient Egypt have found that tomb-makers literally risked their necks pilfering from their employers. Closer to home, just a few generations ago, pilfering a loaf of bread from an employer could find the perpetrator forcibly deported thousands of miles to a foreign continent. Today, contemporary studies suggest that employee pilferage costs retailers billions of dollars every day. As such, pilferage is a persistent and pervasive phenomenon. Employee pilferage is a salient issue, particularly in the retail sector. In the retail sector alone, the costs were recently estimated as $32 billion per year. A recent report showed that employee theft has been identified as the single biggest cause of loss to retailers in the US, more than customer theft (Retail Knowledge, 2015). A similar picture can be obtained in the UK, as it has been found that each employee theft costs four times that of customer theft (British Retail Consortium, 2015). Pilferage, particularly time theft, can potentially have a significant negative impact on the quality of customer service and the customer experience in the retailing environment.