Combating Counterproductivity and Employee Theft

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Employee counterproductivity and theft is an unholy couple that cost U.S. businesses billions of dollars each year. Both, however, are sometimes viewed as problematic only after a certain degree of abuse. A stapler taken home, a game of solitaire when it’s slow — those aren’t so bad, right? It all depends on how you look at it.

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A recent national survey found that employees waste an average of 2.2 hours each workday, not including lunch. So over the course of every month, an employee spends over one week not working! A conversation about American Idol around the water cooler, a personal phone call, searching Google for the perfect gift — could it really cost that much? The cost to employers nationwide is around $651 billion per year.
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2 l0 y5 z/ \+ B& X1 `/ FOn the darker side of workplace behavior is employee theft. Reports differ as to how much theft costs U.S. companies, but it’s somewhere between $60 billion and $100 billion per year. Amazingly, retailers lose more merchandise and money to employee theft than they do to shoplifting. Boiled down to a per company rate, you can estimate that you’ll lose roughly two percent of your yearly revenue to employee theft.

The insidious thing about employee counter productivity and theft is neither occurs when the boss is watching. Short of being a fly on the wall of the cubicle jungle, employers are often hard-pressed to know the extent of what’s going on in their own workplaces.

2 h: u% ]2 c' G/ t/ {Oftentimes, co-workers report the misbehavior of their peers. But not as often as you’d think. A recent survey by Express Personnel Services, based in Oklahoma City, polled 1,000 working adults to get their thoughts on employee theft. The survey found that in cases of massive corporate theft, most people said they would turn in the people involved. But the likelihood of an employee blowing the whistle on dishonesty drops by about ten percent if he or she knows the perpetrator, or if the revelation might have negative consequences for the whistle-blower.
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% w9 {8 y+ N. P5 j71 percent of employees will report a theft of $1,000; 86 percent will report a theft of $100,000, and 90 percent will report a theft of $1-million or more. Some 79 percent of employees “definitely would” blow the whistle on an accountant and 83 percent would expose a co-worker or a manager to whom they report, but 85 percent would expose a CEO.

! Q" `' W( ~1 Y1 x0 e& F" v# P- gThose are high percentages, to be sure, but look at the other side of that coin. If 71 percent of employees would report a petty theft that means almost 30 percent wouldn’t. How do you know you’re hiring someone in that honest 71 percent?
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What Employers Can Do
( `2 c6 P$ Q  ^4 K4 M; aThe best way to combat employee theft and counterproductivity is to hire honest, productive, ethical people in the first place. But, it’s difficult to assess honesty via an interview. Not many applicants are going to divulge how much time they spent playing solitaire at their previous job or how many rolls of tape they took home from the supply closet.

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With a background check, you might find out whether your potential new hire has ever been convicted of a crime, and that’s valuable information. In about five percent of cases prospective employers find that a job applicant has been convicted of a job related crime. However, research in the area of workplace behavior indicates that 20-25% of employees engage in some form of theft and even more in other forms of counterproductivity. As a result, criminal background checks should certainly be supplemented with other means of evaluating prospective employees.
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$ P( r6 N; j: c% x5 N9 D2 bOne of the best ways to help ensure you’re hiring honest, ethical, conscientious employees is to use pre-employment reliability testing. Tests like the Wonderlic Productivity Index (WPI) help assess and predict whether applicants will be productive employees. Doing all that you can to ensure your staff is made up of ethical, responsible people isn’t just the right thing to do, it’s a necessity.

“It’s all about conscientiousness,” explains Dr. David Arnold, General Counsel for Wonderlic, Inc. “Are these people going to show up for work on time? Will they be productive members of the team once they’re hired? These things can be hard to discern from an interview. That’s what we test for with the WPI.”

The WPI is a good predictor of workplace counterproductivity. It helps assess an individual’s willingness to perform productively and cooperatively on the job, and avoid engaging in counterproductive behavior.

How useful are these tests? A 1993 study titled “Comprehensive Meta-Analysis of Integrity Test Validities” concluded: Evaluating nearly 600,000 test takers, researchers found that “results indicate that integrity test validities are substantial for predicting job performance and counterproductive behaviors on the job, such as theft, disciplinary problems and absenteeism.”

. `$ ^7 p9 A# n. J, mOther benefits:
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Tests can be conducted via phone and the Internet, as well as in the office.
They are a highly accurate means of screening prospective employees.
Tests are relatively inexpensive (around $10) and have been proven to have a high ROI.
Tests are non-discriminatory and typically aren’t challenged by applicants.
  D! t# j# ^6 i6 q6 fCindy Purdy, Human Resources and Office Manager for Kramer Beverage, based in Hammonton, New Jersey, doesn’t need national statistics to recognize the value of testing employees before they’re hired. She’s been using the WPI for more than a year.
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7 Z+ y, M6 F" M8 l7 g& f“The WPI tells me what candidates’ work habits are going to be — and that’s important because it’s something you really can’t discern in an interview,” she says. “It tells me who is going to be chatting on the phone or by the water cooler, who is going to be playing solitaire on their computer instead of working, and who is going to look for another job in six months.”

! Q$ i0 X. b* B4 y" F! F5 wSuch employee behavior would make Purdy’s job more difficult, because of the additional training, supervision and possibly re-hiring that must be done. “If candidates score in the ‘red zone’ on the WPI, I won’t hire them, period,” she says. “The amazing thing is people can have a great resumé, interview beautifully, but then do poorly on the WPI. Then I know: This person is great at interviewing, but will potentially be a problem employee.”