Higher-paid retail workers are less likely to steal, according to a new survey appearing in the Journal of Accounting Research.

The study, authored by two accounting professors—Clara Xiaoling Chen of the University of Illinois and Tatiana Sandino of the University of Southern California—looked at workers in the convenience store industry, but the authors said that its results could also apply to other retailers. 

The researchers maintained that paying relatively higher wages discourages employee theft for two reasons. First, employees who receive higher wages are less inclined to commit theft because they wish to retain their well-paying jobs, or because they feel grateful to employers—what the authors call “positive reciprocity.” Second, firms that offer higher wages may attract a higher proportion of honest workers.

In addition, the study says that relatively higher wages promote social norms so coworkers were less likely to collude to steal inventory.

“The effect of relative wages on employee theft is more pronounced when there are multiple workers,” Chen said in a statement. “Relative wages influence the type of norms that develop among the coworkers. So in industries or businesses that use multiple workers to staff a store or a retail outlet, it’s even more beneficial to pay a wage premium.” 

If an employer can’t afford to pay higher wages, Chen said there are other ways to induce “positive reciprocity” among employees.

“You can show that you care about the workers, and you can find other ways outside of compensation to recognize their efforts,” she said in a statement. “Paying employees higher wages is not the only way to cultivate positive reciprocity, but it certainly is a good way to foster employee loyalty and honesty.” 

JCK has covered tips to combat internal theft.

Rob Bates

JCK News Director