University / Organisation : University of Zurich/University of Cologne

Paper or project ? paper

Title : How to prevent employee theft? Field-experimental evidence

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Abstract : Employee theft is a pervasive issue that imposes significant financial and cultural costs on firms and society. This study evaluates an intervention aimed at reducing employee theft through a field experiment conducted in collaboration with a large restaurant chain in Germany. The intervention involves implementing the "Four-Eye Principle," which requires collaboration across work areas to carry out theft. Using a randomized controlled trial, the results show that the Four-Eye Principle significantly increases recorded sales, leading to a profit gain of over 1% of annual revenue. These findings suggest that strategic peer monitoring can effectively mitigate theft with minimal disruption to operational workflows. The study highlights the importance of organizational design in addressing workplace misconduct and offers several implications.