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Financial Worries Drive Workplace Theft

Financial Worries Drive Workplace Theft
Financial insecurity may cause workers to lower their ethical standards. / Credit: Man stealing image via Shutterstock

Employees who suffered financially from the recent recession could be more prone to stealing and cheating in the workplace, new research suggests.

A study set to be published in the journal Organizational Behavior and Human Decision Processes found that when people feel financially deprived — as many did from losses suffered during the last market and banking meltdown — they are more likely to relax their moral standards and misbehave to improve their financial situation. Researchers said this could result in workplace sabotage and the theft of supplies and equipment.

"We found that most respondents did not think financial deprivation would lead them to behave immorally," said Nina Mažar, an associate professor of marketing at the University of Toronto's Rotman School of Management and one of the lead researchers of the study. "Yet, once they actually experienced financial deprivation, they were more likely to loosen their ethical principles."

Researchers also found that those who interpret or enforce policies or regulations as part of their work need to be mindful of the deprivation effect, too, since temporary upsets in their own financial position could lead them to go easier on others demonstrating unethical behavior while under financial stress.

While there are many ways people assess their financial health, the study discovered that one of the strongest is by comparing oneself to others; a sense of financial deprivation can happen when people simply feel financially inferior to their peers.
The study's authors found that perceptions of fairness were key to participants' decisions to act honestly or dishonestly. Mažar said this suggests that one reason why workplace theft is so common is because employees may see their own — and other colleagues' — financial positions as inferior and unfair when compared with the companies and executives for which they work.

The findings are based on a series of experiments that studied people's views about dishonest behavior, and how they behaved once they were induced to feel financially deprived themselves. The effects were observed both in experiments where people actually experienced financial loss and in those where they were merely made to feel financially deprived relative to others.
The researcher was co-authored by Dartmouth College's Eesha Sharma, New York University's Adam Alter and Dan Ariely of Duke University.

Originally published on BusinessNewsDaily.

Chad Brooks

Chad Brooks is a Chicago-based writer who has nearly 15 years' experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.