Low Employee Morale: It Can Haunt Employers

September 28, 2021

Halloween pop-up stores are everywhere at this time of year. It’s peak season for people to pick out costumes and put up creepy decorations. While employees report that working in a Halloween store can be fun, they also say it can be seriously scary—and not because of the store’s décor. Those problems for employees can lead to big problems for employers. Insider magazine interviewed employees at Halloween stores and heard the following:

“… Unfortunately, the schedule expectations were absolutely insane. Shifts could last anywhere from four to 12 hours and your hours varied from four to 48 hours, weekly. The manager reserved the right to change shifts without warning. You were expected to constantly check the scheduling app because at any time, including with less than an hour’s notice, the manager could shorten, lengthen, push back, push forward, remove, or add a shift on your schedule.”

“You also have very little loyalty because no one really cares about a job they won’t have in a couple of months.”

“[There was a lot of] theft by employees and customers … [I encountered] the worst retail customers I’ve ever experienced. I don’t know what it is, but people have no respect for these pop-up stores.”

On the flip side, employers have their share of trouble too:

“I ran a Halloween store many years ago and while you might think it would be fun, it really isn’t… Plus, probably one-third to one-half of your employees just don’t show up for their shift. Because they know it’s temporary, employees figure they don’t have to show up when they don’t want to.”

“Customers are terrible. They rip up your store and leave costume parts all over the place. They steal and make massive messes …”

While a temporary store may face different issues than a permanent store, the statements from these employees and employers highlight the importance of high employee morale as a deterrent to employee theft. Forbes magazine defines employee morale as “…the attitude, satisfaction, and overall outlook of employees during their association with an organization or a business.”

Prevalence of Employee Theft

In March 2021, the U.S. Chamber of Commerce estimated that 75% of employees steal at least once. Employees can steal from their employers in multiple ways—from time theft to inventory theft.

Time Theft

  •  The American Society of Employers estimates that 20% of every dollar earned by a U.S. company is lost to employee time theft. Time theft is when an employee gets paid for time they didn’t work—and an estimated 43% of hourly workers said they exaggerated the amount of time       worked on their shifts. They may falsify time cards, take unauthorized or extended breaks, or take constant phone calls or use social media. A report by Udemy.com found that 62% of people  surveyed spent at least an hour of the workday looking at their phones.

Inventory Theft

  • Inventory theft occurs when an employee steals merchandise, cash, supplies, or food while on the job. It may occur much like shoplifting: the employee conceals merchandise in their pocket, purse, or bag in order to remove it from the store. The National Retail Federation estimated that theft and fraud cost retailers $62 billion in 2019.

Causes of Theft

While employee theft has multiple root causes, low employee morale is one of them.

“Generally, people like to think of themselves as basically good, and so they need to have some justification for the crime that allows them to preserve their self-image,” said Art Markman, professor of psychology and marketing at the University of Texas at Austin. “One way to do that is to see the company as doing wrong to them in some way. If they feel poorly treated at work or underpaid, then they can justify the crime as a way of balancing the scales.”

Employees who have bad experiences—either with management or rude customers—may feel justified in stealing, especially if there is little chance of being caught. If one employee witnesses another employee stealing, and getting away with it, that employee may also steal. Companies also may seem like abstract entities, so the theft feels like a victimless crime. This is especially true with temporary jobs, where there is little opportunity to build up employee loyalty. The quotes from the Halloween store employees display several red flags as far as employee morale.

Management Tips

Workplace experts offer these suggestions for preventing theft:

  • Check employee history prior to hiring. Watch for absenteeism and poor performance evaluations.
  • Observe and praise employees at work.
  • Talk with employees—at staff meetings, by email and through printed postings—about theft and the employer’s position on it. Make the consequences of employee theft clear.
  • Give specific examples of how stealing is wrong, even when taking small items. Appeal to workers’ self-image; people typically want others to view them well.
  • Engage employees by asking them to report any stealing they witness either to a supervisor or through an anonymous channel. Discourage them from taking matters into their own hands, such as by using their phones for surveillance, which may be illegal or against company policy.
  • Boost employee morale by recognizing and rewarding employees who are performing well.

As a forensic accounting firm, SDC CPAS is in the business of helping to analyze losses due to employee theft. SDC notes that while employers can’t be sure of preventing employee theft entirely, they can take steps to mitigate losses. Although tailoring the above tips to a specific business (such as a temporary Halloween storefront) may pose certain challenges, it is well worth an employer’s time to consider implementing such controls and to keep an eye on employee morale.

 

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