Abstract

http://ssrn.com/abstract=1475276
 
 

References (73)



 
 

Citations



 


 



Can Wages Buy Honesty? The Relationship Between Relative Wages and Employee Theft


Clara Xiaoling Chen


University of Illinois at Urbana-Champaign - Department of Accountancy

Tatiana Sandino


Harvard Business School - Accounting and Control

2012

Journal of Accounting Research 50(4), 2012: 967-1000

Abstract:     
In this study we examine whether, for a sample of retail chains, high levels of employee compensation can deter employee theft, an increasingly common type of fraudulent behavior. Specifically, we examine the extent to which relative wages (i.e., employee wages relative to the wages paid to comparable employees in competing stores) affect employee theft as measured by inventory shrinkage and cash shortage. Using two store-level datasets from the convenience store industry, we find that relative wages are negatively associated with employee theft after we control for each store’s employee characteristics, monitoring environment, and socio-economic environment. Moreover, we find that relatively higher wages also promote social norms such that coworkers are less (more) likely to collude to steal inventory from their company when relative wages are higher (lower). Our research contributes to an emerging literature in management control that explores the effect of efficiency wages on employee behavior and social norms.

Keywords: Wages, employee compensation, management control, employee theft, reciprocity, gift exchange, social norms, retail chains

JEL Classification: C93, M46

Accepted Paper Series





Not Available For Download

Date posted: September 18, 2009 ; Last revised: September 21, 2012

Suggested Citation

Chen, Clara Xiaoling and Sandino, Tatiana, Can Wages Buy Honesty? The Relationship Between Relative Wages and Employee Theft (2012). Journal of Accounting Research 50(4), 2012: 967-1000. Available at SSRN: http://ssrn.com/abstract=1475276 or http://dx.doi.org/10.2139/ssrn.1475276

Contact Information

Clara Xiaoling Chen
University of Illinois at Urbana-Champaign - Department of Accountancy ( email )
1206 South Sixth Street
Champaign, IL 61820
United States
Tatiana Sandino (Contact Author)
Harvard Business School - Accounting and Control ( email )
367 Morgan Hall
Soldiers Field
Boston, MA 02163
United States
617-495-0625 (Phone)
Feedback to SSRN


Paper statistics
Abstract Views: 1,827

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.265 seconds