Unethical Demand and Employee Turnover

47 Pages Posted: 5 May 2013  

Lamar Pierce

Washington University, Saint Louis - John M. Olin School of Business

Jason Snyder

University of California, Los Angeles (UCLA) - Anderson School of Management

Date Written: May 1, 2013

Abstract

This paper argues that consumer demand for unethical behavior such as fraud can impact employee turnover through market and psychological forces. Widespread conditions of unethical demand can improve career prospects for employees of unethical firms through higher income and stability associated with firm financial health. Similarly, unethical employees enjoy increased tenure from the financial and psychological rewards of prosocial behavior toward customers demanding corrupt or unethical behavior. We specifically examine the well-documented unethical demand for fraud in the vehicle emissions testing industry, and its impact on employee tenure. We use data from tests conducted by several thousand licensed inspectors to demonstrate that fraudulent employees and employees of fraudulent firms enjoy longer tenure. These results suggest further work to separate the multiple psychological and economic mechanisms likely driving our findings.

Keywords: Unethical Behavior, Fraud, Corruption, Prosocial Behavior, Ethics, Deviance, Person-Organization Fit

Suggested Citation

Pierce, Lamar and Snyder, Jason, Unethical Demand and Employee Turnover (May 1, 2013). Available at SSRN: https://ssrn.com/abstract=2260513 or http://dx.doi.org/10.2139/ssrn.2260513

Lamar Pierce (Contact Author)

Washington University, Saint Louis - John M. Olin School of Business ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
314-935-5205 (Phone)

Jason Snyder

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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