Cleaning House: The Impact of Information Technology Monitoring on Employee Theft and Productivity

52 Pages Posted: 1 Sep 2013 Last revised: 16 Oct 2014

See all articles by Lamar Pierce

Lamar Pierce

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

Daniel C. Snow

Brigham Young University - J. Willard and Alice S. Marriott School of Management

Andrew McAfee

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: October 15, 2014

Abstract

This paper examines how firm investments in technology-based employee monitoring impact both misconduct and productivity. We use unique and detailed theft and sales data from 392 restaurant locations from five firms that adopt a theft monitoring information technology (IT) product. We use difference-in-differences (DD) models with staggered adoption dates to estimate the treatment effect of IT monitoring on theft and productivity. We find significant treatment effects in reduced theft and improved productivity that appear to be primarily driven by changed worker behavior rather than worker turnover. We examine four mechanisms that may drive this productivity result: economic and cognitive multitasking, fairness-based motivation, and perceived increases of general oversight. The observed productivity results represent substantial financial benefits to both firms and the legitimate tip-based earnings of workers. Our results suggest that employee misconduct is not solely a function of individual differences in ethics or morality, but can also be influenced by managerial policies that can benefit both firms and employees.

Keywords: information technology, monitoring, misconduct, employee theft

Suggested Citation

Pierce, Lamar and Snow, Daniel C. and McAfee, Andrew, Cleaning House: The Impact of Information Technology Monitoring on Employee Theft and Productivity (October 15, 2014). MIT Sloan Research Paper No. 5029-13. Available at SSRN: https://ssrn.com/abstract=2318592 or http://dx.doi.org/10.2139/ssrn.2318592

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)

Daniel C. Snow

Brigham Young University - J. Willard and Alice S. Marriott School of Management ( email )

Provo, UT 84602
United States

Andrew McAfee

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States
6177154155 (Phone)

HOME PAGE: http://andrewmcafee.org

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