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  • 2014
  • Working Paper
  • HBS Working Paper Series

Cleaning House: The Impact of Information Technology on Employee Corruption and Performance

By: Lamar Pierce, Daniel Snow and Andrew McAfee
  • Format:Print
  • | Language:English
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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

Management Practices and Processes; Information Technology; Ethics; Performance Productivity; Employees

Citation

Pierce, Lamar, Daniel Snow, and Andrew McAfee. "Cleaning House: The Impact of Information Technology on Employee Corruption and Performance." MIT Sloan Research Paper, No. 5029-13, October 2014.
  • SSRN

More from the Authors

    • March 2020 (Revised November 2020)
    • Faculty Research

    Maritz Automotive

    By: Brian Hall, Lamar Pierce and Ashley V. Whillans
    • November 2015
    • Harvard Business Review

    The Prius Approach: How Hybrid Technologies Help Companies Survive Disruption and Shape the Future

    By: Nathan Furr and Daniel Snow
    • 2012
    • Faculty Research

    Dirty Spoons: Restaurant Employee Corruption

    By: Daniel Snow
More from the Authors
  • Maritz Automotive By: Brian Hall, Lamar Pierce and Ashley V. Whillans
  • The Prius Approach: How Hybrid Technologies Help Companies Survive Disruption and Shape the Future By: Nathan Furr and Daniel Snow
  • Dirty Spoons: Restaurant Employee Corruption By: Daniel Snow
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