Monitoring Matters

In a surprising development (to no one familiar with auditing or internal controls), it turns out that monitoring can actually make a difference in the way people behave!

Actually, a field study focused on monitoring and described in the NYT provides some interesting insights. While it isn't really surprising that monitoring focused on deterring theft actually deterred theft, what is less expected is that anti-theft monitoring actually increased productive efforts by employees. From the NYT article:

The savings from the theft alerts themselves were modest, $108 a week per restaurant. However, after installing the monitoring software, the revenue per restaurant increased by an average of $2,982 a week, or about 7 percent.

The impact, the researchers say, came not from firing workers engaged in theft, but mostly from their changed behavior. Knowing they were being monitored, the servers not only pulled back on any unethical practices, but also channeled their efforts into, say, prompting customers to have that dessert or a second beer, raising revenue for the restaurant and tips for themselves.

“The same people who are stealing from you can be set up to succeed,” said Mr. Pierce of Washington University.