I/O psychology in Workplace: A Case Study of Employee Termination

This article studies a case of employee discharge at Wilton Petroleum Company, a wholesale distributor of a major brand of gasoline. The discharged employee, Lew Taylor, was a truck driver to deliver gasoline to gas stations. Knowing the residue gasoline left in the 20-foot hose was not monitored by the meter, Taylor started to collect about 3 gallons of gasoline from the hose each time after delivery. But the company knew this loophole and realized Taylor was stealing gasoline based on accumulative records. However, instead of investigating suspected theft, the operations manager Michael Morris tricked Taylor into a similar misconduct. Morris placed a company hammer on a chair in drivers’ locker room, and drilled a small hole in the wall to watch Taylor walked out with the hammer under his jacket. As Morris plotted, security officers stopped Taylor and led him to Morris’ office. Taylor was immediately fired for stealing a company tool worth about ten dollars. In this article, both Taylor’s misconduct and Morris’ behavior are analyzed, and the effect of Taylor’s termination is discussed.

Termination for Misconduct

A corporation must enforce rules and moral standards in workplace where employees are expected to work and behave in an honest manner. Theft is a serious misconduct which may lead to criminal charges. No matter what Taylor had stolen, either gasoline worth a hundred dollars or merely a ten-dollar hammer, his behavior was wrong and unacceptable. The company made a rational decision on Taylor’s dismissal. According to Gómez-Mejía, Balkin, and Cardy (2012), sometimes “employees engage in serious misconduct, such as theft or dishonesty, which may result in immediate termination” (p. 205). Studies have shown that a severe punishment on employee theft deters other employees from doing the same. When an organization fires a worker who commits theft, it not only gets rid of the dishonest employee, but also warns other tempted workers that theft is not tolerated and it will lead to termination (Appelbaum, Cottin, Paré, & Shapiro, 2006).

Employee theft is defined as “any unauthorized appropriation of company property by employees either for one’s own use or for sale to another” (Greenberg as cited in Appelbaum, Cottin, Paré, & Shapiro, 2006, p. 175). According to Iboro (2011), theft may be stimulated by employment conditions and work environments which perceived by the employee as unfair or inequitable. Employee’s perception of “the presence of aesthetics, wealth and technological sophistication in workplace may be capable of stimulating some anxious arousal, (intension) in an individual towards the acquisition of some of the stimulus-value objects that make up such environment” (p. 510). When such motivations cannot be responded to through socially-acceptable and appropriate procedures, the employee may feel unfair, and such emotion and perception could lead to an action of stealing. In this case, Taylor’s theft of gasoline might be stimulated by a perception of affluence. When Taylor drove the truck carrying 9,000 gallons of gasoline, he must be impressed by the abundance of the company’s gasoline resources. As Iboro (2011) mentioned, when individuals are exposed to affluence and abundance, “they become more inclined to behave unethically” (p. 514). Psychological studies have shown that affluent work environment could evoke feelings of envy towards the sources of wealth, and this associated envy then motivates behaviors intended to redress such inequities, which can translate into unethical behavior.

Ethical Concerns on the Company's Action

When the company speculated Taylor’s gasoline theft, it should launch an investigation. Morris’ approach was indecent and unethical because it involved inappropriate surveillance which violated employees’ privacy. Employers are constrained by elements of labor law to protect employees’ privacy (Sanders, Ross, & Pattison, 2013). Employee surveillance, if implemented in workplace, must respect the privacy of human body, social relations, and personal space; there should also be implications of disclosure for the surveillance (Ball, 2010). Morris’ conduct, drilling a hole in the wall to watch employee’s behavior in the changing room, without employees’ consents, was unprofessional and unacceptable. Morris’ behavior, in different ways, was as unethical as Taylor’s theft.

What Morris had done may bring the company with legal challenges for violating federal and state laws. With increasing concerns of privacy at work, many states have set strict laws to protect employees’ rights against excessive monitoring. For example, California Constitution explicitly protects the privacy of both private and public employees. According to Ciocchetti (2011), California had passed legislation that “prohibits employers from creating audio or video recordings of employees in locker rooms, restrooms, or any other room designated by an employer for changing clothes, unless authorized by court order” (p. 298). Morris’ unauthorized peek at the locker room was much worse than consented audio/video monitoring. Although his trick let him easily dismiss a stealer, it may also make himself terminated.

Effect of Taylor's Termination on Other Employees

Taylor's termination could have an effect on other employees in both positive and negative ways. Taylor’s termination confirmed the company’s anti-theft policy. It was a wake-up call for employees to reflect self-discipline. Employees may feel safe at workplace by knowing that the company would not tolerate dishonest behavior. If the company had not clearly defined such policy, it could be a good time to promulgate rules and standards regarding workplace misconducts.

On the other hand, employees could realize that they were closely monitored for their behaviors at work. Organizations watch employees primarily to protect their assets, but “workplace surveillance has consequences for employees, affecting employee well-being, work culture, productivity, creativity and motivation” (Ball, 2010, p. 87). To other employees, the fact that Taylor was caught for picking up a company hammer in the changing room indicated that the company kept an eye on them everywhere in the workplace, thus they could feel untrusted and uneasy. Therefore, the way Taylor was handled could emotionally impair employees’ motivation and hinder their productivity, and it could even encourage other misconducts in workplace.

In addition, employees might ask what type of surveillance had been used to catch the theft, and why there was no consent or disclosure for surveillance. In this case, it could be difficult for the company to explain the details because Morris’ action was not likely authorized by the executive management. Thus employees’ concerns for privacy could elicit legal actions. Therefore, the negative effect could be not only decreased productivity but also potential legal challenge from employees.

Alternatives to Dismissal

No employee is perfect in personality and behavior. Both employees and managers make mistakes at work and in their lives. Therefore a company should evaluate all aspects of an employee’s behavior and performance when make important decisions. If Taylor had been a conscientious employee in all other areas, the company may alternatively give him an opportunity to correct his mistake. Therefore instead of investigating Taylor’s theft, Morris may send all employees a memorandum to explain the loophole of metering system, and clarify that the residue gasoline in the hose is counted as the company’s asset. Morris may also talk to Taylor personally to bring up the concern of consistent shortage of small amount of gasoline in record. Taylor could most likely stop collecting residue gasoline from the hose if he became aware of the management’s intention to saving him.

Rather than catching and firing bad employees, it is more important for an organization to build an ethical workforce and prevent immoral behavior in workplace. Employer and the management team should clearly communicate with employees about company policy regarding misconducts and disciplines. A corporation should treat employees fairly and respectfully. It can be very helpful for employers to hire I/O psychologists for training employees about workplace ethics.


In this case, employee Taylor stole both expensive gasoline and a cheap hammer, and he was fired for the cheap one. But what he stole made little difference on his unethical behavior. Even if he stole only the ten-dollar hammer, such action could still violate the company’s anti-theft policy and result in job termination. In other words, it was a legitimate decision by the company to fire Taylor who was fully responsible for the consequence of his wrong behavior.

However, Taylor was only partial story of the case. Morris’ action toward Taylor complicated this case by raising both moral issues and legal risks for the company. Morris conducted surveillance which invaded employee’s privacy thus it might be illegal. Such surveillance was unnecessary because the company could investigate and convict Taylor’s theft by a professional approach. In this case, Taylor was indeed a victim of Morris’ entrapment, but the mistreatment should not compensate Taylor’s misconduct.

While Taylor’s discharge may show a mixed effect on other employees, the author of this article believes that the effect has been more negative in general because Taylor’s dismissal was not a result of appropriate investigation and clear evidence. In fact, Morris made the case of termination based on his invasion of employee’s privacy, which could be illegal and result in lawsuits. Morris’ action could cause more damage to the company than Taylor’s theft thus Morris should be disciplined as well.

In summary, Theft is a serious misconduct which often leads to dismissal. Taylor got what was coming to him even though he might be a victim of misconduct of Morris the manager. Morris’s action violated employees’ privacy thus could bring up legal risks to the company. Many social and environmental factors may stimulate workers’ unethical behavior, thus the company should focus on preventing workplace misconduct through communication and training on company policies and moral standards. Instead of termination for misconduct, the company may choose to help an employee correct the mistake by education and discipline.


Appelbaum, S. H., Cottin, J., Paré, R., & Shapiro, B. T. (2006). Employee theft: From behavioural causation and prevention to managerial detection and remedies. Journal of American Academy of Business, Cambridge, 9(2), 175-182.

Ball, K. (2010). Workplace surveillance: An overview. Labor History, 51(1), 87-106. doi:10.1080/00236561003654776

Ciocchetti, C. A. (2011). The eavesdropping employer: A twenty-first century framework for employee monitoring. American Business Law Journal, 48(2), 285–369.

Gómez-Mejía, L. R., Balkin, D. B., & Cardy, R. L. (2012). Managing human resources (7th ed.). Upper Saddle River, NJ: Pearson.

Iboro, F. A. (2011). Perceived psycho-emotional influence of aesthetics, affluence and environmental sophistication on employees’ theft behaviours in the workplace. IFE PsychologIA, 19(1), 507-528.

Sanders, D., Ross, J., & Pattison, P. (2013). Electronic snoops, spies, and supervisory surveillance in the workplace. Southern Law Journal, 23(1), 1-27.

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