Stop, Thief!

Like any kind of employee theft, embezzlement is the result of motivation combined with opportunity. In the past, experts advised business owners to limit the opportunities for embezzlement through the business's internal controls (more on this later). While this is still an important prevention method, paying attention to employees' possible motivations may be just as critical. "We previously believed embezzlers were most often motivated by a true financial need," Wells says. "Now we're finding that the most common factor in embezzlement is employee dissatisfaction."

Employees who turn to embezzlement are usually people with major morale problems. They see an increasing disparity between their work and the owner's work, between their compensation and the owner's compensation-and they consider embezzlement a way of evening out that disparity.

This article was originally published in the January 1996 print edition of Entrepreneur with the headline: Stop, Thief!.