How Surveillance Changes Behavior: A Restaurant Workers Case Study

Surveillance is certainly much in the news lately.

Most notably, of course, there is the continuing outcry over the National Security Agency’s call-tracking program, disclosed in the documents leaked by Edward Snowden.

But surveillance even surfaced as a subject in last week’s televised debate among the Democratic candidates for mayor in New York. The office seekers were asked whether New York City should have more surveillance cameras. Six of the seven, card-carrying liberals all, replied without hesitation, yes. (Only Anthony Weiner said no.)

Most of the public discussion of surveillance technology and its use revolves around the question: Is it spooky or reassuring?

But another issue is the effect of surveillance on behavior. And a new research paper, published on Saturday, shows in detail how significant the surveillance effect can be.

The paper, “Cleaning House: The Impact of Information Technology Monitoring on Employee Theft and Productivity,” is the work of three academics: Lamar Pierce, an associate professor at the Olin Business School at Washington University in St. Louis; Daniel Snow, an associate professor at the Marriott School at Brigham Young University; and Andrew McAfee, a research scientist at the Sloan School of Management at the Massachusetts Institute of Technology.

The researchers measured the impact of software that monitors employee-level theft and sales transactions, before and after the technology was installed, at 392 restaurants in 39 states. The restaurants were in five “casual dining” chains. The paper does not name the five, but it cites examples of the casual dining category including Applebee’s, Chili’s and Olive Garden.

Employee theft and fraud is a big problem, estimated at up to $200 billion a year across the economy. In the restaurant industry, analysts estimate the losses from employee theft at 1 percent of revenue. That does not seem like a lot, but restaurant profit margins are slender, typically 2 to 5 percent. So cutting down on theft can be an important contributor to a restaurant’s financial health.

Most of the restaurant industry pays its servers low wages and they depend on tips. Employee turnover is high. In that environment, a certain amount of theft has long been regarded as a normal part of the business.

Unethical behavior runs the gamut. There is even a how-to book on the subject, published in 2004, “How To Burn Down the House: The Infamous Waiter and Bartender’s Scam Bible by Two Bourbon Street Waiters.” A simple example is a bartender’s not charging for a round of drinks, and urging the customers to “take care of me” — with a large tip. Other tactics are more elaborate.

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