The Service Conspiracy Uncovered – Supervisors‘ Influence on their Employees’ Customer Sweethearting Behavior

The term sweethearting describes an unauthorized mutual act between two people where one person provides certain advantages to his or her conspirator and thereby harms his or her employer. Customer sweethearting, an unauthorized behavior of frontline workers, which is characterized by giving away free or discounted goods and services to conspirator customers, represents one of the most common types of employee theft. In the U.S. retail sector, customer sweethearting is responsible for losses of about $ 400 Billion per year. Because of its conspiratorial characteristics customer sweethearting is hard to detect. Thus, many firms use costly surveillance systems like closed-circuit television systems, software that discloses sweethearting, or hire security guards to check customers’ receipts at the exit of the store to detect customer sweethearting. Facing these issues, it is of high interest for both academia and practice to understand how customer sweethearting can be reduced without the use of surveillance systems that negatively influence employees’ satisfaction with work and their long-term motivation.

Since previous studies focused mainly on factors concerning the employee, we aim at investigating the influence of the supervisor on sweethearting behavior of frontline service employees.

In a first study, we examined the general effect of the supervisors’ leadership behavior on employees’ customer sweethearting behavior. We surveyed frontline employees in a cross sectional study design and found, that employees tend to imitate their supervisors’ behavior, i.e. if supervisors sweetheart their employees, the employees are more likely to practice customer sweethearting. However, we also found that when supervisor and employee have a high-quality relationship, the employee is more likely to refrain from sweethearting his or her customers. These findings indicate, that if supervisors maintain a positive relationship with their employees and waive using questionable methods such as employee sweethearting, they can reduce their employees’ customer sweethearting behavior.

In a second study, we conducted a scenario-based experiment in a restaurant setting, in which we manipulated the employee’s relationship with his or her fictional supervisor and additionally the supervisor’s employee sweethearting behavior in order to better understand the interaction effect of these two characteristics on explaining employees’ customer sweethearting behavior.