Which employee perception is associated with lower instances of employee fraud?

Trust in managerial ethical behavior is associated with lower instances of employee fraud because when employees believe that their managers act ethically, they are more likely to feel engaged and accountable in their roles. This trust fosters a culture of integrity within the organization, which discourages fraudulent behavior. Employees who see ethical behavior modeled by their leaders are more likely to emulate those values, creating a positive workplace environment where honesty is prioritized.

This perception also enhances the overall psychological contract between employees and the organization. When employees trust that their leaders are making ethical decisions, they feel a sense of loyalty and are less inclined to violate company norms for personal gain. An ethical leadership presence can also encourage open communication, making employees feel safe to express concerns or report unethical behavior, further reducing opportunities for fraud.

On the other hand, while other factors such as belief in company profitability, contentment with pay rates, and confidence in job security can positively influence employee morale, they do not have the same direct correlation with ethical behavior and fraud prevention as trust in managerial ethical behavior does. Trust specifically affects the integrity of interactions within the workplace and can serve as a crucial preventative measure against dishonest actions.