Modeling employees' deviant behavior and employers' reactions: an interdisciplinary approach using principal-agent and prospect theories


  • Aharon Tziner Schools of Behavioral Sciences & Business Administration, Netanya University College
  • Erich C. Fein School of Management, University of South Australia, Australia



In this paper we introduce mathematical models to address deviant behavior theory and practice. We examine only employee behaviors and employer reactions, but this framework is innovative and parsimonious, in that it models employer responses to employee’s behavioral deviance based on the dual application of principal-agent theory and prospect theory. After explaining the model, we examine boundary conditions and limitations and propose a series of applications to illustrate the potential usefulness of the model.

Author Biographies

Aharon Tziner, Schools of Behavioral Sciences & Business Administration, Netanya University College

AHARON TZINER (Ph.D., Labor Studies, Tel Aviv University) is Full Professor of Management, former Dean of the School of Business Administration, present Dean of the School of Behavioral Sciences, and Vice-rector for Research at Netanya Academic College. He has published 84 refereed articles, three book chapters, and five books in the area of staffing organizations, performance appraisal, work adjustment, structure and performance of groups in organizations, and the financial value of human resource management programs and organizational behavior. He has served as an editorial memberof the Journal of Organizational Behavior and Human Resource Management Review and currently is on the editorial boards of Academy of Management Learning and Education, Economic Amphitheatre Journal (Romania), Review of Work and Organizational Psychology (Spain), Canadian Journal of Administrative Sciences and IJMSIT. He is a member of the Academy of Management, APA, IPA, and SIOP. He has been associated with the University of Montreal, the City University of New York, Tel-Aviv University and Bar-Ilan University. He has also held visiting appointments with the State University of New York (at Albany), the University of Minnesota, and Ben-Gurion University.

Erich C. Fein, School of Management, University of South Australia, Australia

ERICH C. FEIN is a lecturer and Program Director at the Centre for Human Resource Management in the School of Management, Division of Business at the University of South Australia. Erich served as an intelligence officer and survival instructor in the US military. He received his Ph.D. in industrial/organizational psychology from the Ohio State University. His research focuses on performance management, personnel selection, leadership development, and managerial ethics. His publications have appeared in the International Journal of Selection and Assessment, Research in Personnel and Human Resources Management, and the Journal of Management Development.


Berry, C.M., Ones, D.S. and Sackett, P.R. (2007) Interpersonal deviance, organizational deviance, and their common correlates: a review and meta-analysis, Journal of Applied Psychology, 92, 410-424.

Bodankin, M. and Tziner, A. (2009) Constructive deviance, destructive deviance and personality: how do they interrelate?, Amfiteatru Economic Journal, 11, 549-564.

Coffin, B. (2003) Breaking the silence on white collar crime, Risk Management, 50, 8.

Cohen-Charagh, Y. and Mueller, D. (2007) Does perceived unfairness exacerbate or mitigate interpersonal counterproductive work behaviors?, Journal of Psychology, 92, 666-680.

Currall,S.C., Towler, A.J., Judge,T.A. and Kohn,L. (2005) Pay satisfaction and organizational outcomes, Pesonnel Psychology, 58, 613-640.

Devers, C.E., Wiseman, R.M. and Holmes, R.M.J. (2007) The effects of endowment and loss aversion in managerial stock option valuation, Academy of Management Journal, 50, 191-208.

Dilchert, S., Ones, D.R.D. and Rostow, J.D. (2007) Cognitive ability predicts objectively measured counterproductive work behaviors, Journal of Applied Psychology, 92, 616-627.

Fama, E.F. (1980) Agency problems and the theory of the firm, Journal of Political Economy, 88(2), 288-307.

Fine, S. (2012) Estimating the economic impact of personnel selection tools on counterproductive work behaviors, Economics and Business Letters, 1(4), 1-9.

Griffin, R.W., O'Leary, A.M. and Collins, J. (1998) Dysfunctional work behaviors in organizations, in Cooper, C.L. and Rousseau, D.M. (eds.) Trends in Organizational Behavior, 65-82, New York, NY: John Wiley & Sons.

Jensen, M.C. and Meckling W.H. (1976) Theory of the firm: managerial behavior, agency costs and ownership structure, Journal of Financial Economics, 3, 305-360.

Kahneman, D. and Tversky, A. (1979) Prospect theory: an analysis of decision under risk, Econometrica, 47, 263-291.

O'Leary-Kelly, A.M., Griffin, R.W. and Glew, D.J. (1996) Organization-motivated aggression: a research framework, Academy of Management Review, 21, 225-253.

Robinson, S.L. and Bennett, R.B. (1995) A typology of deviant workplace behaviors: a multi-dimensional scaling study, Academy of Management Journal, 38, 555-572.

Tversky, A. and Kahneman, D. (1992) Advances in prospect theory: cumulative representation of uncertainty, Journal of Risk Uncertainty, 5, 297-323.

Vardi, Y. and Weitz. E. (2002) Using reasoned action theory to predict organizational misbehavior, Psychological Reports, 91, 1027-1040.

Vardi, Y. and Weitz. E. (2004) Misbehavior in organizations: theory, research and management, Mahwah, NJ: LEA, Publishers.

Vardi, Y. and Wiener, Y. (1996) Misbehavior in organizations: a motivational framework, Organization Science, 7, 151-165.




How to Cite

Tziner, A., & Fein, E. C. (2012). Modeling employees’ deviant behavior and employers’ reactions: an interdisciplinary approach using principal-agent and prospect theories. Economics and Business Letters, 1(4), 10–20.