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The effectiveness of ef®ciency wage incentives is often jeopardized by perverse organizational corruption. We model organizational corruption as a phenomenon of social interaction and relate the substantial psychological role characterizing the social norm to the corruption problem. We ®nd that if the status quo bribery rate within the ®rm is high, social norms can no longer serve as a suf®cient sanction against a corrupt supervisor; pandemic organizational corruption tends to generate a critical mass effectÐthe snowball effectÐwhich intensi®es the corruption effect. This intensi®ed effect, due to the snowballing character of social norms, may more than offset the usual incentive effect of wages, resulting in more widespread shirking in the ®rm.