Making pay work, May 25th 2013 P70 (生産管理と士気、生産性)
Of all a firm's imputs, its workers' effort is perhaps the oddest. It is as vital as land, factories or machines, but much harder to control. It is often impossible even to measure. A manager can gauge the firm's output, but not the effort people put in, beyond crude gauges such as the time they spend on the job. Employees have the informational edge, knowing their own effort, output and skill level.This asymmentry makes it hard for managers to distinguish, for instance, between the low-skilled but diligent and the skilled but lazy. Monitering schemes reward hard-working employees and punish slackers can boost effort, but they can backfire badly, too. What should firms do? A good place to start is with the worst kind of behaviour：crime. In a paper published in 1968 Gary Becker, of the University of Chicago, set out the factors which policymakers should consider when deciding on what resources they should devote to detection. In his model criminal calculate the risks and benefits of bad behaviour, taking into account the possible monetary reward, the probability of being caught and the subsequent punishment. To cut crime authorities must increase the probability of being caught, the severity of the punishment, or both. This approach can also be applied to less extreme forms of bad behaviour, such as slow or sloppy work：firms may have to monitor individual workers, and then reward the good and punish the bad. But a system like this comes with costs. People do not work hard for money alone. They also have other motives, such as doing a good job. In a 1971 paper Edward Deci, of Rochester University, tested the effect that external rewards - cash bonuses or fines - have on such ゛intrinsic゛motivation. Two groups were given a 3D puzzle and asked to create a variety of shapes. Because the puzzle was fun and mentally taxing, intrinsic motivation was high. One group, left to proceed at its own pace, worked hard. A second group was monitered, and given a $1 reward for each shape that was successfully replicated. This payment was later withdrawn, with the result that the second group now put in less effort than the first. Its members switched off, turning instead to Playboy or the New Yorker. Monetary rewards, Mr Deci reasoned, had killed their intrinsic motivation. Watching workers closely can have other drawbacks. Setting up an incentive scheme for a particular task costs time and money. And it reveals something about the task：that it is important for a firm's success and considered difficult. In a 2003 study Roland Benabou, of Princeton University, and Jean Tirole, of Toulouse University, showed how this can lead employees to work more slowly. Efforts might simply shift from speed to accuracy. The effects of monitoring may be even worse if ゛reciprocity゛is taken into account. Matthew Rabin, of the University of California, Berkley, explored this concept in a paper in 1993. People with a strong sense of fairness like to help those whom they perceive as helpful. But the flip side is that they will punish those they see as being unhelpful. So a monopolist charging rip-off prices may be shunned, even if the shopper really wants the product. Similarly, an unfair boss may be punished with bad work, even if this hurts the workers too. If monitoring has both benefits and costs, what is the right level? Michele Belot, of Edinburgh University, and Marina Schroder, of Magdeburg University, have deviced a test. They gave volunteers boxes containing 780 euros ($1,010) in coins and asked them to separate these into different types. The job is trickier than it sounds, because the euro zone has 160 different types of coin：eight values, from one cent to 2 euro, in 20 designs, one for each of the zone's 17 members plus Monaco, San Marino and the Vatican. The task, for which volunteers were paid 20 euros, has some clever properties. First, it can be completed perfectly with effort but not much skill (time pressure was minimal and volunteers were allowed to take the boxes home). Second, bad work can be measured and comes in several forms. The coins could be badly sorted. The box could be returned late. And the coins might be stolen：the boxes contained Vatican coins which are worth more to collectors tha n their face value. By replace a 50-cent piece from the Vatican (worth around 3 euros in online auctions) with a regular 50-cent coin, the volunteer could net 2.50 euros. The researchers tested different configurations of monitoring and rewards. A control group was not supervised at all and paid immediately regardless of performance. Two other groups were watched, and rewarded according to their performance. The first scheme was pretty lax：workers lost just 1 euro every ten mistakes. The second was much harsher：the payment was cut by 15 euros if more than two coins were wrongly identified. The results suggest that lax monitering is a bad option：30% of volunteers made more than ten mistakes - worse than the group with no supervision………
