After learning about how to safeguard against the principle/agent problem, I thought back to two of my internships in which I was acting as an agent. At my first internship, I was working for my ex-girlfriend's Dad, and I slacked off frequently. I would play games on my phone, read the WSJ, and go on social media. Looking back, it is somewhat hard to believe I got away doing all this. But now, I realize why I was able to -- there were no safeguards to the principle/agent problem. My boss did not monitor me, the output was random/not well-defined or results based, there were no incentives in my contract (hourly pay), and being his daughter's boyfriend, I wasn't exactly replaceable. Sadly, my slacking was reigned in this past summer. I interned for a commercial bank where safeguards were erected. Specifically, my output was quantifiable, I reported to a manager, and alternates could be found easily. The only time I was able to slack was when I worked virtually, which I think has the potential to be a post-covid problem for many companies.
1 comment:
Hey Wilson, I found your blog post incredibly relevant to the topics discussed in class, as well as to each of our own personal struggles when it comes to being productive in low-incentive, poorly monitored environments. I think that you brought up an interesting point at the end of your post about how it may be easier to shirk in a remote-work setting. I agree that it may be more challenging to monitor employees when they are not working from a physical office, but I think that the companies who have defined incentives and quantifiable outputs won’t really see much struggle, if any. I think it becomes a thoughtful cost-benefit calculus: will we gain more from no longer financing physical workspaces than we will lose to shirking? If the answer is calculated to be yes, then it makes sense to go ahead and work remotely. Some studies have even suggested that in certain vocational fields, employees see higher productivity when working from home. I am NOT here to suggest that this is an unbiased statistic, nor am I here to claim that productivity goes up when you are comfortable in your own home. However, I do think that the ‘problem’ you alluded to might not be as big of a problem as we initially think. If those well-defined incentives and quantifiable outputs are in place, isn’t monitoring employees relatively similar regardless of the location the work comes from? Yes, you might take more bathroom breaks, or have Netflix open in another window, but if you are producing comparable output, then I think that businesses might be better off going virtual if they can save significant expenses for owning/renting the space that employees have to come and work at.
-Grayson
https://www.bloomberg.com/news/features/2021-08-26/will-remote-work-become-the-norm-hybrid-offices-are-transforming-economies
Here's an article that brings up some of the pros and cons if you are interested.
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