Monitoring, Motivation, and Management: The Determinants of Opportunistic Behavior in a Field Experiment

Economic models of incentives in employment relationships are based on a specific theory of motivation: employees are "rational cheaters," who anticipate the consequences of their actions and shirk when the marginal benefits exceed costs. We investigate the "rational cheater model" by observing how experimentally induced variation in monitoring of telephone call center employees influences opportunism. A significant fraction of employees behave as the "rational cheater model" predicts. A substantial proportion of employees, however, do not respond to manipulations in the monitoring rate. This heterogeneity is related to variation in employee assessments of their general treatment by the employer.

Policy implications

Greater monitoring can reduce work shirking from employees who fit with the rational cheater model, though monitoring costs could outweigh the benefits.

Additional information

Hypotheses/research question

Are employees rational cheaters? Given an incentive pay arrangement, if monitoring is reduced will this lead to an increase in shirking, and which individuals are most likely to engage in opportunistic behaviour?

Study design

Natural field experiment

A telephone marketing firm and its 16 geographically dispersed sites. Employees receive a base salary and a bonus for exceeding targets at all of these sites. Employees understand that some fraction of their calls are checked by audit. 4 sites were selected to have audit rates increased to 25% whereas, the rest were reduced from 10% to 5%. In order to keep the employees blinded to the experiment, a subsample was randomly drawn from the actual audits to be reported back to employees at the 4 sites with increased monitoring.

Cost benefit ratio

Not available.

Rounds of data collection

2: Baseline + weekly productivity data (over 74 total weeks, 14 of which were post-intervention)

Baseline data collection and method

Prior to the intervention, employees took a survey which collected data about employee perceptions concerning their job and their relationship with their employer, as well as demographic information. Weekly data were collected for all 16 sites for 60 weeks prior to the intervention. Variables include ratio of suspicious bad calls to good calls, audit rates, hours worked at each site each week, fraction of workers with eventual tenure, fraction of ours spent in outreach (making calls).

Data collection method and data collected

Weekly data were collected for all 16 sites throughout the duration of the experiment. Data was collected on all of the same variables contained in the baseline.

Unit of analysis

Individual

Stratification

Reference

Nagin, D. S., Rebitzer, J. B., Sanders, S., & Taylor, L. J., 2002. 'Monitoring, Motivation, and Management: The Determinants of Opportunistic Behavior in a Field Experiment'. The American Economic Review, vol. 92(4), pages 850-873.

Monitoring, Motivation, and Management: The Determinants of Opportunistic Behavior in a Field Experiment

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