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Optimal supervision intensity, collusion, and the organization of work

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Author Info
Mehmet Bac

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Abstract

The intensity of supervision, defined as the proportion of supervisors to bottom-rank productive workers, differs widely across organizations and nations. Analysing three monitoring systems that differ in their supervision intensity, I show that the possibility of collective shirking arrangements can impose a system-dependent limit on the range of implementable performances. This brings about a tradeoff in the choice of the monitoring system: the system that economizes on incentive costs may implement an inferior range of performances. Applications of the model generate work-disutility-, ethics- and job-characteristics-based explanations for variations in the intensity of supervision.

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File URL: http://economics.ca/cgi/xms?jab=v40n1/CJEv40n1p0317.pdf
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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 40 (2007)
Issue (Month): 1 (February)
Pages: 317-339
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Handle: RePEc:cje:issued:v:40:y:2007:i:1:p:317-339

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Find related papers by JEL classification:
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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This page was last updated on 2009-11-25.

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