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Overwhelmed by routine tasks: A multitasking principal agent perspective

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  • Demougin, Dominique
  • Helm, Carsten

Abstract

Employees often report being overloaded with routine tasks, which distracts them from more demanding and rewarding work. We analyze this in a multitasking model involving a verifiable routine task and a skill-dependent task characterized by moral hazard. Multitasking is costly so that high- and low-skilled employees specialize, and only employees with intermediate productivity handle both tasks. In the Nash bargaining solution of contract negotiations, work overload in the routine task is used to lower the informational rent from the non-verifiable task. Compared to the first-best solution, more employees perform both tasks and effort in the routine task is inefficiently large. Moreover, the payment structure is such that the employee would prefer to allocate more effort to the demanding task, which we interpret as a loss of control over work autonomy. Reducing employees' bargaining power exacerbates the problem, while the effects of improved monitoring are mixed.

Suggested Citation

  • Demougin, Dominique & Helm, Carsten, 2023. "Overwhelmed by routine tasks: A multitasking principal agent perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 654-669.
    • Handle: RePEc:eee:jeborg:v:216:y:2023:i:c:p:654-669
    DOI: 10.1016/j.jebo.2023.10.021
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    More about this item

    Keywords

    Multitasking; Work overload; Routine tasks; Rent extraction; Moral hazard; Limited liability; Nash bargaining;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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