Optimal supervision intensity, collusion and the organization of work

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Official URL: http://dx.doi.org/10.1111/j.1365-2966.2007.00410.x

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.