Optimal supervision intensity, collusion and the organization of work

Official URL: http://digital.sabanciuniv.edu/elitfulltext/offcampus/3011800000264a.pdf

The intensity of supervision. Defined as the proportion of supervisors to bottom-rank productive workers, differs widely across organizations and nations. Analyzing 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 systems: the system that economizes on incentive costs may implement an inferior range of performances. Application of the model generate work-disutility-, ethics and job-characteristics-based explanations for variations in the intensity of supervision.