Armen Alchian Econ 490 Fall 2019: Organizations
My experience with organizations in the work force
In the past, I've worked at various restaurants and retail stores, as well as multiple campus jobs. I think that there are many examples of transaction costs as well as communication strategies/flaws in the occupations I've had.
In restaurants, many transaction costs exist. Obviously, the managers need to pay their workers, as well as buy food in bulk. Health inspections can help and hurt the company, as they can publicly release negative info about a company, but also offer changes to be made to better the business.
What is interesting is the pay structure in restaurants. I worked as a server, and we got payed around 5$ an hour, to accommodate for tips. In this way, the company was able to pay us less on their end, even though we had the ability to make much more than the minimum wage. This incentives the employees to not only want to show up, but also put in more effort. Jobs where employees earn commission, such as sales jobs, are well off with employee effort, in my opinion, because the employees have a reason to try.
One of the campus jobs I worked was a move-in guide for the Bromley dormitory on campus. Here, I would have too say that the communication wasn't at it's best. When on the main floor, they do a good job at assigning you certain families to help move in. The problem with this, however, is once you are on the various floors, you can simply stay up there for as long as you like, and they would have no way in telling. They had no method to communicate with you once you are on the elevators. In fact, many I know that also did this job simply signed in, left, and still got payed for the day. Since it is such a short career (2 days), they don't know their staff by name. Sure, the incentive of staying is that many families tip you for your services. however it isn't guaranteed. I suppose this can be seen as a transaction cost: hiring staff that may or may not actually do the job asked of them.
Another campus job I had was working at Campus Recreation. More specifically, the ARC. They did a slightly better job at keeping track of their employees, however it was still loose. This job required me to sit at the front desk and swipe I-cards, then rotate to the top and bottom floors and act as surveillance. When on the top and bottom floors, no one was there to watch you. Nobody was there to keep track of you. The only method they had to communicate with you was a walkie, and occasionally they would radio you to open a locker or complete another simple task. Other than that, it was free game to sit and do nothing, hide, or do whatever else your heart desired. Simply speaking, it wasn't a difficult job. In order for this to operate more smoothly, they would need to station a manager or a higher ranking employee on each individual floor, but this would be another cost that they trust they don't need. I don't work there anymore, and if I did, I would tell you that this wasn't necessary. But as a former employee, it is definitely something that they need to consider.
I think incentives are a great way to get the most out of your employees. Management can expect more out of their employees, and get more in return. In order for organizations to run properly, something like this should be implemented.
Although you are in Group 3, I'm still commenting on your post, because it came in comparatively early and because, for the time being, there aren't that many other posts for me to comment on. Indeed, it might serve as an example to contrast with what you said above. Why did you get your post done already, when you didn't have to do that? Was there some reason other than incentive that guided your behavior in this case?
ReplyDeleteYou gave several examples here and touched on them a bit but didn't push it very much. In future posts I encourage you to stick with one examples and try to get deeper into it. That is more likely to give good results.
On the specific points you made, for restaurants I believe that in some European countries the gratuity is automatically added to the bill and/or its already included in the individual menu items. I doubt that service is worse there as a consequence. But here, unless it's a top tier restaurant, being a server is likely to be a part time job or an entry level job. I think the incentives are different for somebody who does it full time as a career job. Indeed, in each of the cases you gave the other workers were also students. So you might ask whether the "shirking" you described in the other examples is a consequence of immaturity on their part or for some other reason.
I would also ask how challenging any of this work was and if there was any reward from doing it other than getting paid. If these were menial jobs, and you could readily find another such job elsewhere, on campus or off, then the nature of the work probably matters for the conclusions you drew. In contrast, if finding another such job were difficult, you might put in full effort for fear of losing the job otherwise. Which of those better describes the situations you consider?
And perhaps there is a generational thing at work here as well. When I was a students I did a couple of different campus jobs - one was as a checker at the food service then a couple of years later I washed pots at a sorority. I don't recall any sense of wanting to shirk on those jobs. I can't say whether I was typical for my generation that way or not. But it does seem to be an issue with students now
I think I got my post done early because I didn't want to worry about it over the weekend. My incentive was to have a care-free weekend in which I didn't have to concern myself with schoolwork, especially this early in the semester.
DeleteIt is funny that you mention European restaurants. You are correct in that the tip is added to the bill automatically. However, when going abroad in Europe, I did notice that, in many places, the service was not as good. Perhaps this is because they are already aware that they are receiving the tip, so there is no reason for them to work harder? Or, on the flip side, servers in the US work harder in attempt to receive a tip higher than a 'sufficient' amount to tip someone? Or maybe to receive a tip that isn't close to 0? The shirking can definitely be due to immaturity, but also because there isn't really any incentive other than to not get fired. In the movie 'Office Space,' the main character doesn't work very hard for this particular reason.
The work we did, at just about all the jobs I listed, wasn't very difficult. I think that jobs like these are not very difficult to obtain. For me, I don't want to get fired simply because I would no longer be able to put it on my résumé, and because I don't want to go through the process of starting a new job and getting acquainted.
That's interesting that you say that. I haven't really thought about that before, but I'm sure students are still the same way as you are. If jobs are terrible, especially these early jobs we do when we are young, I think students care less about whether or not they get fired. However, I think that many of us would still prefer to lock down a job we are more content with before allowing that to happen. Also, I think many of us would still prefer to quit then to simply try so little that we get fired.