Becker, Gary S. "Crime and Punishment: An Economic Approach", in Gary S. Becker and William M. Landes, eds., Essays in the Economics of Crime and Punishment. Cambridge, MA: NBER, 1974.
Develops a model for criminal activities which depends on the costs associated with crime: costs from criminal damages, costs of catching and convicting offenders, and social costs associated with punishments. The optimal amount of crime minimizes the social loss function. This theoretical framework provides public policy implications for crime and punishment, and is the classic starting point for the analysis of optimal shirking, monitoring, punishment and efficiency wages in firms.
Jackson, C. Kirabo., and Henry S. Schneider, (2015). "Checklists and Worker Behavior: A Field Experiment," American Economic Journal: Applied Economics, 7(4): 136-68.
Analyzes data from a field experiment in which an auto repair firm provided checklists to mechanics and monitored their use. Revenue was 20 percent higher during the experiment, and the effect is equivalent to that of a 1.6 percentage point (10 percent) commission increase.
Erin M. Kelley., Gregory Lane, and David Schönholzer, (2018). “The Impact of Monitoring Technologies on Contracts and Employee Behavior: Experimental Evidence from Kenya’s Transit Industry," UC Berkeley, unpublished paper.
Uses a randomized controlled trial to empirically evaluate how information and communication technologies (ICT) can mitigate moral hazard and enable firms to design more efficient contracts which increase profits and engender business growth. Finds that treated vehicle owners modify the terms of the contract by decreasing the rental price they demand.
Frederiksen, Anders, Lisa B. Kahn and Fabian Lange, "Supervisors and Performance Management Systems," Journal of Political Economy 128, no. 6 (June 2020): 2123-2187.
Studies how heterogeneity in performance evaluations across supervisors affects employee and supervisor careers and firm outcomes using data on the performance system of a Scandinavian service sector firm. Subordinates matched to a high-rating supervisor are paid significantly more and their pay is more closely aligned with performance.
De Rochambeau, Golvine, (2020). “Monitoring and Intrinsic Motivation: Evidence from Liberia's Trucking Firms,” working paper, University of Oslo.
Tests whether a new monitoring technology provided at zero cost should be widely adopted and unambiguously raise workers’ effort, using a field experiment with trucking companies in Liberia. While new monitoring technologies can dramatically raise some workers’ productivity in settings where employment contracts are difficult to enforce, their use may lower the productivity of some workers - those who are intrinsically motivated to work hard.
Brandts i, Jordi., Brice Corgnet, Roberto Hernán-González, José M. Ortiz, and Carles Solà, (2018). "A ‘threat’ i-s a ‘Threat’: Incentive Effects of Firing Threats with Varying Degrees of Performance Information," Working Papers 1023, Barcelona Graduate School of Economics.
Studies the incentive effect of firing threats when bosses have limited information about workers. Shows that a minimal amount of individual information about workers’ effort such as the time spent at their work station is sufficient to ensure strong incentive effects.
Bergman, Peter. 2021 “Parent-Child Information Frictions and Human Capital Investment: Evidence from a Field Experiment” Journal of Political Economy 129(1)
This paper thinks of parents as principals who are trying to motivate their child to work hard at school. In a field experiment, the author shows that giving parents more accurate information (i.e. better monitoring) about their child’s missed assignments improves student achievement.
Herz, Holger and Christian Zihlmann, Christian Adverse Effects of Monitoring: Evidence from a Field Experiment CESifo Working Paper No. 8890, February 2021
In an experiment on remote workers, the authors find that monitoring reduces the average performance of workers, especially among workers who are intrinsically motivated.
Prendergast, Canice. 2021 “Drive and Wave: The Response to LAPD Police Reforms After Rampart”. unpublished manuscript, University of Chicago.
Formal oversight of Los Angeles police officers rose dramatically in 1998 following the Rampart scandal, then fell in late 2002. Prendergast shows that police officers responded to the rise in accountability with a practice they labeled “drive and wave”. As a result, the arrest-to-crime rate fell 40%. When oversight and accountability fell back down to their pre-1998 levels, the arrest-to-crime rate also rebounded to its original level. Essentially, Prendergast shows that more Intense monitoring has an undesirable side effect: officers take risk-reducing actions by simply engaging less with the public.
Mohanan, Manoj, Katherine Donato, Grant Miller, Yulya Truskinovsky and Marcos Vera-Hernández 2021 Different Strokes for Different Folks? Experimental Evidence on the Effectiveness of Input and Output Incentive Contracts for Health Care Providers with Varying Skills American Economic Journal: Applied Economics, 13(4):34-69.
Using an experiment in Indian maternity care, the authors compare the performance of incentive contracts that reward the agents’ outputs versus their inputs. They find that both contract types achieve comparable reductions in postpartum hemorrhage rates, but the output-based contracts cost the employer more money.
Bandiera, Oriana, Michael Carlos Best, Adnan Qadir Khan, and Andrea Prat 2021 “The Allocation of Authority in Organizations: A Field Experiment with Bureaucrats” Quarterly Journal of Economics, Volume 136, Issue 4, November 2021, Pages 2195–2242.
The authors study of the allocation of authority between frontline procurement officers and their monitors affects performance in Punjab, Pakistan. When the authors experimentally shifted authority down the hierarchy, from monitors to procurement officers, performance improved by 9 percent, consistent with a view that autonomy, but not incentives, is correlated with performance in bureaucracies. Incentives for monitors also worked, but only when the monitors do not behave in a corrupt fashion by delaying their approval of the officers’ actions.
Cai, Jing and Shing-Yi Wang 2022 Improving Management Through Worker Evaluations: Evidence from Auto Manufacturing Quarterly Journal of Economics, forthcoming
Using a randomized experiment with an automobile manufacturing firm in China, we measure the effects of letting workers evaluate their managers every month on worker and firm outcomes. We find that providing worker feedback to managers leads to significant reductions in worker turnover and increases in team-level productivity. In addition, workers report higher levels of happiness and well-being.
Battiston, Diego, Jordi Blanes i Vidal, Tom Kirchmaier and Katalin Szemeredi 2022 “Peer Pressure and Manager Pressure in Organisations” unpublished paper, University of Edinburgh.
The authors study how peer pressure among workers interacts with the pressure they receive from their immediate superiors. In a natural experiment at a large organization, individuals work in an open-plan space and, for reasons exogenous to their productivity, their adjacent desks become occupied / unoccupied by co-workers throughout their shift. They identify a causal, sharp and persistent increase in worker’s productivity following the occupation of an adjacent desk. The authors also study how this ‘peer pressure’ effect interacts with monitoring by managers, arguing that peer pressure is a mechanism used by managers to indirectly influence their workers. exert pressure on their subordinates.
Kantor, Jodi and Arya Sundaram “The Rise of the Worker Productivity Score” New York Times, August 14, 2022
Across industries and incomes, more employees are being tracked, recorded and ranked. What is gained, companies say, is efficiency and accountability. What is lost?
Boudreau, Laura E., Sylvain Chassang, Ada Gonzalez-Torres, and Rachel M. Heath 2022 Monitoring Harassment in Organizations unpublished paper, Columbia University.
Harassment at work can be hard to monitor because perpetrators want to hide it and victims fear retaliation. The authors assess a technique known as garbled survey methods to monitor harassment in a phone-based survey of workers at apparel manufacturing plants in Bangladesh. “Garbling” harnesses the reports of many people but offers individual victims plausible deniability that they made a report. The authors find that garbling increases reporting of sexual harassment by about 306%, physical harassment by 295%, and threatening behavior by 56%. Based on these findings and other patterns in the data, they draw implications for decision-makers.
Cai, Jin and Shing-Yi Wang. Improving Management Through Worker Evaluations: Evidence from Auto Manufacturing The Quarterly Journal of Economics, Volume 137, Issue 4, November 2022, Pages 2459–2497.
Using a randomized experiment with an automobile manufacturing firm in China, the authors measure the effects of letting workers evaluate their managers on worker and firm outcomes. In the treatment teams, workers evaluate their managers monthly. This feedback leads to significant reductions in worker turnover and increases in team-level productivity. In addition, workers report higher levels of happiness and well-being.
Yanutelli, Silvia. 2023. From Lapdogs to Watchdogs: Random Auditor Assignment and Municipal Fiscal Performance. NBER Working paper no. 30644
While monitoring can mitigate agency problems, it can become rendered ineffective if auditors are corruptible. The author studies an Italian reform that removed the local governments’ abilities to choose their own auditors, replacing it by introduced a random assignment mechanism. She finds that treated municipalities significantly improve their net surpluses and debt repayments; these effects are a combination of selection, matching and incentive effects.
Dohmen, Thomas, and Elena Shvartsman 2023. Overexertion of Effort under Working Time Autonomy and Feedback Provision. IZA working paper no 16028,
The authors study workers who are free to choose their hours and who are paid according to lump-sum bonuses. In these settings, workers who cannot observe whether they have already qualified for the bonus may work ‘too much’ to eliminate that uncertainty. Providing performance feedback eliminates this effort overprovision
Friebel, Guido, Matthias Heinz, Mitchell Hoffman, Tobias Kretschmer, and Nick Zubanov 2023, Is This Really Kneaded? Identifying and Eliminating Potentially Harmful Monitoring Practices Unpublished paper, Goethe University.
In a large German bakery chain, many workers reported negative perceptions of monitoring via checklists. After surveying workers and managers about the value and time costs of all the checklists, the firm randomly removed the two checklists with lowest perceived value and highest perceived time costs. Sales increased by 2-3% and store manager attrition substantially decreased. Mystery shopping indicates this occurs without a rise in workplace problems. Effects of checklist removal do not appear to come from workers having more time for production, but rather due to improvements in employee trust and commitment. Following the RCT, the firm implemented firmwide reductions in monitoring, eliminating a checklist that employees regard as demeaning, but keeping a checklist that helps coordinate production.
Benson, Alan, and Aruna Ranganathan 2020. A Numbers Game: Quantification of Work, Auto-Gamification, and Worker Productivity American Sociological Review, 85(3): 573-609.
Does monitoring workers improve or impair their productivity? Using personnel and operational data from an Indian garment manufacturing plant, the authors examine how an RFID monitoring intervention affected productivity. They find that monitoring significantly increased productivity for simple work, but significantly decreased productivity for complex work. The authors argue that complex tasks are more meaningful, thus raising workers' intrinsic motivation. Hawthorne effects are also observed, but they can be positive, negative, or neutral depending on work complexity.
Bloom, Nicholas , James Liang, John Roberts, and Zhichun Jenny Ying. 2015. "Does Working from Home Work? Evidence from a Chinese Experiment," Quarterly Journal of Economics, vol. 130(1), pages 165-218.
An excellent example of using a randomized controlled trial (RCT) to study the effects of a personnel policy change in a firm. Workers at CTrip, a 16,000- employee, NASDAQ-listed Chinese travel agency, where randomly assigned to working from home versus in the office. Home working led to a 13% performance increase, improved work satisfaction and experienced less turnover, but their promotion rate conditional on performance fell. Importantly, if the authors had not collected performance data on both their treatment and control groups before and afterthe treatment began, they would have erroneously concluded that working from home reduced productivity.
Aksoy, Cevat Giray, Jose Maria Barrero, Nicholas Bloom, Steven J. Davis, Mathias Dolls, and Pablo Zarate 2022 Working from Home Around the World NBER working paper number 30446
The authors survey full-time workers who finished primary school in 27 countries to document large, lasting increases in working from home during and after the pandemic. Among other findings, most were favorably surprised by their WFH productivity during the pandemic. The authors draw on their results to explain the big shift to WFH and to consider some implications for workers, organization, cities, and the pace of innovation.