Monitoring, Motivation and Management: The Determinants of Opportunistic Behavior in a Field Experiment

49 Pages Posted: 28 Feb 2002 Last revised: 26 Oct 2010

See all articles by Daniel Nagin

Daniel Nagin

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

James B. Rebitzer

Boston University School of Management; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics; Bard College - The Levy Economics Institute

Seth G. Sanders

University of Maryland - Department of Economics

Lowell J. Taylor

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Date Written: February 2002

Abstract

Economic models of incentives in employment relationships are based on a specific theory of motivation. Employees are 'rational cheaters,' who anticipate the consequences of their actions and shirk when the perceived marginal benefit exceeds the marginal cost. Managers respond to this decision calculus by implementing monitoring and incentive pay practices that lessen the attraction of shirking. This 'rational cheater model' is not the only model of opportunistic behavior, and indeed is viewed skeptically by human resource practitioners and by many non-economists who study employment relationships. We investigate the 'rational cheater model' using data from a double-blind field experiment that allows us to observe the effect of experimentally-induced variations in monitoring on employee opportunism. The experiment is unique in that it occurs in the context of an ongoing employment relationship, i.e., with the firm's employees producing output as usual under the supervision of their front-line managers. The results indicate that a significant fraction of employees behave roughly in ccordance with the 'rational cheater model.' We also find, however, that a substantial proportion of employees do not respond to manipulations in the monitoring rate. This heterogeneity is related to employee assessments about their general treatment by the emp loyer.

Suggested Citation

Nagin, Daniel and Rebitzer, James B. and Sanders, Seth G. and Taylor, Lowell J., Monitoring, Motivation and Management: The Determinants of Opportunistic Behavior in a Field Experiment (February 2002). NBER Working Paper No. w8811. Available at SSRN: https://ssrn.com/abstract=302572

Daniel Nagin

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

James B. Rebitzer (Contact Author)

Boston University School of Management ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States
617 353 4605 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Bard College - The Levy Economics Institute

Blithewood
Annandale-on-Hudson, NY 12504
United States

Seth G. Sanders

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States

Lowell J. Taylor

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States
412-268-3278 (Phone)
412-268-7036 (Fax)

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