Anti-social behavior in profit and nonprofit organizations
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|28680||2014||13 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Public Economics, Volume 117, September 2014, Pages 149–161
Two types of intrinsically motivated workers are considered: “good” workers care about the mission of an organization, whereas “bad” workers derive pleasure from destructive behavior. Compared to the case with only good motivated workers, the mission-oriented sector has to resort to higher monitoring to deter bad workers from entering the sector. In equilibrium, bad workers work in the for-profit sector where they behave like “normal” people, while good workers self-select into the mission-oriented sector. In the profit-oriented sector, both monitoring and bonus payments for good behavior increase to control the damage caused by bad workers. The results of the paper are illustrated by examples from child care and the threat posed by pedophiles in this sector.
Intrinsic motivation is generally treated by economists as something beneficial to organizations. Most theoretical models on the subject suppose that intrinsic motivation arises if workers derive a benefit from doing good – what is often referred to as warm glow utility – or when workers are interested in a certain goal or mission, like for example helping the poor or protecting the environment. An organization that is dedicated to such a mission may find it easier and cheaper to attract workers pursuing similar goals. However, other aspects of a job may also instill intrinsic motivation in certain types of workers. And these other aspects are not necessarily beneficial for the employer. This is illustrated by the United Nations sex-for-food scandal, which was exposed by “Save the Children”, a UK-based nonprofit organization: it showed that in 2006 aid workers were systematically abusing minors in a refugee camp in Liberia, selling food for sex with girls as young as 8.1 Helping refugees is the kind of mission-oriented work that is likely to attract workers interested in this mission – what we will refer to as good motivated workers. But such a job also involves working with vulnerable children in a remote location with little control from the outside which may also attract workers with quite different intentions – what we will call bad workers. Examples for socially destructive behavior such as this abound, ranging from different forms of sexual misconduct, over terrorism to pyromania and other kinds of abuse.2 In this paper, we analyze how different sources of intrinsic motivation of workers may affect labor management and production outcomes both in for-profit and nonprofit organizations. Psychologists have long recognized and studied anti-social behavior. One strand of the literature, as well as most traditional psychiatry, focuses on so-called internal determinants. Anti-social behaviors, perceived as a pathology, are explained by individual predispositions such as genetics, personality traits, or pathological risk factors rooted in childhood. Another strand of the literature focuses on external determinants. It aims to explain how “ordinary” people can be induced to behave in evil ways by situational variables (see Zimbardo, 2004).3 Our paper is consistent with both views. We assume that the level of negative intrinsic motivation of bad workers is exogenous. That is, anti-social behavior is ultimately driven by internal determinants. However, it depends on the incentives given by an organization whether bad workers will indeed act in an anti-social way or whether they will behave in the organization's interest. In other words, whether individuals act upon their predisposition for certain behaviors depends on external determinants (i.e., on situational variables). If the punishment they face and/or the reward for good behavior are high enough, most people will not act destructively. We extend the model by Besley and Ghatak (2005) who consider only good and regular workers, whereas there are three types of workers in our model: good, regular, and bad. Regular workers only care about monetary incentives, good workers care about money and the mission of the organization, and bad workers care about money and whether they can do things they like, but which are harmful to the organization. We further generalize the approach by Besley and Ghatak (2005) by adding monitoring as an additional choice variable of the employer in order to deal with the different incentive issues raised by the presence of different kinds of workers. In contrast to standard incentive theory, where monitoring is treated as a black box (i.e., fixed cost), here the level of monitoring is endogenous and central to the design and management of organizations: while monitoring reinforces the effort incentives of good and regular workers, it makes bad actions or anti-social behavior less attractive as it increases the chances of getting caught and being punished. By disentangling these two roles of supervision, the paper therefore adds a new explanation why, in practice, so many resources are spent on monitoring. We consider two sectors of the economy, one profit-oriented and one mission-oriented. As in Besley and Ghatak (2005), we assume that in the nonprofit sector, organizations are structured around some mission, for example providing public services, or catering to the needs of disadvantaged groups of society.4 These organizations may attract workers who care about this specific mission and derive an intrinsic benefit from their work. Given this setup, we first consider the case with only good and regular workers and find the classic result by Besley and Ghatak (2005) that the mission-oriented sector offers lower wages and makes less use of bonus payments than the profit-oriented sector. We also show that the mission-oriented sector monitors less than the profit-oriented sector, which is not an explicit result in Besley and Ghatak (2005) as there is no monitoring. We then introduce bad workers who derive utility from behaving in an anti-social way. We take the equilibrium contracts from Besley and Ghatak (2005) as a starting point for our analysis. That is, we use the equilibrium contracts with only good and regular workers, and costly monitoring, as a benchmark against which we compare our results. Since profit-oriented organizations monitor more in equilibrium, they are a priori less vulnerable to anti-social behavior. Bad workers may behave like regular workers in the profit-oriented sector and thus be totally undistinguishable from normal people. By contrast, if bad workers join the mission-oriented sector, then it is only to take advantage of the low level of monitoring and to behave badly. The more organizations in this sector rely on the intrinsic motivation of good workers and the less they make use of monetary incentives and control, the more likely they are to become the target of bad workers. This first result helps to explain why, for instance, most scandals of child abuse involve organizations with no or little monitoring in the past, such as some religious institutions or refugee camps (see the discussion in 2 and 5). We then analyze how contracts in both sectors have to change relative to the situation when there are only regular and good workers if organizations have to deal with bad workers. We consider two possible scenarios: If the damage caused by anti-social behavior is expected to be sufficiently high, then both sectors will want to deter such behavior completely (full deterrence equilibrium), whereas a certain amount of destructive behavior may be tolerated in equilibrium if the expected damage is low (partial deterrence equilibrium). We show that in an equilibrium with full deterrence, bad workers join the for-profit sector where they are indistinguishable from regular workers, while good workers self-select into the mission-oriented sector. To incentivize the bad workers to behave well, monitoring and bonus payments for good behavior both have to increase in the for-profit sector, combining “the carrot and the stick”. In the nonprofit sector, on the other hand, the focus is on the stick to discourage bad workers from joining and thus prevent the occurrence of bad behavior: monitoring has to go up, while the incentives for good behavior tend to stay the same to avoid loosing the benefit from the self-selection of good workers. Next, we discuss the robustness of our model with respect to variations in the damage caused by bad workers. If the expected damage is relatively low, full deterrence may not be worthwhile. We show that in an equilibrium where there is partial deterrence in the for-profit sector, the mission-oriented sector will generally opt for full deterrence such that all bad workers will again be found in the profit-oriented sector. The only exception occurs when the potential damage by bad workers is sufficiently low and good workers are very motivated such that they do not need any monitoring: In that case the mission-oriented sector may have no interest in introducing costly monitoring just to prevent a relatively low level of sabotage, even though it will thus attract all bad workers. Finally, deterrence, which is costly as it implies higher monitoring, even may become entirely ineffective for workers with very high levels of bad motivation (e.g., extremists, kamikaze). We therefore also discuss ex ante measures of candidate selection, which may help to reduce the occurrence of anti-social behavior by screening out bad workers. The paper is organized as follows: We first discuss in Section 2 the related literature and some examples that illustrate our model, before we turn to the description of our basic setup with only good and regular workers in Section 3. We then introduce bad workers in Section 4 and show how the optimal contracts have to change. The empirical implications of the theory are discussed in Section 5 in the context of child care services where the threat posed by pedophiles has been widely documented. Section 6 concludes.
نتیجه گیری انگلیسی
The existence of destructive workers who derive satisfaction from actions that are detrimental to their employer or others has an impact on the optimal monitoring and wage contracts offered in organizations. In particular, we discussed how this affects nonprofit organizations that rely on the intrinsic motivation of their workers. Without bad workers, the mission-oriented sector N can save on wage and monitoring costs compared to the profit-oriented sector F. If the intrinsic motivation of good workers is high enough, it may even forego bonus payments and monitoring altogether. However, the lack of monitoring and extrinsic incentives makes N particularly vulnerable to destructive behavior by bad workers. Indeed, when bad workers join the nonprofit sector it is only to follow their destructive instincts and not because they want to provide a constructive effort. Unless the damage and the relative share of bad workers are very small, in which case it is cheaper for N to accept their presence, the equilibrium solutions both under full and partial deterrence show that N will always want to change its contracts to deter bad workers from joining. To do so, sector N needs to increase its monitoring level, which erodes its cost advantage compared to the for-profit sector. To what extent this is the case also depends on the level of motivation of good workers: For high enough motivation of good workers, the mission-oriented sector can achieve full deterrence by choosing the same monitoring level as in sector F, but otherwise keeping extrinsic incentives at the same level as before. That is, to the same extent that the monitoring level increases, the bonus payment decreases such that the overall effort incentives are still at their optimal level. The mission-oriented sector therefore still may enjoy a certain cost advantage, since it is cheaper to get already motivated workers to provide effort. Given this optimal reaction of sector N, sector F will be confronted with bad workers. In order to reduce their negative impact, the profit-oriented sector has to increase its bonuses and its monitoring levels. We showed that to achieve full deterrence of destructive actions by bad workers, F may even have to increase effort incentives beyond the first best level. Overall, the optimal incentive policies of sectors N and F imply that, in equilibrium, all bad workers are generally in F where they behave like regular workers. It is important to note, however, that to achieve this equilibrium outcome it is not enough to reward good behavior better, but both kinds of organization have to invest in monitoring to deter bad behavior. A question that remains open is why some organizations in the mission oriented sector are not implementing the optimal contract in the first place and, even worse, hide crimes from the general public, thereby protecting the bad agents. Although answering this question is beyond the scope of the paper, we want to discuss a hypothesis that we wish to investigate in future work. In order to focus on the incentive problems raised by the presence of bad workers, we have not taken into account other differences between profit- and mission-oriented organizations. Yet it may be worthwhile to take a look at those differences, in particular the way organizations are financed: While profit-oriented organizations usually have to survive on the proceeds from their sales, which provide them with strong incentives to please their customers, many mission-oriented organizations are run as non-governmental organizations or associations that essentially depend on donations. For them, the scandal caused by bad workers may hence also have considerable negative consequences for their funding, thus making deterrence of bad workers all the more important. However, it also provides strong incentives to hide bad actions by their workers, hence implicitly encouraging them to continue. Another aspect that needs to be discussed is the effect of control on the intrinsic motivation of good workers. There is a recent literature on the crowding out of intrinsic motivation by extrinsic incentives or control.57 Taking into account such effects would mean that the more the mission-oriented sector N increases monitoring in order to prevent damage from bad workers, the lower would be the intrinsic motivation of good workers. N would therefore also have to increase his monetary incentives in order to induce good workers to work hard enough, thus losing its cost advantage. Eventually, good intrinsic motivation would disappear all together and organizations in sector N would operate under the same conditions as firms in the profit-oriented sector F and also offer the same contracts. However, it is unclear to what extent such crowding out of intrinsic motivation actually exists in the context considered here. Motivation crowding out seems to be affected by other factors than the level of monitoring, such as framing and general treatment by the employer (Nagin et al., 2002). As Akerlof and Kranton (2008) underline, “What matters is not more or less monitoring per se, but how employees think of themselves in relation to the firm” (Akerlof and Kranton, 2008, p. 212). If it is made clear that monitoring is increased in order to reduce fraud and anti-social behavior, the motivation of good workers should not be too much affected.