Tuesday, November 30, 2004

The Only Solution to New York's School Crisis...

Is contained within this short article by Dwight R. Lee (found through the good offices of NC State's Craig Newmark and SCSU Scholars):

Even popular entertainers and athletes, who receive enormous total satisfaction from their jobs, perform in late-night shows, take road trips, and put in extra hours rehearsing and practicing when they would rather be doing something else. But because their performance is valued so highly by consumers who communicate that value with extremely lucrative compensation, they put in the extra hours.

I am not claiming that compensation is always tied directly to worker output. That is not always practical. But even when employees are being paid about the same, even though some are better workers than others, long-term considerations can still connect pay to performance.

Those who miss too much work are dismissed; less productive workers are more likely to be laid off in business downturns; and more productive workers are more likely to be given better work schedules and promoted. Responding to consumers effectively requires that firms have compensation arrangements that, over time, connect pay to contribution.

Obviously cooperation is important in the workplace. But few things can reduce cooperation more than the perception that compensation isn’t tied to contribution. There is a strong temptation for workers to shirk, at the margin (and it can be a wide margin), even when they enjoy their jobs, if they don’t see a financial reward for diligent effort.

Even assuming that most workers were willing to put in a full day of responsible work without the incentive of pay, a few will always take advantage of the opportunity to shirk if there is no penalty.

This will be noticed by the dependable workers, who find their effort harder and less productive because of the shirking of the few, and who will begin to feel like suckers since they are receiving no more than the slackers. So a few more will decide it is better to be a shirker than a sucker, increasing the temptation of the rest to slack off.

The result is a destructive cycle of shirking that undermines productive cooperation among workers.

And of course, in the article linked to in the immediately preceding post at LFUTB, the panel that studied New York City's disastrous (and expensive) public schools ruled out any consideration of introducing an element of competition that would force New York's public schools to perform competently or be replaced.

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