suppose you are accepted for a job, which only has a fixed component and no variable/performace based incentives, where your manager has no way of telling whether you’re putting in the efforts or not. since irrespective of your effort, you will recieve the same amount of salary, the rational thing for you to do is slack. you should not put in any effort to the job because effort has a cost.

white collar industries usually have better measurement techniques for the effort put in by workers. managers can delegate measurement to technology. which is why i think that blue collar workers in india need to always be monitored by a person.

blue collar industries do have visible output which you can infer the effort from. real estate workers have to physically build stuff that you can monitor over a period of time. house workers need to clean the house and utensils that can visibly be measured.

but even if effort is visible, the rational thing to do, in jobs like house worker or real estate labour, or in jobs where repeated interactions are low, is to do the bare minimum of the job. the bare minimum effort that gets the work done and does not get you caught. yes maybe you did not cement the bricks the best way but just well enough to not cause any problems. that is rational.

i often hear that finding reliable workers in india is difficult. i think by default, any person in a job that does not have variable incentives or repeated interactions, will tend to only do the bare minimum, because that is the rational thing to do.

what changes this scenario is education. education that builds morality. because if i’m not being monitored by the manager, if we assume no morality, then because effort has a cost, then do nothing. but if we include morality in the model, then not doing the moral thing has a cost. and if morality’s cost is higher than the cost of putting in the effort, then i’ll put in the effort because i don’t want to feel guilt later on.

and so a moral real estate labour will put in the extra effort to cement that brick perfectly because they’ll realise that accidents could occur if they don’t. but real estate labours are real estate labours because they do not have the education to do something else.

jumbled thoughts these really but these are the inferences

  • repeated interactions create coordination. one off interactions create lame ducks.
  • morality makes people do the right thing even when doing it incurs an additional cost. so education that instills morality is beneficial.
  • without morality, the rational thing to do is to put in the bare minimum effort.