To continue onward from
last week's discussion, I would like to discuss yet another way the conflict
between Jim and Nora over Jim's perceiving racism from Nora could have been
avoided. Jim's assumption that Nora's actions were caused by racism rather than
anything else could be seen as jumping to conclusions. He had only just met her
and had no other reason to assume racism on her part. In reality, I do not know
exactly what made Nora target Jim for the most physically strenuous
construction tasks. It could have been due to his height or the very confident
attitude with which he approached his work that Nora perceived him as the
strongest member of the group, and therefore the member of the group that could
handle heavy lifting the most safely. When seeing the patterns in Nora's
assignment of tasks, Jim might have kept in mind that the goal of the group was
to build the house as safely and effectively as possible, and as such when
talking to Nora he might have focused simply on how he felt that the current
arrangement was unfair to him rather than accusing Nora's character. Models I
and II can be applied to subordinates as well as leaders. This could have kept
the situation from coming to a boil.
I also see ways to connect the situation to more recent
material. In a way, Nora could be seen as an agent serving multiple principals
-- the other members of her group and Habitat for Humanity. Nora's performance
as the leader of a service project was measured by her group by the
effectiveness of her leadership and how enjoyable she made the trip and by
Habitat for Humanity through the completion of the house. By focusing too much
on the assignment of tasks by itself and not enough on the feelings of the
group, she served the latter principal at the expense of the former. Leaders
might be seen as agents in their own way, serving both their goals and their
group, but in the relationship between leaders as agents and subordinates as
principals, there is an inherent moral hazard. Risks taken by the leader to
better serve their goals and the goals of the group are inherently paid for by
their subordinates. In our case, Nora took on risks of the group's overall
enjoyment of the trip in order to build the house more quickly and effectively,
which we paid for as a group. Maybe if leaders took the concept of moral hazard
into account more often, their leadership would be more balanced and effective.
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One of our recent topics in class has been the
principal-agent model. In this model, a principal pays their agent in exchange
for some quantity of work output that the principal derives value from. While
the model we have focused on the most involves a single agent with a single
principal, sometimes in the real world "triangles" involving one
agent with two different principals form. One such situation, which I heard of
from a friend who experienced it, involved a bartender as an agent serving two
principals, their bar's management and their customers, who both compensated
the bartender for his output while valuing different types of output. This
situation was ripe for moral hazard, and while the situation was ultimately
resolved by the bartender moving on, the possible ways that the situation could
have been ameliorated while the bartender was still there are interesting to
explore.
The bartender in the situation was my friend John, who
worked at what we will call Local Bar. As a bartender, his job was to make and
serve drinks ordered by customers. He had two sources for his wages -- one was
his hourly wage, given by his first principal, Local Bar's management, and the
other was the tips given by customers, who were effectively his other
principals. John was unsatisfied with his wage, and asked other bartenders what
he could do to increase his tips, which were the more variable part of his
wage. He was advised to give his customers more alcohol for a given order
whenever possible -- glasses of beer and wine should be filled more and mixed
drinks should have higher proportions of alcohol to juice than prescribed by
management. Not only would the customers appreciate the generosity, but the
increased inebriation would often lead to greater tips due to the customers'
further loss of inhibition. This created an interesting situation. John had two
different principals paying for his labor according to two different types of
output -- the customers paid him according to the quantity of alcohol he gave,
and Local Bar's management paid him for the profits he generated from the
drinks he served. He could increase the quantity of alcohol he gave to
customers to increase his tips. This would likely also increase revenue from
drinks due to more drinks being purchased (from a combination of the drinks
being known for good value and the customers' increasing loss of inhibition,
which often leads people to drink even more) but would risk lowering profits from
the drinks if the revenue was not enough to offset the increased costs. However,
the bar would keep the profits and pay him a fixed hourly wage regardless of
the profits he generated, meaning that John was risking the bar's profits while
he gained from additional tips. Effectively, John could gain by serving one
principal at the expense of another. For a short while, John chose to serve
customers extra alcohol (and saw greater tips as a result), but concerns over
the possibility of getting caught by management, his own sense of ethics, and
knowledge that he could obtain a higher wage by working elsewhere led him to
resign his job with Local Bar and work as a line cook at a local restaurant
instead.
John's situation was likely one that is experienced by
many bartenders. There are a few ways this issue could have been resolved to
give John incentive to serve both principals equally. One way is that Local Bar's
management could have paid John a sort of commission in the form of profit
sharing instead of a fixed wage, effectively passing some of the bar's risk
back to him. This could have made John more concerned with finding a balance
between the bar's profits and his tips rather than maximizing his tips. Another
potential solution could have been for management to monitor the bar's
employees more closely than with the occasional quick checkups they did in
reality, possibly by installing security cameras behind the bar. Bartenders
caught being overly generous with the alcohol would be fired, meaning that in
order to take a risk for the bar, the employees would have to take on another
risk themselves. This would also have incentivized John to serve management and
customers equally. Another solution would have been for John to simply focus on
serving customers with more speed and friendliness, which could have increased
both his tips and the bar's profits. However, as shown in the course material,
additional effort would have given John disutility that may not have been outweighed
by the utility of his additional tips.
The reality of this situation was that John had trouble
serving both of his principals equally. He chose to serve his customers at the
expense of his management, which could have lead him into trouble as an
unscrupulous employee. Had he chosen to go in the other direction by being more
tight-fisted with the alcohol to decrease his employers' costs, he would likely
have displeased the customers and collected fewer tips as a result, giving less
value to everyone but management. By being more generous with the alcohol, he
was giving more value to his customers and himself, helping two parties as
opposed to one, so being more generous with the alcohol was the more optimal
direction to go in from that perspective.
On the questions of whether Nora was racially motivated, in only in a subconscious way, you might be interested in the Campus report on Racial Microaggressions. It suggests that many of these "gray area" situations need to be avoided. The question is how to get that to happen.
ReplyDeleteI do appreciate your keeping up with writing some about the previous post. You are the only one in the class doing that now. I wonder why the others don't but I am glad that you are doing it. Also, I appreciate your post title. Many of your classmates don't seem to know the different between principal and principle. You clearly do.
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Somebody else wrote about a similar situation in the bar. I guess it is a common issue. The way you described things in the second paragraph of this section, however, there is a puzzle. Why should it be that John has discretion as to the size of the drink. If it really is profit maximizing to pour more (for the same price) why doesn't management figure that out and make it the policy of the place?
One possible answer to that is it violates their liquor license. I don't know that it does buy maybe it does. Another possible answer is that bars actually have the reverse incentive - to water down drinks - to keep their costs down. In mixed drinks, I really don't know how the customer could tell. In shots it may be a bit more obvious. In any event, it would be good to know how the bar viewed these things to consider John's conduct.
The last point to make is whether things are monitored carefully or not - how full a bottle is before the evening, how many drinks were served from it - how full it is at the end of an evening. I don't know if there is that sort of monitoring or not. But it matters for telling the story.
From the material in the report, it seems like the best way to avoid racial microaggressions in a work context would be to be prudent in what you say and do and follow model II whenever disagreements occur. I do agree that while it is unlikely that Nora was intentionally or maliciously racist, she might have been expressing some quieter, more subconscious forms of racism -- as many people in society do.
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While John could alter the proportions of the drink since he was physically pouring them, he did not officially have that power given to him by his management. He was, indeed, supposed to make drinks according to the set policies and recipes. By going against those, he and all the bartenders serving their customers extra alcohol were basically committing a form of employee theft. This is why I talked about John's concerns of ethics and getting caught. Perhaps I should have made this clearer.
You are likely correct that, if serving customers more alcohol would have increased profits, the bar would have already changed their policies to fit that. In all likelihood, the bartenders' scheming was hurting the bar's profits. In referring to the possibility of profits increasing, I was trying to acknowledge the fact that a profit increase was still technically possible if unlikely. I was also trying to tie the situation to risk (through the possibility of profits increasing or decreasing) and moral hazard. The bar probably felt that its alcohol serving recipes and policies were optimal for maximizing its profits, and that any changes to them would be detrimental to the bar. If the bar ever felt like its policies were less than optimal, it as a profit-maximizing entity would likely have changed its policies accordingly. The bar's views are why John feared what would happen if he was caught.
From what I could tell, things like the amount of alcohol remaining in bottles versus the sales records were monitored rather loosely or even not at all during some periods due to members of middle management not being particularly hard working. This is why bartenders at Local Bar felt that there was a reasonable chance of getting away with the extra alcohol. However, a bartender that did happen to get caught would likely have been in trouble.