sorts of defectors. Whether it's company employees, government employees, or members of any type of organization, there are always people who simply don't do the job they're supposed to.
There's another kind of defecting employee: someone who doesn't think of his employer's best interest while doing his job. Think of the officious employee who cares more about the minutiae of his procedures than the job he's actually supposed to do, or the employee who spends more time on office politics than actually working. The comic strip Dilbert is all about the dynamics of defecting employees and their defecting managers.
The fact that organizations almost never stop functioning because of defecting employees is a testament to how well societal pressures work in these situations. Organizations pay their employees, but there's a lot more than just salary keeping people doing their jobs. People feel good about what they do. They like being part of a team, and work to maintain their good reputation at work. They respond to authority, and generally do what their superiors want them to do. There's also a self-selection process going on; companies tend to hire and retain people who set aside their personal interests in favor of their employer's interests, and individuals tend to apply to work at companies that share their own balance between corporate and personal interests. And if those incentives aren't enough, corporations regularly fire employees who don't do what they're paid to do—or employees quit when they don't like their working conditions. There are also other financial incentives to cooperation in the workplace: commissions, profit sharing, stock options, efficiency wages, and rewards based on performance.
The poorer the job is—the less well-paying, the less personally satisfying, the more unpleasant, etc.—the more restrictive the security measures tend to be. Minimum-wage employees are often subject to rigorous supervision, and punitive penalties if they defect. Higher-level employees are often given more latitude and autonomy to do their job, which comes with a greater ability to defect.
This means that the ability to defect, and the stakes of defection, generally increase the higher up someone is within an organization. The overall trade-off is probably good for the organization, even though the occasional high-ranking defecting employee can do more damage before being discovered and realigned or fired than some misbehaving staff on the bottom rung. A senior executive can modify the organizational interest to be more in line with his own. And since he is in charge of implementing societal pressures to ensure that employees act in the organizational group interest, he can design solutions that make employees more likely to cooperate while still leaving him room to defect. He can build in loopholes. Additionally, because he can implement societal pressures to limit defections among the other employees, he can minimize the Bad Apple Effect that would magnify the adverse effects of his defection to the organization. In extreme cases, a CEO can run the company into bankruptcy for his personal profit, a ploy called “ corporate looting ” or “control fraud.” His power makes it possible for him to impose his personal agenda on top of the organizational agenda, so the organization becomes—at least in part—his personal agent.
This kind of thing doesn't have to be as extreme as fraud. Think of a CEO whose salary depends on the company's stock price on a particular date. That CEO can either cooperate with the group interest by doing what's best for the company, or defect in favor of his self-interest and do whatever is necessary to drive the stock price as high as possible on that date—even if it hurts the company in the long run. 1
Sambo's restaurants had an odd incentive scheme called “fraction of the action” that let managers buy a 10% interest in individual restaurants: not only the ones they worked at, but
There's another kind of defecting employee: someone who doesn't think of his employer's best interest while doing his job. Think of the officious employee who cares more about the minutiae of his procedures than the job he's actually supposed to do, or the employee who spends more time on office politics than actually working. The comic strip Dilbert is all about the dynamics of defecting employees and their defecting managers.
The fact that organizations almost never stop functioning because of defecting employees is a testament to how well societal pressures work in these situations. Organizations pay their employees, but there's a lot more than just salary keeping people doing their jobs. People feel good about what they do. They like being part of a team, and work to maintain their good reputation at work. They respond to authority, and generally do what their superiors want them to do. There's also a self-selection process going on; companies tend to hire and retain people who set aside their personal interests in favor of their employer's interests, and individuals tend to apply to work at companies that share their own balance between corporate and personal interests. And if those incentives aren't enough, corporations regularly fire employees who don't do what they're paid to do—or employees quit when they don't like their working conditions. There are also other financial incentives to cooperation in the workplace: commissions, profit sharing, stock options, efficiency wages, and rewards based on performance.
The poorer the job is—the less well-paying, the less personally satisfying, the more unpleasant, etc.—the more restrictive the security measures tend to be. Minimum-wage employees are often subject to rigorous supervision, and punitive penalties if they defect. Higher-level employees are often given more latitude and autonomy to do their job, which comes with a greater ability to defect.
This means that the ability to defect, and the stakes of defection, generally increase the higher up someone is within an organization. The overall trade-off is probably good for the organization, even though the occasional high-ranking defecting employee can do more damage before being discovered and realigned or fired than some misbehaving staff on the bottom rung. A senior executive can modify the organizational interest to be more in line with his own. And since he is in charge of implementing societal pressures to ensure that employees act in the organizational group interest, he can design solutions that make employees more likely to cooperate while still leaving him room to defect. He can build in loopholes. Additionally, because he can implement societal pressures to limit defections among the other employees, he can minimize the Bad Apple Effect that would magnify the adverse effects of his defection to the organization. In extreme cases, a CEO can run the company into bankruptcy for his personal profit, a ploy called “ corporate looting ” or “control fraud.” His power makes it possible for him to impose his personal agenda on top of the organizational agenda, so the organization becomes—at least in part—his personal agent.
This kind of thing doesn't have to be as extreme as fraud. Think of a CEO whose salary depends on the company's stock price on a particular date. That CEO can either cooperate with the group interest by doing what's best for the company, or defect in favor of his self-interest and do whatever is necessary to drive the stock price as high as possible on that date—even if it hurts the company in the long run. 1
Sambo's restaurants had an odd incentive scheme called “fraction of the action” that let managers buy a 10% interest in individual restaurants: not only the ones they worked at, but
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