Suppose that you are a manager.You are considering whether or not to monitor employees with the payoffs in the normal-form game shown below. $\begin{array}{c}
\text { Worker }\
\text { Manager}
\begin{array}{|l|l|l|}
\hline & \text { Work } & \text { Shirk } \
\hline & & \
\text { Monitor } & -1,1 & 1,-1 \
\hline \text { Don't } \
\text { Monitor }& 1,-1 & -1,1\
\hline
\end{array}\end{array}$ What should the manager do to solve the shirking problem?
A) Always monitor.
B) Never monitor.
C) Sincerely tell workers not to shirk.
D) Engage in "random" spot checks of the workplace.

Question

Suppose that you are a manager.You are considering whether or not to monitor employees with the payoffs in the normal-form game shown below. $\begin{array}{c}
\text { Worker }\
\text { Manager}
\begin{array}{|l|l|l|} 
\hline & \text { Work } & \text { Shirk } \
\hline & & \
\text { Monitor } & -1,1 & 1,-1 \
\hline \text { Don't } \
\text { Monitor }& 1,-1 &  -1,1\
\hline
\end{array}\end{array}$ What should the manager do to solve the shirking problem?
A) Always monitor.
B) Never monitor.
C) Sincerely tell workers not to shirk.
D) Engage in "random" spot checks of the workplace.

Quizplus · Accepted Answer

The payoffs in the game suggest that it is better for the manager to monitor the workers, as the payoff for monitoring is higher when the workers shirk. However, if the workers anticipate being monitored all the time, they may still shirk as they will become resentful of their privacy being invaded. On the other hand, if the workers know they will never be monitored, they may shirk more often as there is no penalty for doing so. Therefore, the best solution is to engage in random spot checks of the workplace, which will keep the workers on their toes without invading their privacy. This will create incentives for the workers to work harder, as they will never know when they will be monitored, but it also avoids creating resentment from constant monitoring.

Suppose That You Are a Manager What Should the Manager Do to Solve the Shirking Problem