Categories:
Behavioral Economics
Labor Market
Last spring I asked EconLog readers about the obviousness of on-the-job incompetence. Most people thought incompetence was very obvious indeed. It turns out that this view is widespread. The General Social Survey asks:
In your job how easy is it for you to see whether your co-workers are
working well or poorly? On a scale of 0 to 10 please describe with 0
meaning not at all easy to see and 10 meaning very easy to see.
The distribution of responses:
Doesn’t this confirm the practical irrelevance of the signaling model of education? No. The question asks about the obviousness of observed job performance of current workers, not predicted job performance of job applicants. And as my whole series on firing aversion revealed, many employers retain incompetent workers despite the cost. Credentials alone often put a job in your hands – and subsequent poor performance often fails to tear that job from your grasp.
READER COMMENTS
Derrill Watson
Dec 7 2012 at 6:44am
It’s also consistent with the Peter Principle of skills, though. Everyone is promoted until they become incompetent and there they stop. In the end, everyone is incompetent, but we used to be able to do something.
Zubon
Dec 7 2012 at 7:05am
This must be balanced with how many people think they know a lot about things they know little about. Does the ignorant voter believe s/he can “see whether your [legislators] are working well or poorly?” My staff has several people who have declared themselves experts in everyone else’s business.
Slocum
Dec 7 2012 at 7:32am
Even if it is relatively easy for co-workers to detect incompetence that does not necessarily mean that it is easy for management to do so.
Finch
Dec 7 2012 at 9:26am
I’ll put forward a different argument. It’s not that people are hiding crippling incompetence, it’s that competence just isn’t that important.
You think successful companies like Apple and Google and Wal-Mart and GE are filled with great employees? That they’ve cut out all the chaff? Of course not. They’re filled with morons like every other firm.
The thing is, and this is common in engineering, it’s possible to build a reliable machine from unreliable parts. That’s what these firms are doing. They capture the upside from the few great employees and the more mundane contribution or insight from the more ordinary folk, and that’s enough.
bryan willman
Dec 7 2012 at 9:39am
there is at least one field – software – where who seems to be competent this week and who will be proven incompetent in 6 months to a year have little relationship.
it is like the “best doctor” suveys that focus on how long the wait was and whether the lobby had wifi, rather than the cost and quality of the actual care.
Floccina
Dec 7 2012 at 9:44am
Some people are incompetent at hiding there incompetence. There are also incompetent who know how to kiss up to the boss to keep their jobs and then you have the hard working incompetents who nobody wants to fire, so it is still very important to avoid hiring incompetent people in the first place.
Neerav
Dec 7 2012 at 10:01am
These two (signaling, firing aversion) seem interrelated – the harder is to fire someone, the less risk you want on hiring, and the more you’re willing to pay for signaling / hoop jumping so long as there is some correlation between the signal and predicted performance….
William Callahan
Dec 7 2012 at 10:03am
I think the driving factors of firing aversion are two things that haven’t been discussed much in this series. First, sunk cost. By the time you’ve done the background check, credit check, drug testing, residency verification, etc, that even the most entry-level jobs seem to require these days, you’ve made quite an investment. Add training costs and it starts to look like you should at least try to break even by threatening them with write-ups, warnings, and other such measures to try to get some productivity out of them before showing them the door. Second, many supervisors in my (retail) company are terrified of firing anyone without lots of careful documentation of every transgression. Almost everyone is a part of at least one protected class of worker or politically savvy interest group. The majority of people belong to at least one minority, and a lawsuit, however frivolous, can cost far more than years of inept service. It also seems that the first reason (investment) is caused by the fears of the second. In other words, signaling is working on more levels than just the qualifications on your resume.
gwern
Dec 7 2012 at 12:15pm
The GSS really asks about everything, doesn’t it?
Les Cargill
Dec 7 2012 at 1:55pm
Unless we are talking about *gross* incompetence, this is much more difficult than anyone thinks. I’ve twice now been hired as “team lead” and given the dregs; in both cases, “the dregs” were just fine as performers but had some curious … hangup preventing good performance ( like having what was needed actually explained to them ). People in groups will sort in ways you should be familiar with from reading “Lord of the Flies”… Any “data” they collect goes towards reinforcing their investment in their current bias.
I’ve also been through layoff cycles where it was abundantly clear that the *competent* were being flushed out ( presumably because it was believed they’d have an easier time finding work ). But they were competent in fundamental ways, not in the way of the current flavor of the month. The flavor of the month changed the next month. Imagine that….
The main way in which people are evaluated? Who gets in first in the morning. They’re earlier, so they must work harder. Meanwhile, some of us have to clean up after ’em….
Within a firm, people charge rents on conformance to the present model of performance. The present model of performance exists independent of what the firm actually *does*…. unless what the person does is somehow accidentally measured as part of the basic governance of the firm.
John Fembup
Dec 9 2012 at 10:37am
Finch notes “it’s possible to build a reliable machine from unreliable parts”
That’s consistent with Peter Drucker’s definition of management: taking advantage of employees’ strengths, and making their weaknesses irrelevant. That is, Finch and Drucker both acknowledge that’s it’s ultimately necessary to work with at least some “unreliable parts.”
Naval carrier flight operations provide a terrific example of how “unreliable parts” can work to near perfection when managed well. Consider that a carrier flight crew is staffed mostly with young men of random, if not indifferent, abilities who serve a couple years at most before leaving the service.
I think it’s not always easy to spot others’ incompetence. Sometimes others are optimal performers and you don’t like it because their work interferes with yours, or you just don’t understand their work – – or, even, that YOU are the incompetent one. It’s easier to criticize than to learn.
Jimmy Valvano once said that when he got his first head coaching job, he understood for the first time how much difference there is between a recommendation and a decision. (OK, maybe that’s not quite relevant, but I love the quote.)
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