Supervisor Heterogeneity: An Analysis Of Uk Microdata
| Date | 01 September 2002 |
| Author | John G. Sessions,Sarah Brown |
| DOI | http://doi.org/10.1111/1467-9485.00239 |
| Published date | 01 September 2002 |
SUPERVISOR HETEROGENEITY:
AN ANALYSIS OF UK MICRODATA
Sarah Brown*and John G. Sessions**
ABSTRACT
We investigate the attributes of supervisors and the key correlates of the extent of
their supervisory responsibilities. We find a strong correlation between wages,
education, experience, firm size and the extent of supervision. One implication of
this is that firms may be indifferent between employing a few, ‘high responsibility’
or many ‘low responsibility’ supervisors. Our findings, suggestive as they are of
supervisory heterogeneity, should be taken into account in studies that proxy the
intensity of monitoring primarily by the number of supervisors employed.
II
NTRODUCTION
I have tried ... to provide a case for taking supervisors seriously. There are
millions of them. They apparently serve important economic functions. We
should learn much more about them (Gordon, 1990, p. 32).
More often than not the employment relation is epitomized by asymmetric
information and divergent interests; employers like profit, employees like pay. High
revenue should suit both, but unless some form of individual incentive scheme
applies, employees may be required to exert more than their utility maximizing
level of effort. To overcome this, employers have been obliged to offer a variety of
‘carrots’ (such as efficiency wages) and ‘sticks’ (such as threats of dismissal) to
motivate employees. Labour economists and human resource specialists have
investigated the ensuing wage-monitoring trade off extensively —if efficiency wages
are successful in eliciting effort then, ceteris paribus, one would expect firms paying
such premia to invest fewer resources in monitoring worker behaviour.1
Empirical investigation of the trade-off has, however, proved to be somewhat
inconclusive. Groshen and Krueger (1990), using data from the 1985 Hospital
Scottish Journal of Political Economy,Vol.49,No.4,September2002
#Scottish Economic Society 2002,Publ ishedby Blackwell Publishers Ltd, 108 Cowley Road, Oxford OX4 1JF, UK and
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407
*University of Leicester
*Brunel University
1See, for example, Bowles (1985), Calvo (1979) and Eaton and White (1983). It is possible,
however, that high wages are a necessary compensating differential for occupations that require
distastefully high rates of supervision (Aoki, 1984). Evidence of a positive (negative)
relationship between wages and monitoring in the Swedish public (private) sector is obtained
by Arai (1994).
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