On March 9, Scott Dyreng led a session on how social norms affect people’s behavior.  I made a post a few days later on the subject with a cite to work by Steve Huddart.  Yesterday I saw another example of how social objectives affect employee utility functions, but this one seems quite different.

Adam Grant, a management professor from Wharton, presented some of his work at OU on Monday. He began with a story of a university’s call center where student employees call alums for donations.  The employees hated their jobs.  Managers in the call center had tried all kinds of traditional motivation tools.  Adam learned that most of the money raised went to scholarships, so he arranged to have a scholarship recipient spend 5 minutes with half of the callers to explain what a difference the scholarship made in his life.  The other half did not meet the recipient.  Over a 6 week period, the performance of the treatment callers was 2-4 times that of the control group.

Upon seeing the results, the call center managers started explaining the importance of the scholarships to new employees.  No effect; the callers only responded to hearing directly from the beneficiaries.  Adam tested a lot of other aspects of how appealing to pro-social emotions can lead to better performance.  I think that folks who do principal agent modeling and empirical work on compensation plans may be very interested in his work.

In regards to financial reporting, I know that auditors attend a lot of education sessions related to fraud, and they probably hear how missing a fraud can have severe consequences to their careers and their firms.  I wonder if a visit by widows and orphans who had their savings wiped out by a fraud might prove a better motivator?