Neal's Workshop

I've been out of school and in the "working world" now for almost three years. In that time, I've worked for one gigantic private company and one relatively small public company (my current place of work). The most important thing I've learned: there's a point in any organization when mediocrity becomes policy.

What do I mean? Let me illustrate first through examples. At 5:00 p.m. on any given day of the week, 90% of my colleagues will have gone home. Co-workers push back on work because they are "too busy" or want to "decomplicate" their jobs. These same people are frequently seen shooting the shit, surfing the 'net, taking long breaks and/or arriving late and leaving early. When they actually have to do work to meet some deadline, they complain about it. And when someone inevitably gets fired, they start freaking out. Why? Because they know they're overpaid and underworked. The rest of the time (most of the time), work-life means doing just enough to "stay under the radar": mediocrity is policy (MiP).

Call it the "lowest common denonminator" or doing "just enough to get by": MiP is all of these things. It's bullshit, but not all that surprising. I spoke about the principal-agent problem yesterday in my post about France. Well, MiP and the principal-agent problem go hand in hand - particularly in large organizations.

In any large organization, there are many layers of management. Few of these managers have significant stakes in the ownership of the company. Their employees (often other managers) have even less stake. To control for this obvious manifestation of the principal-agent problem, incentive programs are developed to bonus people when they do "good work." This is easy to do for salesmen and extremely difficult to do for upper management and overhead-type departments (HR, accounting, legal, etc.). The more distanced the work is from any consistently measureable, tangible, and correlating output, the more difficult it is to incentivize the employee. Overcoming the principal-agent problem is hard. Thus, instead of dealing with it, most organizations simply set up blanket bonus programs that are based on the overall company's return. These programs are poor ways to incentivize upper management and downright ridiculous ways to incentivize accountants, HR, legal, admin, etc. - as if a policy I write on the implications of FAS 156 on our accounting for secured assets has anything to do with the company's overall return.

But does anyone bring this little problem to the attention of management? Of course not. We like being bonused for work we didn't do. No way we're going to tell our managers to make us work harder. We may be lazy, but we're not stupid.

So it goes: mediocrity as policy prospers. We benefit at the cost of our principal, who is too distanced from the problem to try and fix it.