Reputations

One of the reputations that I believe that I have across all domains in my life is that I am someone that is always willing to help. With my family and friends, I am known as someone that they can always come to if they need help finishing a task, need advise or just want someone to listen. I always try to put others, especially my loved ones, before myself, and it is something that I take pride in. The domain that I would like to focus more closely on, though, is the reputation I had at the place that I interned this summer, which is that I’m a person always willing to help. I try to achieve this reputation at every place that I work.

As anyone who has read my past blog posts knows, I worked for a pharmaceutical product manufacturer and distributor this past summer in the Chicago suburbs and I will be returning there full-time upon my graduation. Before talking about my reputation within this internship that I believe secured myself a full-time offer, I would like to take a step back and briefly discuss why I was able to receive an interview and internship offer in the first place. I think that by already having past internship and work experience on my resume as a junior really helped in receiving an interview with Medline as well as other companies. I think that this showed my willingness to work and my initiative that I was later able to portray in my interview and throughout my internship.

On the first day of my internship, I spent most of my day in presentations about the company and internship experience with the other forty interns. One thing that was told to us during one of the presentations was that they had room for all of us to get full-time offers as long as we proved that we were deserving of the position. The sort of things that the recruiter said that the company typically looks for in a full-time hire is that they are motivated, work hard and take initiative, all things that I believed I had exemplified in my past jobs.

From there, I jumped right into my internship. I was placed in a division with people that I instantly connected with and felt comfortable around. Becoming this comfortable with my coworkers allowed me to ask a lot of questions to learn as much about the product and company as possible. I also became comfortable asking for work whenever I felt like I had time to, and it also lead my coworkers to ask me to do extra tasks for them if I had the opportunity. Knowing that at the end of the summer I would be eligible to receive an offer from the company and that in order to do so I would have to prove myself deserving in ten short weeks, I wanted to take full advantage of every opportunity given to me and make the most out of every day that I was there.

I seemingly instantly became known within my division as someone who was willing to help with tasks, even if they weren’t related to my projects that I was assigned to by my manager on my first day. I’m sure this is how many interns are perceived, it is one of the main reasons companies have interns in the first place. However, I think beyond that my division knew that I genuinely liked helping out when I could. I was able to learn various different aspects of the division beyond the marketing side that I was hired on for.

At times, I would say that I have strayed from this reputation of always taking on other tasks. I took a business ethics class the semester before my internship, and one of the topics that my professor went over is setting personal boundaries when it comes to work. He mentioned that for many people, myself included, it’s hard to say no to someone when they ask for your help, but it’s important for work not to completely take over your life. I think this pertains more to a full-time career when you are on salary, but I found it being applicable during my internship as well. As an intern, we were supposed to try our best to get our work done in a forty-hour time limit and we weren’t supposed to work overtime. With this restriction, I had to learn to prioritize my work and make sure that I wasn’t committing to too many projects that I wouldn’t be able to complete.

Principal-Agent Problem

I think that, oftentimes, the reason a principal-agent problem occurs is when the agent believes there isn’t enough incentive for them to do a certain task. In class, we have talked in detail about how something such as a being paid on commission affects the teamwork aspect within a company or job, but thinking closely I think that this would also have a major impact on this concept of the principal-agent problem.

When an employee’s actions are partially or fully correlated with their pay, I think that it’s fair to say that the employee is more likely to work hard and shirk less because it directly affects them and their living. In a sales position, for example, those employees are typically go-getters who are relentless in their goal of making that sale. Clearly, they want to make that sale for the good of the company, but they are much more focused on the commission they will get from that sale.

While I think that this assumption holds true in many situations, I believe that the idea that the task isn’t worth the pay happens in commission-based jobs as well. One example I was able to think of is the relationship with a realtor and the seller that hired them. A realtor earns their income by selling homes and the more that the house sells for, the more they themselves will make since realtors make commission based on a percentage of the selling price of the home. Now, thinking about this, you would think that a realtor would, similar to the sales employee I previously mentioned, would be relentless in getting that highest asking price for the home of the person(s) that hired them.

Most of the time I would think this is true, but in this scenario the marginal benefit for the agent is far less than that of the principal. By that, I mean that the principal, or the person selling the home, would probably want their realtor to negotiate for every dollar they could because they would are the ones receiving the bulk of that selling price. While the selling price does have an impact on the realtor’s pay, they probably don’t care about renegotiating with a prospective buyer for a couple hundred, maybe even a couple thousand, dollars because the realtor might value their time more than the slight increase in commission they would receive. This situation has clear moral hazard, because the principal hired the agent, in this case the realtor, to help them receive the highest sale price possible for them and the realtor can not exert as much effort as they should because they don’t find the commission worth their time.

I think that this same kind of moral hazard would occur even more so in companies that have employees that aren’t paid based off of commission. Many, possibly even more, people feel that they aren’t paid enough for the job that they do. Now, whether or not that is in fact true, a person would be less likely to do more work or do anything innovative for the company if they don’t think they are going to get properly incentivized. I heard this sort of thing from a couple people that I worked with this summer at my internship.

One thing that the company I interned for implemented I believe as a way to counteract the principal-agent problem is a bonus system, which I have talked about in a previous post. To reiterate, the bonus system was based off of specific tasks and numbers that would reflect your and your division’s work. In terms of teamwork, it created an environment that promoted a lot of collaboration since your bonus could be affected by the work of someone else’s. In terms of the principal-agent problem, I think that it also helps counteract this because it gives specific numbers and tasks for each employee to meet that benefit the company, but also benefit them since a bonus is based off of it. Now the question about this system is what if the employee could actually go further than the numbers but choose not to because they already met their “quota.” I’m sure this happens in some cases, which is a moral hazard and a principal-agent problem, but I think that if the goals are assessed properly between the principal and agent at the beginning of the bonus term that this shouldn’t be a major issue or conflict.

Team Conflict

I have had numerous part time jobs and internships ever since I was sixteen years old, and in most instances I would say that I got along with all of the people that I worked with. There was one project, however, when I was an intern at the State Farm Research and Development Center in Research Park that I found myself in a conflict with a peer.

I started working for State Farm during January of my sophomore as a Property and Casualty Actuarial Intern. This was obviously when I was still an actuarial science major. During the spring semester there, I worked on pricing projects with another intern who had some experience with the projects and we actually became very good friends through working together. After the spring school semester with State Farm, I stayed there for the summer full-time and was able to work on pricing projects as well as a research project. The team of interns that was put together for this project was across different divisions of the company, basically just meaning that we had different majors or areas of expertise. The interns on the team varied in ages as well. Most of us were rising sophomores and juniors, which wasn’t uncommon for the Research Center, but there was one rising senior who had been working there for over two years.

Overall, I would say that I got along with the five younger interns that I was on this project with, but all of us had conflict with this one older intern, who I will call Ben for the rest of this post. We all felt this conflict on the very first day of our project when he took charge of the project on the first day and assigned us all tasks but never assigned himself anything. I think that Ben acted this way because he was indeed older than us and had worked there much longer than us. Now, I understand that in group projects there is usually one person that takes charge, but the rest of us were looking at this as a collaborative project where we were all equals and would work together, not one where we would have separate tasks and would have to update Ben as if he was a manager. Throughout the summer, tension built between Ben and the rest of us interns in the group.

At first when myself and the other interns realized we were all feeling the same way about Ben, we initially acted somewhat childishly and would complain about him to each other and wouldn’t tell him when some of us were meeting up to discuss the project. I think we were hoping we could just ignore the situation and get on without Ben or at some point make Ben realize that we all believed his behavior and attitude were a problem and force him to change, much like Model I. In our situation, myself and the five fellow younger interns all assumed that Ben was the problem, decided to work privately without him and hope that we could make him change. This situation went on for about half of the summer, or six weeks.

It was this halfway point where myself and the other interns decided we ourselves needed to change. We noticed that there was a disconnect in our group since we weren’t communicating properly with Ben and it was becoming apparent to our corporate contacts that we would report to that something was going on. We didn’t want our feelings about one person to affect our project or our reputations, which I guess you could say was our "breaking point." This is when we decided to change our actions and include Ben in our work and just talk to him about how we had been feeling thus far in the summer. Reflecting upon this, doing so was much like Model II where we put our common goals ahead of everything else, openly communicated with everyone on our team and combined our expertise together to create a great project by the end of the summer. I won’t lie, Ben still wasn’t my favorite person to work with and we didn’t become friends, but we were able to learn to work together effectively.

Looking back, I do think that our team could’ve handled the situation differently, potentially could’ve been more proactive about our feelings towards Ben, to try and combat this conflict earlier; however, I think that the personalities of the interns and Ben just didn’t mesh well which was the root of the conflict; therefore I believe a conflict was inevitable at some point.