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Wednesday, April 19, 2006

Summer Jobs

Over at Confessions of a Community College Dean, Dean Dan laments his worst summer job (working in an ice fatctory). I started thinking about the summer job I remember best. It's a job that has provided me with a story I still use when I teach.

In the summer fo 19x8, I worked as a retail route salesman. I was a milkman. Three routes, two days a week each. We got paid 17% of what we collected. I replaced a guy who got fired because he'd done a pretty decent job selling milk, but a truly crappy job colecting for it. I realized quite quickly that my job that summer was to collect for milk that had already been sold. So I found myself knocking on doors in some not-so-nice neighborhoods in Indianapolis (near-east-side, near-northeast-side, and near-northwest-side), and asking for money. And people gave me money. I suspect that come of them might not have actually owed the company anything, that they had moved in after my predecessor got fired and before I started, but they paid. By the end of the summer, my three routes went from being in the top 10 unpaid balances to being in the bottom 10 unpaid balances. But I solicited no new customers, and I did nothing to encourage existing customers to buy more.

The lesson I use when I teach? That incentives matter, and that it's important for companies to structure their incentives correctly. How I worked those routes was appropriate, given that I was only going to be there for three months. But I left my successor in a hole, with tiny unpaid balances to collect. Had I expected to be there longer, I would have acted differently.

And should I mention than one of my customers was a house of ill repute? Probably not.


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