Pride in One’s Work

April 16, 2021 by Matthew Fraker

One should always perform a job, regardless of the size, to the best of one’s ability. When I first started in real estate, my instructors told me that we owe a fiduciary duty to our clients. Fiduciary duty means that we put the client’s needs before our own in every respect. The concept of fiduciary duty goes far beyond that of a real estate broker and extends to attorneys and boards of directors alike. I firmly believe that this term should be part of everyone’s vocabulary who performs a service for another. Acting in the best interests of another is tantamount to being selfless, and I can’t imagine there are too many situations where being selfless proves detrimental to a relationship. While I believe an altruistic world would be a good one, I want to focus on the concept of services rendered in this article.

I recently had a series of different renovations completed at my house. On two separate occasions, the job was completed poorly or incorrectly, resulting in an additional out-of-pocket expense. I kindly raised concerns with each respective company, and they either insisted they did the work correctly or tried to charge me to fix the mistake. These were very reputable and highly recommended companies who charge a premium for their services, so I gave them the benefit of the doubt when each company stood by their work. I decided to talk to home inspectors and other experts in the field—without divulging the names of the companies who did the job—which confirmed my suspicions. I didn’t disclose the companies’ respective names when I got a second opinion because it was not my intention to tarnish anyone’s reputation, regardless of how disappointed I was.

The key question is as follows: why wasn’t the job performed correctly? I considered that my standards might be too high. It’s also possible that the people who did the work were having a bad day. After all, who am I to judge someone’s work when I don’t work in the industry? It’s also possible that the people who did the job were utterly overworked! If I was told the work is fine when I got a second opinion, I would have been content, but that wasn’t the case. To add insult to injury, I ended up paying a premium for these services.  As I thought through the situation, it reminded me of conversations I have had with friends and acquaintances who had similar experiences. On more than one occasion, I distinctly remember someone telling me, “people don’t seem to care about their work.” I don’t want to generalize; more people may care about quality work than there are that don’t. However, I have personally dealt with numerous companies whose work has resulted in additional costs for me.

Is this a problem, and is there a solution? Around this time, my fiancé informed me that she joined Orangetheory Fitness, a very popular, and from what I hear, effective gym. There was one particular thing that stuck out to me when she described their business model. If you miss a class, you owe a relatively small amount of money. I can’t speak to Orangetheory’s reason for charging the fee, but I believe that there is a significant psychological effect at play called loss aversion. In short, the theory of loss aversion states that the pain of losing is more potent than the pleasure of equivalent gains. In other words, losing a small amount of money will be a stronger motivator to attend the workout class than being rewarded the exact amount after the gymgoer completes a workout.

I asked myself whether this concept can be applied to anyone who performs a service for another. If a job isn’t completed well, should the company or employee lose a percentage of the quoted amount? In theory, and on the surface, it seems like this would be an effective incentivization to do an excellent job while not requiring more labor.

After all, if someone knows they will earn the same amount regardless of the quality of work, the incentive to do good work may fall. It seems like it would be especially true for people who don’t have an ownership stake in the company and might not care about its reputation. However, I always attempt to weigh both sides when possible. As I thought about it more, I realized this could ultimately cause an unnecessary amount of stress for anyone whose job falls subject to loss aversion. It’s also possible that the client or company could try to take advantage of the situation. The company would financially benefit from docking employee pay for subpar work, and the same goes for the client should they decide to withhold money.

Moreover, who, between the client and employing company, should stand to benefit from negligent work? There would have to be incontrovertible proof that a job was performed incorrectly or poorly. The simple solution is to take pictures before and after have a neutral third party judge the work quality, but that requires time and money.  On a related note, I strongly advise that anyone who has had work done should take photos of the area being renovated beforehand. It can be beneficial if a dispute arises.

Applying the principle of loss aversion to specific industries may be a terrible idea, and numerous logistical issues need to be considered, but it’s a thought. It would be easier if everyone took pride in their work, but that is not a reality, as everyone’s situation is different. I would love to hear what you think.

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