David R. Henderson  

Undercover Boss: Government vs. Private

Do Labor Unions Promote the Mi... Kids and Happiness: The Sweet ...

In which the author makes some predictions.

My wife and I have watched about the last 4 episodes of "Undercover Boss" on CBS and are now hooked. All 4 have been private-sector for-profit companies and here's what I've noticed:

1. The vast majority of workers they highlight are hardworking, no-nonsense, productive people and are admirable just for that.
2. Many of the workers have their stories about whom they are working for: typically, a child in the family whom they want to have a better life than they had. And the stories are touching.
3. The boss typically messes up in various degrees in whatever job he's put in. I'm not sure what to make of that. Did you do well for first few days on a job that had any complexity? I remember when I worked in a nickel mine in northern Manitoba and I was a complete disaster--on the first shift. Second shift: much better.
4. The boss not only develops respect for his workers but also empathizes with many of them in their struggles. He typically has the company do something nice for them or, which I like even better, writes them a check for various causes out of his own bank account.

Why do I say all this? Because tonight the undercover boss will be the mayor of Cincinnati. While my reactions to both boss and employees have so far been overwhelmingly positive, I expect to be much more torn. Why? Two reasons. First, there are things government does that I think no one should do: drug busts and preventing people from cutting trees on their own property come to mind. Second, there are things government does that are legitimate but for almost all these I think the private sector should do it: running gymnasiums, repairing roads, and running fire departments come to mind. Also, even if we take as given that government is doing a legitimate activity, union agreements and other rules mean that the government as employer is often not in a position to make good reforms. With that in mind, here are some predictions for tonight:

1. Not only I but also many people who normally have my reactions will have much less positive a reaction to both the mayor and his employees.
2. Specifically, I expect that we won't be that impressed with the productivity of some of the government employees.
3. If the mayor wants to show empathy, I predict that he will not do it with his own bank account or even his mayor's expense account.
4. The mayor, even if he thinks of good reforms, will have his hands tied and will make cosmetic changes.

Of course, editing can take care of a lot of this. Who knows what ends up on the cutting-room floor with the private-sector employers?

Nevertheless, what are your predictions?

UPDATE: Steve Horwitz just sent me the following interesting link about how an economist (he says an Austrian economist but I would say any economist who understands the issue of local knowledge) might do "Undercover Economist." Great line:
"Rather than making bosses look incompetent for not knowing how things work, make them and the employees look smart by showing what can be gained by observing frontline operations."

Comments and Sharing

CATEGORIES: Labor Market

COMMENTS (10 to date)
Richard writes:

Blacks will be way overrepresented in the government work force, even considering the demographics of the city and especially compared to the private sector workforce.

Yancey Ward writes:

Seriously, these don't seem to be hidden cameras on this show, so are the employees just playing dumb, are truly dumb, or is the entire show a staged performance?

Sam writes:

I've read that for one episode, that the co-workers were told the crew was filming a documentary about an unemployed older man (e.g. the undercover boss) getting back to work at the entry level. Probably similar stories are given for others episodes.

However, Undercover Boss is now in its second season and had decent ratings-tens of millions of people have seen it, so you've got to wonder how well the cover stories are holding up these days.

Pandaemoni writes:

In one episode I saw, the Hooters episode, featured an almost caricaturish sexist pig of a manager routinely demeaning and sexually harassing his employees. The CEO thankfully put a stop to it, but that was one outlet among many and the CEO didn't implement across the board fixes. He just got rid of the one guy who was being a pig on camera, so who pretty much had to be dealt with from a simple marketing perspective.

Second, it strikes me that *of course* the employees are all diligent and hard working, since they know they are being filmed. Who wants to be shown to be lazy on film in a documentary?

I'd expect the city workers will be the same way, seemingly on the ball because they know they are being filmed. At the same time, I have known many firefighters and police, and none of them struck me as "unproductive" (save that, for firefighters, a large part of the job is "waiting around" until someone calls in a fire).

Alex Tabarrok writes:


You were spot on. It was clear--for better or worse--that the government employees were working less hard than many of the private sector employees featured on previous episodes (e.g. the ship waitress, the roto-rooter worker, the water technician at Belfor). Precisely because the government employees were less stressed, tonight's episode lacked the emotional ups and down of earlier episodes.

In earlier episodes you felt that the rewards at the end were bringing some justice to the world, a recognition of people who went above and beyond the call of duty. Who went above and beyond the call of duty tonight? You could even seen this in the workers themselves--there was less crying in this episode. It was clear that rather than feeling joy that their efforts were being recognized the workers felt lucky that they had won a prize but it was just a prize--not something tied to their identity. Giving the mechanic a motorcycle? It was like manna from heaven rather than a reward for a job well done.

Finally, I did feel that the gifting was a bit slimy. Hard to say what the mayor should have done but what is one to think when the mayor's "friends" give random workers checks for $10,000?

My bet is that the producers will see that tonight's episode did not work and we won't see more undercover mayors.

Pandaemoni writes:

@ Alex:

I think the difference is subjective. While none of the employees is in the incredibly stressed category, I am not sure why that suggests private employment is superior (rather than inferior) to public. Granted that if you think you can be fired or replaced at any moment by an uncaring management, that's a motivator to work hard, but I wouldn't want to work under that sort of stress. Employees SHOULD NOT be constantly on the verge of tears over their jobs (however convenient that may be for the cameras), and if they are, then the the bosses are terrible as managers, if not terrible as human beings.

They employees in this episode seemed to me to be reasonably dedicated to doing their work. They were not shirking or trying to weasel out of their responsibilities (at least on camera).

Again if you think the episode showed they were "unproductive" to use David's word, then I think we interpreted the evidence differently.

I do agree that the gifts seems stupid, but unlike you I always think that the gifts given at the end seem stupid. They improve noting save the recipient's mood for a little while, but never seem to answer of of the systemic problems any of the organizations (including Cincinnati) face. The van was a nice gift, but the $10,000 (which was applied to help the worker retire early) was simply dumb. In fact, if I had received the trip to New York plus $3K spending money, I'd have asked to trade for $10K with no strings attached.

The mayor did seem to find some ideas he thought worthy of trying out on a broader scale, but frankly setting budgetary priorities on the basis of the fact that a mechanic harangued him is just dumb. Neither a city nor a corporate budget should be set based on the random interactions the CEO happens to have on a reality TV show. If he had served in any city department and discussed the budget, they likely would have been the winner of this bizarre lottery. No doubt the mechanics work hard and provide an important service, but so do the teachers, firefighters, police, paramedics, courts, etc., all work hard with smaller budgets than they'd like.

Lars P writes:

Most reality shows are not very real at all. Strongly scripted and heavily edited.

You're probably learning what the show's creators set out to tell you, not discovering reality.

That said, I know nothing specific about this show, so this is non specific misanthropy.

mark writes:

Hello David,

The show is corny but kind of fun. David, I predict that your predictions will come true, in part, because you already have prejudged the show.
I would hope that any leader has many "random interactions" with front line employees and is influenced by these contacts.

Vinnie writes:

Last night was my first time ever seeing the show, so I have no basis for comparison. It didn't seem as staged as most reality shows, but obviously, anything done in the presence of TV cameras is, in some sense of the word, staged. Also, couldn't Mallory have discretely grown some actual facial hair in the few days prior to taping? The fake goatee looked like something you'd find at a gag shop.

When Mallory was handing out goodies to the participants, all I could think of were the city employees in every other department fuming and wondering when their GPS units were coming. And I know New York is expensive, but could that trip really be worth $7,000 in cash? That dude got hosed.

I guess the typical episode is a dressed-up PR stunt whereas this was a dressed-up campaign ad. I wonder which version I'd find more off-putting.

Nick writes:

Dr. Henderson,

I know you've already responded but I would like to address a point

3. The boss typically messes up in various degrees in whatever job he's put in. I'm not sure what to make of that. Did you do well for first few days on a job that had any complexity? I remember when I worked in a nickel mine in northern Manitoba and I was a complete disaster--on the first shift. Second shift: much better.

That's sort of the point of the show, in the past generally one might become the head of a department or company by starting in a low level position and working their way up. Showing aptitude at many aspects of the business got you promotions (hell even Michael Lewis book Liars Poker talks about wall street heavy hitters who started in the mail room!). Now we live in a credential-centric society where companies are managed by professional managers and it seems very difficult to break through to even middle management in many large firms without an MBA. I understand that its important for a CEO to know about finance and so on but judging from this show it seems many are completely oblivious with the basic day to day operations of the businesses they are charged with running.

A close friend of mine attended a very old and very prestigeous hotel management school in switzerland. In his first year I called to see how he was doing and he had said he was cleaning rooms, peeling potatos, serving food and so on. I asked why they had him doing all that instead of being in a class. He said the school's philosophy was that you must not only understand the duties of all of your charges, but master those duties, because it would be impossible to tell some one how to do a job which you are not familiar with.

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