Undercover Economist

September 24, 2010 11:30 pm

Dear Economist: How can I guarantee a good reference?

How can we motivate my tutor to be fair and accurate, and compensate him for his time?

My old university tutor often complains when he has to write references – they take up a lot of his time, and he doesn’t get paid for them. Since he’s doing my prospective employer a service, he thinks they should pay him. However, that means he’s motivated to write me a bad reference, because then I won’t get the job, and I’ll ask him to write me another one – so he gets paid again. Of course, we could say that he only gets paid if I get the job – so he writes me an overly gushing reference. How can we motivate my tutor to write a fair and accurate reference, and compensate him for his time?

Phil C, Aylesbury

Dear Phil,

I am not as concerned as you that your tutor will be tempted into hustling for extra reference-writing work. If he wanted to be paid for mass-mailing hyperbole, he’d have taken a job in public relations.

But there is a deep problem here: your tutor has useful information about you and no particular reason to tell the truth. I am not sure what to suggest. Economists call the problem “mechanism design” and despite a number of recent Nobel prizes and some formidable mathematical theorems, I’ve seen nothing to suggest that I can solve the problem perfectly.

However, one approach is to ally your tutor’s interests with those of your prospective employer. Perhaps he could be awarded a commission: 0.1 per cent of your salary, for as long as you have the job. A couple of hundred successful candidates placed and the sums involved start to build up. If he over-eggs the reference and places you in the wrong job, you won’t last long and he’ll miss out on years or decades of future commission.

I don’t know if this would work, but it has a nice side-effect. It encourages your tutor to teach you something useful: he’ll be getting a cut of the proceeds.

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