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Service level agreement: Difference between revisions
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Now, unless you are a fool, your starting assumption must be that ''a paid agent will do as little as he humanly can to comply with the most pedantically literal possible reading of your agreement''. To do a stroke more is economically irrational (so sayeth the Smiths, Friedmen and Hayeks of economic history). Your [[service provider]] has agreed a fixed fee for its services, it is his sole and constant interest to expend as few resources as are humanly possible to earn that fee. | Now, unless you are a fool, your starting assumption must be that ''a paid agent will do as little as he humanly can to comply with the most pedantically literal possible reading of your agreement''. To do a stroke more is economically irrational (so sayeth the Smiths, Friedmen and Hayeks of economic history). Your [[service provider]] has agreed a fixed fee for its services, it is his sole and constant interest to expend as few resources as are humanly possible to earn that fee. | ||
The difference between the fee and those resources is his profit margin. A free agent is exclusively focused on what it does ''not'' have to do. This, and only this, is what he turns up for. | The difference between the fee and those resources is his profit margin. A free agent is exclusively focused on what it does ''not'' have to do. This, and only this, is what he turns up for. | ||
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But yet there is more, for whomsoever your vendor does send along — whom you should assume will be the [[cheapest-to-deliver]] unit for whatever level of service you ''have'' contracted for — will enjoy precisely the same fundamentally disinterested relationship with ''her'' contracting counterparty — your vendor — as it does with you. So you have a human who couldn’t give more than a salutary wave about the performance standard she owes her principal, who is maximally incentivised to do as little as it humanly can to limp over the threshold of your minimum performance standard. | But yet there is more, for whomsoever your vendor does send along — whom you should assume will be the [[cheapest-to-deliver]] unit for whatever level of service you ''have'' contracted for — will enjoy precisely the same fundamentally disinterested relationship with ''her'' contracting counterparty — your vendor — as it does with you. So you have a human who couldn’t give more than a salutary wave about the performance standard she owes her principal, who is maximally incentivised to do as little as it humanly can to limp over the threshold of your minimum performance standard. | ||
===A cosmic agency problem=== | |||
This is, of course, simply an articulation of the age-old “[[agency problem]]”. Yes, it is true: an [[employee]] is ''also'' an [[agent]], but at least she has a notional [[Uberrimae fidei|duty of good faith]] and some kind of gravitational proximity to her employer that at least bends her trajectory towards its better interests. Now let us extend that cosmological metaphor. If an employee directly orbits her employer’s sun, even though an agent and thus always running at ''some'' kind of tangent to her employer’s best interests she can at least be predicted, and that errant course is largely pulled around by the employer’s gravitational mass. An ''outsourced contractor'', by contrast, is an [[agent]] thrice as far removed. He orbits a different satellite altogether (his contracting service provider), which in turn orbits that employee in minute [[epicycle|epicycles]] so, from the point of view of the best interests of the, ah, ''stellar'' employer, his trajectory ''eccentric''. | |||
{{Outsourcing}} | {{Outsourcing}} | ||
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*[[Agency problem]] | *[[Agency problem]] | ||
{{ref}} | {{ref}} | ||
{{c2|Cosmology|Metaphor}} | |||