The agency problem with regards to a standards system is often discussed in terms of monitoring behavior to reduce costs associated with underperforming. However, the opposite behavior of over-performing should also be anticipated in some professional settings where standards are employed. For example, assume a new staff member in a professional services firm is given a job to complete and the new staff member is told that the standard time expected for the work based on the experience of previous years is 15 hours. In this example, lets say the new staff member spent a total of 21 hours to complete the work. This staff member might decide to remain after hours in the workplace to work hours that will not be recorded when the staff member accounts for the time worked. In this example, when 21 hours were spent by the staff member to complete the job, assume the new staff member decided to work 6 six hours off the clock (six hours is the amount of personal after-hours time the employee spent doing the work and only 15 hours of work during regular office hours were actually recorded as part of the staff members time log).

1. What might motivate the new staff member to work 6 hours off-the-clock and not account for this time? Answer in the space below.

2. Since the professional services firm is gaining performance rather than losing time, are there any reasons to be concerned about this practice? Answer in the space below