Shift Bidding
Shift bidding is a method of dividing up work in a way that gives priority to the preferences of the workers themselves. So far it has been used mainly in hospitals as a way to fill nursing shifts that are hard to fill like the graveyard shift. The way it works is this: nurses go to their computers and bring up a website that shows the unfilled shifts for the next week. Then they get to decide what shifts they would like to bid on, entering an hourly wage for that shift. The administrator of the website then chooses the person who has submitted the lowest hourly wage to fill a particular shift. This works to the advantage of the nurses since they can pick and choose what shifts they want to work, in what departments and for what wages. It works to the advantage of the hospital because they must seek nurses from an agency for unfilled shifts which generally costs them more money since the agency tacks on their fee to the hourly rate. On the other hand nurses can usually make more than their usual rate and still, the hospital will not have to pay as much as the agency rate.
The nurses get to choose the department they want to work in and, since they are usually associated with the hospital to begin with, are more dedicated than contract nurses from the agency. Let’s say, for example, the normal daily rate is $35. per hour, and the agency rate is $50. per hour. A nurse might bid $40. per hour for a particular shift. If this is the low bid, the nurse will get to work that shift for that rate. This enables nurses to be part time workers or to work extra shifts for extra money depending on their personal circumstances. Even though they’re still employees of the hospital, for all intents and purposes, they’re contract workers when they do shift bidding. This works well because there is a nursing shortage, and they can bid up the price of labor. If there were a surplus of nurses, they would actually end up bidding down the hourly rate by shift bidding. Of course, the nurses must have the proper credentials for the area they wish to work and bid on. The advantages to the nurses are that they get to determine their own work schedule, make extra money and work when it’s convenient for them.
The shifts might be at multiple hospitals, involve
a variety of different categories of credentials and be of varying lengths. At Spartanburg
Regional Healthcare System in
“Offering up extra shifts to in house nurses saves an
average of $10,000 per week,
Shift bidding is a
rudimentary form of Preferensism
whose slogan is “from each according to his preferences and to each according
to her preferences.” Let’s consider how this rudimentary system could be
expanded into a more general Preferensist system. Preferensism is a combination
of social choice and utilitarianism. Social choice involves
the aggregation of individual preferences to come up with an overall choice for
society. This is done in such a way as to give each individual the highest
preference possible consistent with the constraint that, in this case, all the
shifts get filled. Of course, if no one bids on a particular shift, then an
agency nurse must be obtained. One could also imagine an additional constraint
which would be an overall budget. The totality of all accepted bids would have
to be less than or equal to the budget
Let’s consider an
example in which there are 6 nurses: Alice, Betty, Cathy, Diane, Elaine and
Frances. Let’s say there are 6 different shifts: shift 1:
The job of the
software is to take all the nurses preferences as inputs, consider all
combinations of preferences, give each nurse as high a preference as possible
while staying at or under budget, and, if there are a number of ways to do
this, choose that one that minimizes the inequality of preferences received
among the nurses. Notice that we’re not trying to minimize the hospital’s pay
out, but we are trying to maximize the nurses’ preference utility by giving
them as high a preference as possible while minimizing the inequality among
them. Preference utility is defined as (number of allowed preferences
-preference attained). In this example if
Let’s consider the
inputs of our 6 nurses each of whom find themselves in different circumstances.
Alice, a single Mom, needs to work a regular day shift due to the fact that she
has a family to support and needs to be home with them at night. She will bid
on shift 4 later but for now let’s just consider her first bid. Her preferences
are the following:
1)
Shift 3 at $45.
2)
Shift 3 at $43.
3)
Shift 3 at $41.
4)
Shift 3 at $38.
5)
Shift 3 at $35.
6)
Shift 3 at $32.
Betty
has a husband who works, no kids and only needs to work part time. She likes to
be home in the evenings with her husband so she won’t work shifts 5 or 6. Her
preferences are the following:
1)
Shift 4 at $45.
2)
Shift 3 at $45.
3)
Shift 1 at $50.
4)
Shift 2 at $50.
5)
Shift 3 at $40.
6)
Shift 4 at $40.
Cathy
is a single woman who doesn’t mind working odd shifts. Her preferences are as
follows:
1)
Shift 5 at $50.
2)
Shift 6 at $50.
3)
Shift 2 at $50.
4)
Shift 1 at $50.
5)
Shift 1 at $45.
6)
Shift 5 at $45.
Diane
needs to work 2 shifts but is very flexible. She’ll bid on her second shift
later. For now her preferences are as follows:
1)
Shift 1 at $40.
2)
Shift 2 at $40.
3)
Shift 3 at $35.
4)
Shift 4 at $38.
5)
Shift 5 at $40.
6)
Shift 6 at $40.
Elaine
only wants to work one shift in the evening since she has another job during
the day and needs extra money to pay off bills:
1)
Shift 5 at $45.
2)
Shift 5 at $40.
3)
Shift 5 at $35.
4)
Shift 5 at $30.
5)
Shift 6 at $45.
6)
Shift 6 at $40.
1)
Shift 1 at $50.
2)
Shift 1 at $43.
3)
Shift 1 at $41.
4)
Shift 1 at $39.
5)
Shift 1 at $37.
6)
Shift 1 at $35.
Now
computer software would systematically consider every combination, consider
that every shift was covered, and consider whether that combination was above
or below budget. It would then throw out every combination that was over
budget, and choose those combinations that maximized preference. If more than
one combination did this, it would then choose the one that minimized
inequality which would be defined as the absolute value of the differences for
each individual of their attained utility and the average utility. The closer
each individual’s utility is to the average utility, the less would be the
inequality for that individual. The sum of the individual inequalities would be
the social inequality.
Let’s
consider a few combinations on an ad hoc basis and see if we can come up with
one that meets our criteria.
Shift
1:
Shift
2: Cathy at $50., her third preference.
Shift
3:
Shift
4: Betty at $45., her first preference.
Shift
5: Elaine at $45., her first preference.
Shift
6: Diane at $40., her sixth preference
The
total pay out would be $275. Oh oh. This is $5. over the hospital’s budget.
We
could give
Shift 1:
Shift 2: Cathy at $50., her third preference.
Shift 3:
Shift 4: Betty at $45 here first preference.
Shift 5: Elaine at $40., her second preference.
Shift 6: Diane at $40., her sixth preference.
Now
we ask could we make any changes that would increase anyone’s preference
utility without going over budget? Yes we could switch Cathy and Diane giving
Cathy shift 6 and Diane shift 2. This would result in an increase in preference
utility for both of them. We now have:
Shift
1:
Shift
2: Diane at $40., her second preference.
Shift
3:
Shift
4: Betty at $45 here first preference.
Shift
5: Elaine at $40., her second preference.
Shift
6: Cathy at $50., her second preference.
Again
we are right on budget at $270., and we have 3 first and 3 second preferences.
I think this is the best we can do with the assumptions we’ve made. If any
slots had remained unfilled, we could have raised the maximum bid to $55.00 as
the day we are bidding on grew closer in order to see if there were any takers
at that maximum rate which would still be less than the agency rate of $60..
Our
total preference utility is 5x3 + 4x3 = 27 out of a possible 30. Our average
utility is 4.5, and our inequality is 3.
Now
let’s consider how this model could be generalized. First there could be more
than one position to fill for each time slot, and the algorithm could consider
maximizing preference utility and then minimizing inequality over the total
number of positions. Second, we could have considered maximizing utility and
minimizing inequality over a longer period of time like a week. Other than that
we have a pretty good model of how job selection in Preferensism would work.
However, in this particular example the law of supply and demand is in favor of
the nurses if there is a nursing shortage. If there were an over supply of
nurses, they would be bidding their hourly rate down below what would be
acceptable. What constraints would there be in Preferensism that would
constrain the law of supply and demand? If there were an oversupply of labor,
labor would be shifted out of nursing and into some other field so that the
demand for labor would be in balance with the supply. Then the total budget
would be determined by consumer demand for healthcare. The goal is to keep a
balance between supply and demand, with the average wage determined by the
average demand.
In
capitalism profits are generated by keeping the supply of labor greater than
the demand for labor thus driving the total cost of labor down, and, since
labor is one of the inputs to the production process, for any given amount of
revenues and since profits equal revenues minus costs, profits will go up as
aggregate labor costs go down. Therefore, it is advantageous to the capitalist (or
owner of an enterprise) to have as large a labor supply as possible. This is
why so many business owners favor immigration, legal or otherwise. It should be
pointed out that profits will also increase as the aggregate cost of materials
used in the production process decreases as well. Therefore, a capitalist who is
able to make better deals in acquiring necessary materials will make greater
profits as well. In Preferensism there is no need for profit, and individuals
can only become wealthy through their work. Profit as a source of wealth is
eliminated, but risk is also eliminated. Profits accrue to all more or less
equally and risk is borne by all more or less equally.