Journal Article

When Does the Devil Make Work? An Empirical Study of the Impact of Workload on Worker Productivity

Tan, Tom Fangyun, Netessine, Serguei

2014

Overview

We analyze a large, detailed operational data set from a restaurant chain to shed new light on how workload (defined as the number of tables or diners that a server simultaneously handles) affects servers' performance (measured as sales and meal duration). We use an exogenous shock-the implementation of labor scheduling software-and time-lagged instrumental variables to disentangle the endogeneity between demand and supply in this setting. We show that servers strive to maximize sales and speed efforts simultaneously, depending on the relative values of sales and speed. As a result, we find that, when the overall workload is small, servers expend more and more sales efforts with the increase in workload at a cost of slower service speed. However, above a certain workload threshold, servers start to reduce their sales efforts and work more promptly with the further rise in workload. In the focal restaurant chain, we find that this saturation point is currently not reached and, counterintuitively, the chain can reduce the staffing level and achieve both significantly higher sales (an estimated 3% increase) and lower labor costs (an estimated 17% decrease). This paper was accepted by Noah Gans, special issue on business analytics .

• Publisher: INFORMS,Institute for Operations Research and the Management Sciences
• Subject: Analysis / Behavior / behavioral operations management / Business analytics / Call centers / Chain restaurants / Chain stores / Computer software / Decision making / Diners / econometrics / Empirical research / empirical study on staffing / Employee productivity / Employees / Human resource management / Impact analysis / Instrumental variables / Instrumental variables estimation / Labor costs / Labor productivity / Labor relations / Labour costs / Labour productivity / Management / Meals / Observational studies / Operations management / Organizational behavior / Organizational behaviour / Productivity / Quality of service / quality/speed trade-off / restaurant operations / Restaurants / Sales / Saturation / Servers / Software / Staffing / Studies / Supply & demand / Supply and demand / U.S.A / Values / Work / worker productivity / Workers / Workforce planning / Workloads