Saturday, September 20, 2008
Promoting picking productivity
Slate has published an excellent article on how a farmer teamed up with economists to maximise output from his strawberry picking labour force.
"...getting the most out of staff is a perennial problem. Workers show up for the summer harvest only... the owner, who must offer a pay scheme that both satisfies minimum-wage laws and motivates workers in an industry in which slacking is an understandable temptation."
"...an unlikely alliance was formed between Farmer Smith and economists Oriana Bandiera, Iwan Barankay, and Imran Rasul. The economists would design and administer pay schemes, and in exchange Farmer Smith would let them treat his business as a gigantic laboratory for researching the nexus between pay, workplace friendships and workers' productivity."
"The researchers found that managers tended to do their friends favours by assigning them the easiest rows. This made life comfortable for insiders but was unproductive since the most efficient assignment for fruit picking is for the best workers to get the best rows. The researchers responded by linking managers' pay to the daily harvest. The result was that managers started favoring the best workers rather than their own friends, and productivity rose by another 20 percent."
"They proposed a "tournament" scheme in which workers were allowed to sort themselves into teams... Again, workers prioritized money over social ties, abandoning groups of friends to ally themselves with the most productive co-workers who would accept them. In practice, that meant that the fastest workers clustered together, and again, productivity soared—by yet another 20 percent."