Operations, Information and Decisions Papers

Document Type

Technical Report

Date of this Version

6-2014

Publication Source

Management Science

Volume

60

Issue

6

Start Page

1574

Last Page

1593

DOI

10.1287/mnsc.2014.1950

Abstract

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).

Copyright/Permission Statement

Originally published in Management Science © 2014 INFORMS

This is a pre-publication version. The final version is available at http://dx.doi.org/10.1287/mnsc.2014.1950

Keywords

econometrics, empirical study on staffing, worker productivity, business analytics, restaurant operations, behavioral operations management, quality/speed trade-off

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Date Posted:09 July 2018

This document has been peer reviewed.