The Labor Illusion: How Operational Transparency Increases Perceived Value

Ryan W. Buell; Michael I. Norton

Article | Management Science | September 2011

The Labor Illusion: How Operational Transparency Increases Perceived Value

Abstract

A ubiquitous feature of even the fastest self-service technology transactions is the wait. Conventional wisdom and operations theory suggests that the longer people wait, the less satisfied they become; we demonstrate that due to what we term the labor illusion, when websites engage in operational transparency by signaling that they are exerting effort, people can actually prefer websites with longer waits to those that return instantaneous results—even when those results are identical. In five experiments that simulate service experiences in the domains of online travel and online dating, we demonstrate the impact of the labor illusion on service value perceptions, demonstrate that perceptions of service provider effort induce feelings of reciprocity that together mediate the link between operational transparency and increased valuation, and explore boundary conditions and alternative explanations.

Keywords: Online Technology; Perception; Valuation; Service Delivery; Consumer Behavior; Performance Effectiveness; Customer Satisfaction; Service Industry;

Format: Print

16 pages

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Citation:

Buell, Ryan W., and Michael I. Norton. "The Labor Illusion: How Operational Transparency Increases Perceived Value." Management Science 57, no. 9 (September 2011): 1564–1579.

Working Paper | HBS Working Paper Series | 2020

Can Shared Service Delivery Increase Customer Engagement? A Study of Shared Medical Appointments

Ryan W. Buell, Kamalini Ramdas and Nazlı Sönmez

Customers and providers alike often consider one-on-one service delivery to be ideal, assuming –perhaps unquestioningly – that devoting individualized attention maximizes customer engagement and improves outcomes. Alternatively, shared service delivery, in which customers are served in batch, may, through the dynamics of group interaction, lead to increased customer engagement. On the other hand, the loss of privacy and personal connection in shared delivery models may undermine engagement and performance. To explore this tradeoff, we conducted a randomized controlled trial with 1,000 patients who were undergoing glaucoma treatment over a three-year period at a large eye hospital. Using verbatim and behavioral transcripts from over 20,000 minutes of video recorded during our trial, we examine how shared medical appointments (SMAs) – in which groups of patients with similar conditions meet with a doctor simultaneously, and each receives one-on-one care in turn – impact patients' engagement during their appointments. Patients who experienced SMAs asked 37.2% more questions per minute, made 8.2% more comments per minute, answered 3.6% more questions per minute, and exhibited higher levels of non-verbal engagement across a wide-array of measures (attentiveness, positivity, head wobbling or ‘talai taḷḷāṭṭam’ in Tamil – a South Indian gesture to signal agreement or understanding – eye contact and end-of-appointment happiness), relative to patients who attended one-on-one appointments. We further find that patients in SMAs went on to report higher levels of satisfaction and exhibit greater levels of learning and medication compliance. These results shed light on the potential for shared service delivery models to increase customer engagement and enhance service performance.

Citation:

Buell, Ryan W., Kamalini Ramdas, and Nazlı Sönmez. "Can Shared Service Delivery Increase Customer Engagement? A Study of Shared Medical Appointments." Harvard Business School Working Paper, No. 21-001, July 2020. View Details

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The 2010 Patient Protection and Affordable Care Act intensified debates over the role of government in the distribution of healthcare. A nationally-representative sample of Americans reported their estimated and ideal distributions of healthcare (unmet need for prescription medications) and death (gains in life expectancy). Respondents across the demographic and political spectrum wanted mortality and healthcare to be distributed more evenly among the rich and poor than they estimated them to be. For example, respondents estimated that Americans in the poorest quintile lived 1.5 months longer over the previous 20 years while those in the richest quintile lived 4.7 months longer, but reported ideal figures of 2.5 and 3.6 months – both were far more equal than the actual figures: -1.8 and 7.2 months. Despite heated debates about healthcare, Americans share a consensus belief that current disparities in death and healthcare are far from their ideals.

How do the very wealthy spend their time, and how does time use relate to well-being? In two studies in the Netherlands, the affluent (N=863, N=690) and the general population (N=1232, N=306) spent time in surprisingly similar ways, such as by spending the same amount of time working. Yet, the nature of their time-use differed in critical ways that are related to life satisfaction. In Study 1, millionaires spent more time engaged in active leisure (e.g., exercising and volunteering) rather than passive leisure (e.g., watching television and relaxing). In Study 2, millionaires spent more time engaged in tasks at work over which they had more control. The affluent sample belongs to the top of the income and wealth distribution, representing a significantly wealthier sample than in previous studies. These results further our understanding of when and how wealth may translate into greater well-being.

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The Labor Illusion: How Operational Transparency Increases Perceived Value

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