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  • 2022
  • Working Paper
  • HBS Working Paper Series

An Anatomy of Performance Monitoring

By: Achyuta Adhvaryu, Anant Nyshadham and Jorge Tamayo
  • Format:Print
  • | Language:English
  • | Pages:86
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Abstract

Performance monitoring is a mainstay management tool in most organizations. Yet we still know little about whether—and why—better monitoring yields better performance in practice. To shed light on these questions, we study the introduction of a performance monitoring technology that enabled managers to track the progress of drive-thru orders in real time in a large quick-service restaurant chain in Puerto Rico. Sales increased by nearly 5%, but this rise was on average short-lived: impacts diminished to roughly half their initial magnitude within two months. Investment in and depreciation of worker skills play an important role in explaining this pattern. Managers responded to the availability of real-time data on bottlenecks by providing greater training inputs to workers at key workstations, particularly in the kitchen. But only a subset of managers provided “refresher” training to counteract skill depreciation over time. Conditional on baseline store productivity-by-time interactions to account for dynamic effects of general managerial quality, stores in which managers utilized refresher training intensively prior to the technology implementation had more persistent gains in sales, suggesting that managers’ attention and responses to worker skill dynamics matter for productivity. These results provide a look inside the “black box” of the management-productivity relationship, and highlight the critical role of on-the-job human capital investment in realizing and sustaining productivity gains from better performance monitoring.

Keywords

Performance Monitoring; Worker Skills; Skill Depreciation; Managerial Inattention; On-the-job Training; Productivity; Multitasking; Quick Serve Restaurants; Performance Evaluation; Employees; Competency and Skills; Training; Performance Productivity; Management; Information Technology; Food and Beverage Industry; Puerto Rico

Citation

Adhvaryu, Achyuta, Anant Nyshadham, and Jorge Tamayo. "An Anatomy of Performance Monitoring." Harvard Business School Working Paper, No. 22-066, March 2022. (R&R Journal of Political Economy.)
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About The Author

Jorge Tamayo

Strategy
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  • Human-Computer Interactions in Demand Forecasting and Labor Scheduling Decisions By: Caleb Kwon, Ananth Raman and Jorge Tamayo
  • How Do You Compete and Cooperate? Understanding Strategic Interactions By: Jorge Tamayo
  • Arcos Dorados’ Quest for the Digitalization of Last-Mile Delivery in Colombia (B) By: Jorge Tamayo, Jenyfeer Martinez Buitrago and Mariana Cal
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