Social Interactions and Worker Productivity: Firm Level Evidence

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Tinker Research Reports, Summer 2013

 

Social Interactions and Worker Productivity: Firm Level Evidence

The main goal of this project is to obtain clean estimates of the role that social interactions play in determining worker productivity. To do this, my coauthor and I are partnering with a large company in Brazil to design and implement interventions that will increase productivity and that will allow us to estimate how much of the increase in productivity is due to varying degrees of social connections. To the best of our knowledge, this topic has not been studied in an experimental manner even though its implications for productivity and worker welfare are important.

The setting is a manufacturing plant that employs 5,000 workers in northeastern Brazil. Production in this plant takes place in groups of 20 workers. These production units are often producing the same good and are led by a unit boss who allocates tasks and helps workers throughout the process. Importantly, the firm is undergoing a restructuring process aimed at increasing worker productivity, with many training programs and interventions taking place. My coauthor and I had been in discussions with the plant’s manager about working together in implementing some of the interventions, while at the same time collecting data that could be mutually beneficial.  During this summer, we visited the plant for four weeks. Our main goals were to formalize our working relationship with the firm, obtain important information and data, and start setting up the stage to successfully conduct the study. In every respect, our visit to the factory was a success.

The most important benefit from our visit was the opportunity to familiarize ourselves with the setting and production processes in the plant. Our physical presence allowed us to obtain first-hand knowledge of the day-to-day activities of workers and their bosses. This, in turn, has allowed us to better assess the feasibility of our project and adjust our plans accordingly.

During our visits, the plant’s management graciously gave us tours of every department in the plant, and allowed us to have private talks with all mid-level managers in charge of the many different departments. Most importantly, they also gave us access to the production floor, where we were able to observe and interact with workers during their daily activities. We were able to spend hours following the production processes and observing different working groups, talking to workers and group-bosses alike.  We were also allowed to have lunch with many of the workers in the factory dining hall and have long conversations with them during their breaks. These interactions provided us with invaluable knowledge about the plant operations and the relationships between bosses and workers.

The visit also helped us consolidate our working relationship with the firm’s management. We were able to meet with most of the high-level managers and present our ideas. The local business culture in this factory highly values personal interactions, and our presence there helped establish mutual trust and signal our commitment to the project. All the managers were very supportive and showed great interest in our ideas. They provided us with confidential data about their business practices. These included data on daily productivity figures, personnel data from the Human Resources department, detailed layouts of each plant, and information about several training programs in which workers and management interacted together. My coauthor and I are currently processing this data for a preliminary analysis on the effect of past training programs on productivity and how this effect varied with the time workers and bosses had been working together (prior to the intervention). We hope to present these preliminary results to the firm’s management in the next few months.

Alternatively, we are also working with the managers to randomize the timing of the rollout of an upcoming training program, as well as the level of interaction between bosses and workers during the training. Such intervention, if applied properly, will allow us to obtain experimental estimates of the productivity effects of two types of social connections: those between workers (horizontal), and those between workers and their unit‐heads (vertical). The richness of the data would also allow us to further study how this affects productivity through channels such as better cooperation (among workers), better diffusion of knowledge, and better allocation of tasks (from bosses to workers).  

The project is still ongoing and the outlook is promising. My coauthor is currently back in Brazil discussing ways to modify these upcoming training interventions. We expect new training interventions to be implemented at the beginning of next year.

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