Read the working paper
INSEAD Working Paper 2015/88/TOM
We examine a large operational data set in a casual restaurant setting to study how coworkers’ sales ability (measured as servers’ sales premium) affects workers’ performance in terms of service speed and service quality. We find that servers react non-linearly to their coworkers’ ability. In particular, when coworkers’ overall sales ability is low, increasing this ability may trigger servers to redouble both upselling and cross-selling efforts at the expense of slower service speed. When overall coworkers’ ability is high (approximately one standard deviation $1.02 above the sample mean of $0.02), however, further increasing their ability may stimulate servers to accelerate their service at the expense of reduced sales efforts. Our empirical findings imply that managers should mix servers having heterogeneous ability levels during the same shift. Through a counterfactual analysis, we find that considering the inverted-U-shaped peer effects to optimize current servers’ schedules without changing their capacity may increase total sales by 2.7%.