Companies could make their employees more productive by having them work with hardworking friends according to new research published today (Friday 26 February).
Researchers found that employees worked harder when they worked with friends who were more industrious than themselves, compared with when they worked with people who were not their friends. However, employees were significantly less productive when they worked with friends who were less hardworking than themselves.
The research paper 'Social Incentives in the Workplace', which is published in the Review of Economic Studies, looked at the productivity of fruit pickers and their networks of friends on a farm. Workers were asked to name up to seven friends. They were then observed on days when they worked alone to form an estimate of their average productivity and this was compared to their performance when they worked with friends(1).
One of the authors of the research, Professor Oriana Bandiera from the London School of Economics, said: 'Our research suggests that getting people to work with their friends could be one way for companies to motivate their workers without necessarily paying them more. However, this approach needs to be exercised with care since friends in the work place can be a good or a bad influence. '
According to the research, whether friends combined productivity was lesser or greater when they worked together or individually depended on their initial ability levels. For example, an extremely slow friend could cancel out the good influence of a faster worker.
The overall effect on a company's performance of having friends work together depends on the balance of the workers' ability across the firm.
Professor Iwan Barankay a co-author from the University of Pennsylvania explains: 'If most people in a company are slow, the friendship effect will actually slow down the few "star" workers. If this is the case it would be better to have the hard workers work by themselves as opposed to with a friend.'
An average worker was 10 per cent more productive when working with a friend who was more able than themselves. In contrast, workers who were more able than their friends were 10 per cent less productive when they worked with their friends. Because workers were paid a piece rate per kilogram of fruit picked, this corresponded to an increase or loss of earnings.
The researchers put their findings down to the desire of friends to socialise rather than being a side effect of friends cooperating to get the job done faster since fruit picking is individual work.
Professor Imran Rasul from University College London, another of the co-authors said: 'These fruit pickers work in rows. So if they go at the same speed as their friends they get to chat. If one is faster and shoots ahead, that's clearly not possible.
'Our research is also applicable to other types of work. If you are an administrator filling in forms, for example, the number of forms you complete will depend on how long you spend chatting to your colleague, and that will also affect your colleague's work rate. '
On the farm studied the researchers found that productivity would have only increased by 2.6 per cent if they had kept friends together at all times. The authors note that this may not have led to an increase in profits if there was a cost related to reducing the flexibility of the workforce.
Notes to editors
(1) For example, 'Alan' is observed when he works alone to discover his average productivity. He is friends with 'Beth' and 'Charles'. Beth is the more productive than 'average' Alan and Charles is less able then 'average' Alan. The researchers found that 'Alan' is 10 per cent more productive when he works with Beth than when he works alone. When he works with Charles he is 10 per cent less productive than when he works alone.
Oriana Bandiera is an associate professor in the Department of Economics at the London School of Economics and Political Science
Iwan Barankay is an associate professor of management at The Wharton School, University of Pennsylvania
Imran Rasul is professor of economics at University College London
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26 February 2010