Shifting top employees to slower production lines to meet a demand surge might not yield the intended results. Research by Jorge Tamayo reveals how smart staffing can make all the difference
There is a tension between keeping up productivity and retaining these large clients you can’t afford to lose.
Image: Francis Mascarenhas / Reuters
Companies are often eager to land the big fish—a massive order that will boost production and revenue. Yet firms might not understand the costs of serving a large buyer, says Jorge Tamayo, an assistant professor at Harvard Business School.
“We know very little about how the firm needs to adjust internally when they are working with a buyer that is so large, and the [firm] cannot fail [in delivering on the order],” he says.
Examining worker-level productivity data from a large readymade garment manufacturer, with 50 factories and over 100,000 employees in India, Tamayo and his fellow researchers found that when the company received a large order, managers regularly shifted the most talented workers to the slowest production lines in an attempt to keep up with demand.
There is a tension between keeping up productivity and retaining these large clients you can’t afford to lose.
While doing so ensured no single production line fell too far behind, separating the best workers from the managers who kept their lines running smoothly caused overall productivity to drop significantly.
This article was provided with permission from Harvard Business School Working Knowledge.