The Effect of Unstable Schedules on Unit and Employee Productivity

21 Pages Posted: 5 May 2021 Last revised: 29 Sep 2021

See all articles by Mahdi Hashemian

Mahdi Hashemian

Koc; MIT

Zeynep Ton

MIT Sloan School of Management

Hazhir Rahmandad

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: April 10, 2020

Abstract

Unstable schedules—hours that are inadequate, unpredictable (i.e., deviate from scheduled hours), or that vary from week to week—hurt employees. We examine whether they also affect financial performance. Using 52 weeks of data from over 1,000 stores and more than 15,000 employees of a specialty retailer, we estimate the effect of unstable schedules on employee and store productivity. We use an instrumental variable approach and a natural experiment to partially address the possible endogeneity of scheduling decisions. We find evidence that increasing the adequacy and consistency of employees’ hours improves employee and store productivity and find partial support for the positive effect of predictability. Our estimates suggest that improving adequacy has the largest productivity effect; having a typical employee work 24 hours a week instead of 13, without changing overall staffing levels, can increase her productivity by 10% to 29% in different estimations. Our findings highlight the unintended consequences of a narrow focus on matching labor supply to customer demand; incorporating hour adequacy, consistency, and predictability in scheduling decisions could not only create better jobs but also improve productivity.

Keywords: Hourly Employees, Schedules, Store Productivity, Hours, Schedule Consistency, Schedule Predictability, Instrumental Variables, Natural Experiment

Suggested Citation

Hashemian, Mahdi and Ton, Zeynep and Rahmandad, Hazhir, The Effect of Unstable Schedules on Unit and Employee Productivity (April 10, 2020). MIT Sloan Research Paper No. 6056-19, Available at SSRN: https://ssrn.com/abstract=3839673 or http://dx.doi.org/10.2139/ssrn.3839673

Mahdi Hashemian (Contact Author)

Koc ( email )

Rumelifeneri Yolu
34450 Sar?yer
Istanbul, 34450
Turkey

MIT ( email )

100 Main Street
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Cambridge, MA 02142
United States

Zeynep Ton

MIT Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

Hazhir Rahmandad

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main st.
E62-442
Cambridge, MA 02142
United States

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