Behavioral Economics for Leaders

CHAPTER 19Peer Pressure Productivity: Employees Are Influenced by the Productivity of Others Around Them

A company's success depends on the motivation of employees to do their work quickly and thoroughly. In the case of fixed wages, there may be incentives not to make too much of an effort to maintain an easy work life. Social norms help to keep productivity high even in such cases.

“At last, the weekend!” Caroline thinks. She just needs to do some shopping at the supermarket for the weekend, and then she'll enjoy the afternoon with friends outdoors. At the supermarket she has collected all she needs and is pushing her shopping cart to the checkout. As always on Saturdays, the lines are fairly long. She chooses the seemingly shortest line in front of a checkout with a young cashier. Progress is pretty slow. Customers at the other checkouts are processed much faster. This isn't the first time something like this has happened to Caroline. Once more, she is annoyed at herself for choosing the wrong checkout. Apart from her seeing herself as an eternally unlucky person, she asks herself why the various cashiers cannot be equally fast and if their working speed could be increased.

The manager of the supermarket asks herself the same questions. How work productivity can be boosted is something fundamental to businesses. But it's quite natural that not all employees are equally productive. However, there might be ways to increase the productivity of individual employees. Whether and ...