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We study employee productivity (output per hour worked) before and during the working from home period of the Covid-19 pandemic, using personnel and analytics data from over 10,000 skilled professionals at a large Indian IT services company. Hours worked increased, including a rise of 18% outside normal business hours. Average output declined slightly and employee productivity fell 8-19%. We then analyze determinants of changes in productivity. An important source is higher communication costs. Time spent on coordination activities and meetings increased, while uninterrupted work hours shrank considerably. Employees networked with fewer individuals and business units, both inside and outside the firm. They received less coaching and 1:1 meetings with supervisors. The findings suggest key issues for firms to address in implementing remote work.
We study a field experiment at a large technology company. Employees were encouraged to submit ideas on process and product improvements. The company randomly assigned 19 teams into treatment and control groups. Treatment team employees received rewards if their ideas were approved. Nothing changed for control team employees. Our main finding is that rewards substantially increased the quality of ideas. Rewards increased participation in the suggestion system but decreased ideas per participating employee, with zero net effect on the quantity of ideas. Broader participation persisted after the reward was discontinued, suggesting habituation. We find no evidence for motivational crowding out.
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