Peers at Work

TLDR

The study investigates how a worker’s productivity depends on the productivity of teammates in the same team. High‑frequency data from a supermarket chain show that adding highly productive staff boosts shift productivity, workers increase effort when they see productive teammates—especially those they interact with frequently—indicating that social pressure can partially internalize free‑riding externalities. JEL codes: J24, L81, M54.

Abstract

We study peer effects in the workplace. Specifically, we investigate whether, how, and why the productivity of a worker depends on the productivity of coworkers in the same team. Using high-frequency data on worker productivity from a large supermarket chain, we find strong evidence of positive productivity spillovers from the introduction of highly productive personnel into a shift. Worker effort is positively related to the productivity of workers who see him, but not workers who do not see him. Additionally, workers respond more to the presence of coworkers with whom they frequently interact. We conclude that social pressure can partially internalize free-riding externalities that are built into many workplaces. (JEL J24, L81, M54)