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Dissertation Information for Sarvanan Devaraj

NAME:
- Sarvanan Devaraj

DEGREE:
- Ph.D.

DISCIPLINE:
- Operations and Management Science

SCHOOL:
- University of Minnesota, Twin Cities (USA) (1997)

ADVISORS:
- None

COMMITTEE MEMBERS:
- None

MPACT Status: Incomplete - Not_Inspected

Title: Impact of performance evaluation and technology interdependence on productivity and quality

Abstract: A recent trend in manufacturing operations is the elimination of individual-level labor reporting in evaluating worker productivity. While the practitioner literature has taken the lead in advocating this elimination of individual-level performance evaluation, there is no systematic documented evidence to suggest that individual-level information is not valuable to monitor and evaluate workers effectively. In fact, theoretical information economics models suggest that information about the worker's (agent) effort level is valuable to the manager (principal) to monitor workers effectively. Based on these theoretical models, we develop hypotheses relating the elimination of individual-level performance evaluation to productivity and quality.

At our research site, several of the plants eliminated individual-level performance evaluation, while others maintained the existing system. Thus, we were provided with pseudo-experimental and control plants to examine the effect of the change. We analyze longitudinal data for a recent 3-year period collected from these plants. Empirical evidence is provided about the impact of eliminating individual-level performance evaluation on labor productivity, total factor productivity, as well as various measures of quality.

The next stage considers the moderating impact of contextual factors on performance evaluation. The need to integrate technological issues with organizational policies, such as performance evaluation systems, has been recognized in the literature to be critical to the success of organizations.

This study proposes that a critical underlying dimension of the technological environment is 'interdependence' or the extent to which the items or elements upon which work is performed or the work processes themselves are inter-related. Furthermore, it identifies technology and material interdependence as being central to moderating the effectiveness of performance evaluation methods. Hypotheses are developed that focus on the role of technology and material interdependence as moderating factors of the effect of eliminating individual-level performance evaluation systems on manufacturing performance. Empirical results suggest that eliminating individual-level performance evaluation may lead to higher productivity and better quality in environments characterized by high technology and material interdependence. This is in contrast to a trade-off between these performance measures in manufacturing environments with low technology and material interdependence.

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