Evaluating Performance Monitoring

Puerto Rico is home to a robust Quick Service Restaurant (QSR) sector that directly employs more than 60,000 workers. Performance monitoring is a preferred management tool in most QSRs. Yet we still know little about its impact on firms and workers. We evaluated the impact of performance monitoring technology on a large drive-thru QSR chain owned by a partner firm. The firm directly operates more than 60 fast-food restaurants in Puerto Rico. Our research measured the technology’s impact on different performance indicators before and after its implementation.

Can performance monitoring technology boost productivity gains? Can managers introduce complementary programs to positively impact worker wellbeing?

Beginning in 2019, the chain implemented a performance monitoring system in 51 Puerto Rico restaurants in staggered fashion to track productivity at the primary point of sale. We aligned with the exact week during which each store implemented the monitoring technology. Since this differed, we can precisely measure the technology’s impact on various indicators before and after the introduction of performance monitoring. We utilized data from three main sources:

• The first source was data on all the transactions that took place during the sample period.
• The second is employment and training data.
• The third is waste and yield information.

Our research found that performance monitoring technology alone does not ensure productivity gains.

• While sales increased by nearly 5% after the tool’s introduction, this rise was limited by short tenures.
• Impacts regressed to roughly half their initial magnitude within two months after implementing performance monitoring.
• Managers did respond to the availability of real-time data on bottlenecks. However, only a subset of managers provided holistic continuous trainings to support workers.
• In the long-term, infrequent advice was less efficient than regular and dynamic managerial interventions.
• Stores where refresher training was consistently implemented had more persistent gains in sales. This shows that managers’ active inputs to workers matters for productivity.
• On-the-job human capital investment is critical to sustaining such efficacies.

Image credits: Nayantara Parikh / Shalin Gor