Aligning Order Picking Methods, Incentive Systems, and Regulatory Focus to Increase Performance

Abstract

A unique controlled field experiment investigates order picking performance (in terms of productivity and quality). We examined three manual picker-to-parts order picking methods (parallel, zone, and dynamic zone picking) under two different incentive systems (competition- based versus cooperation-based) for pickers with different regulatory foci (prevention-focus versus promotion-focus). The study was carried out in a warehouse erected especially for the purposes of order picking research. Our results show that when using a parallel picking method a competition- based incentive system increases productivity and quality compared to a cooperation-based incentive system, and that when using a zone picking method it is more productive to use a cooperation- based incentive system. This pattern of results was especially pronounced for pickers with a dominant promotion focus. Dominantly prevention focused pickers, however, were more productive with a cooperation-based incentive system, irrespective of the picking method. Additionally, a cooperation-based incentive system delivered a low quality performance in zone picking, but a high quality performance in dynamic zone picking. The analyses demonstrate that by aligning order picking methods, incentive systems and regulatory focus, warehouses can improve productivity and quality, and reduce wage costs by up to 20%.

Keywords: behavioral operations, warehousing, order picking, incentives