How Do Shop-Floor Supervisors Allocate Their Time?

Abstract

A shop-floor supervisor or team leader can raise productivity either directly, by contributing on the line, or indirectly, by helping other team members via training and problem-solving. In this paper, we address the issue of how supervisors allocate their discretionary time between these two responsibilities. We model a simple sequential game under perfect information, designed to capture salient incentives of worker and supervisor. The degree of productivity increase depends on complementary inputs; in addition to the time a first-line supervisor contributes to indirect effort by helping the worker, the effort of the worker is also required. Implications of the model are tested using data on time allocations of supervisors from a Japanese automobile plant in the U.S. We find that the supervisory time allocations have a significant effect on productivity in this Just-In-Time production environment of a capital-intensive auto assembly plant. Empirical results provide evidence consistent with both selected premises and implications of the model.

Keywords: Shop-floor Supervisor, Productivity, Time Allocation, Just-in-Time Manufacturing, Japanese Management

JEL Classification: M40, M46, J33