To What Extent Do Workers’ Preferences Matter?

Abstract

Problem definition: Our research investigates how preference satisfaction, particularly intrinsic values such as psychological comfort, can improve workers' service efficiency and quality. Methodology/results: We utilize a unique setting to examine solely the intrinsic values driving workers’ service performance. In this setting, surgeons have operation room preferences that result only from intrinsic values because these operating rooms are instrumentally identical. Examining a comprehensive dataset linking surgeons’ performances to their preferences for operating rooms, we confirm and quantify the intrinsic benefits of preference satisfaction on service efficiency and quality. We also find that compared to workers without preferences, workers with preferences perform better if satisfied, but worse if unsatisfied. Moreover, we find that when workers are under heavy workloads or performing complex tasks, these preference effects are more pronounced. Based on our findings, we update the surgery scheduling framework by incorporating surgeons' preferences. Our counterfactual analysis shows that for the operations in our sample, satisfying surgeons’ preferences can reduce healthcare costs by over 4 million dollars, besides improving patients’ and surgeons’ welfare. Managerial implications: Our findings suggest that firms can utilize the intrinsic benefits of preference satisfaction as a lever to improve service performance without incurring the cost of instrumental changes. Moreover, firms can consider cultivating workers’ preferences if their systems have enough flexibility to satisfy them. When firms cannot satisfy the preferences of all workers, they can consider prioritizing workers with heavy workloads or complex tasks to maximize the improvement in service performance. Specifically for the healthcare industry, the scheduling system can integrate surgeons’ preferences for operating rooms into the optimization framework to achieve huge benefits in operation cost saving and patient welfare improvement at little expense.

Keywords: service operations management, intrinsic benefits, preference satisfaction, service efficiency and quality, scheduling