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Market-Based Solutions to Vital Economic Issues


Market-Based Solutions to Vital Economic Issues
Jul 13, 2020

Doing Well By Doing Good: Improving Store Performance with Employee-friendly Scheduling Practices at the Gap, Inc


We estimate the causal effects of employee-friendly scheduling practices on store financial performance at the US retailer Gap, Inc. The randomized field experiment evaluated a multi-component intervention designed to improve dimensions of work schedules – inconsistency, unpredictability, inadequacy, and lack-of-employee control – shown to undermine employee well-being and productivity. The experiment was conducted in 28 stores in the San Francisco and Chicago metropolitan areas during a 9-month period between November 2015 and August 2016. Intent-to-treat (ITT) analyses indicate that implementing employee-friendly scheduling practices increased store productivity by 5.1%, a result of increasing sales (by 3.2%) while also decreasing labor (by 1.8%). Drawing on qualitative interviews with managers and quantitative analyses of employee shift-level data, we offer evidence that the intervention improved financial performance through two mechanisms: enhanced employee effort and store execution. Given the common assumption that employee-friendly scheduling practices are costly for business because they reduce labor flexibility for employers, we give particular attention to examining how the intervention reduced labor hours. Analyses indicate that a significant proportion of the reduction can be traced to improved employee schedule adherence and the subsequent decrease in downstream “paper cuts” to the labor budget that occurs as one employee’s tardiness cascades throughout the day and to coworkers. Our findings thus provide compelling evidence that schedule adherence is not exogenous to managers’ scheduling behavior or to scheduling algorithms. Employers place profits at risk when they underestimate the business benefits of employee-friendly scheduling practices.

Note: Research papers posted on SSRN, including any findings, may differ from the final version chosen for publication in academic journals. 

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