Productivity and Labor Allocation Within Teams of Knowledge Workers

Abstract

We study the optimal functioning and productivity of teams of white-collar knowledge workers, using data from a large Japanese architectural and engineering consultancy firm. Most team working hours are supplied by only a few workers, evoking the Pareto Principle of business management. A new model of within-team labor allocation replicates the distributions of team productivity and within-team labor allocation and permits decomposition of a nearly 7.5% team productivity increase (resulting from the 2008-2009 financial crisis) into parts due to increases in individual worker productivity (2.5%) and within-team labor reallocation (5%).