Information Asymmetry and the Productivity of Information Workers

To understand how IT affects worker productivity we need to understand the factors that shape information worker productivity in the first place. Typical characteristics of information work (in particular, highly intangible output and significant measurement problems) and the managerial response to them are likely to play significant roles in determining information worker productivity. We examine the impact of information asymmetry in a team production environment to develop insights into how team design and monitoring are changing the incentives facing information workers and thus their productivity. Using a detailed dataset of human resources records and timecards from a large multi-national software development firm, we examine the influence of these incentives on novel measures of information worker productivity. We find that skill redundancy reduces individual productivity, and that both team composition and task content have predictable effects on the manager’s ability to leverage monitoring effort across several workers. We explore some implications of these results for managing teams of information workers, specifically related to task design elements such as substitutability and complementarity between team members.