To What Extent Do Workers’ Preferences Matter?

Abstract

Our research investigates how preference satisfaction, particularly intrinsic values such as psychological comfort, can improve a worker's service efficiency and quality. Examining a comprehensive dataset linking surgeons' performances to their preferences for operating rooms, we not only confirm the significant role of intrinsic values in driving workers' service efficiency and quality but also quantify the preference satisfaction effect as large enough to serve as a new managerial lever for firms. However, we also find that compared to workers without preferences, workers with preferences perform better if satisfied, but worse if unsatisfied. This suggests that firms should consider the cultivation of workers' preferences only if their systems can satisfy their workers. Furthermore, our second-order analysis suggests that in a restricted system, managers should prioritize satisfying workers with heavy workloads or complex tasks to achieve the greatest improvement. Finally, we update the surgery scheduling framework by incorporating surgeons' preferences. Our counterfactual analysis demonstrates that preference satisfaction can achieve huge benefits in operation cost saving and patient welfare improvement at little expense. For the operations in our sample, we find satisfying surgeons' preferences can reduce healthcare costs by over 4 million dollars, not to mention the potential for significant improvement in patients' and surgeons' welfare.