Puerto Rico is home to a robust QSR sector that directly employs more than 60,000 workers. Performance monitoring is a mainstay management tool in most. Yet we still know little about whether – and why – better monitoring yields better performance in practice. We studied the introduction of a performance monitoring technology that enables managers of a large QSR chain established in Puerto Rico to track the progress of drive-thru orders in real-time.
Can performance monitoring technology alone boost productivity gains? Does it affect hiring practices? Can managers implement other programs to support gains observed by monitoring technology?
Our partner QSR firm owns and directly operates more than 60 fast-food restaurants in Puerto Rico. Importantly, the main data systems utilized in the restaurants are also provided by the same partner. The drive-thru service was one of the brand’s most significant innovations in the industry. The drive-thru contributes approximately two-thirds of the chain’s total sales. QSRs in the region, much like those across the globe, employ the Ford production line approach to fast food.
Beginning in 2019, the chain implemented in staggered fashion a drive-thru performance monitoring system in 51 Puerto Rico restaurants to track productivity at the primary point of sale. We know the exact week in which each store implemented the monitoring technology. Since each store implemented the technology at different times, we can measure the technology’s impact on different store performance indicators before and after the implementation.
We used data from three main sources. The first source is data on all the transactions of the stores that took place during our sample period. The second is employment and training data, and the third is waste and yield data for each store.
While sales increased by nearly 5%, this rise was caveated by their short tenures. Impacts regressed to roughly half their initial magnitude within two months of the intervention. It was found that managers did respond to the availability of real-time data on bottlenecks by providing greater training inputs to workers at key workstations, particularly in the kitchen. However, only a subset of managers provided “refresher” training to counteract skill depreciation over time. Stores where managers utilized refresher training intensively prior to the technology implementation had more persistent gains in sales, suggesting that managers’ attention and responses to worker skill dynamics matter for productivity. Performance monitoring technology alone cannot ensure productivity gains and on-the-job human capital investment is critical to sustaining such efficacies.