KEY CONCEPT

Project managers must manage the tendency of project workers to procrastinate, which leads to delayed efforts and, subsequently, quality problems. Understanding the behavioural biases of project workers leads to solutions to procrastination — solutions related to compensation, team composition and the management of information. 

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IDEA SUMMARY

Many project managers are now working with contract or distant employees who have some autonomy in how they plan out the assignment. These projects required highly skilled workers but often are not exciting enough to be intrinsically motivating. Examples include information technology or business process outsourcing projects.

New research explores the implications of this type of work, and especially the temptation to procrastinate during the early periods of the project. The reason is what the researchers call ‘cost salience’. People put more value (in psychological terms, attach a greater salience) on immediate time. Distant hours are seen as less valuable, which is why people tend to push work off to those later hours. The result, in project management is ‘effort distortion’ (as opposed to effort that is evenly distributed through the time of the project).

The researchers thus identify two types of workers: those with ‘high cost salience’ who are likely to procrastinate, and those with ‘low cost salience’ who are less likely to procrastinate.

There is a price to procrastination: work done under pressure of deadline will be of less quality, leading to costs related to unsatisfied customers, delays, cost of fixing products, etc.

To explore how to manage cost salience and reduce costly effort distortion, the researchers developed a statistical model based on a project that would be completed in two periods. Incorporating different variables (such as different cost saliences, one-person vs. multi-people projects), the researchers gained insights and practical behavioural guidelines on managing project teams based on the following issues:

• Cost Salience and Quality Costs. When the quality costs of procrastination are high, managers can ensure greater quality of work by paying higher wages in the first period. This motivates workers to expend more effort in the first period instead of pushing work off to the second period. The higher wages will be less than the quality costs incurred by first-period procrastination. If the cost of procrastination is low, however, managers can tolerate first period procrastination, and therefore should pay the same wages in both periods. The secret is to know the threshold.
• Diversity. A diverse team can have widely different habits. A simple example would be a team with a worker who never procrastinates and one who always procrastinates. The research shows that assigning a diverse team to a project is more efficient than building a team with average levels of procrastination. The reason: the vigorous efforts of the non-procrastinator in the first period make up the costs, in terms of higher first-period wages) of the procrastinator.
• Fluidity. Fluid teams are those in which team members are brought together from various backgrounds and exposures. They don’t know each other very well. They don’t know who procrastinates and who doesn’t. The researchers developed a variety of behavioural scenarios based on this uncertainty. To take one example, if a non-procrastinating worker thinks his colleague on the team is a procrastinator, the non-procrastinator is going to work harder in the first period, hoping to get more work (and thus more pay) in the second period (drawn from what the overwhelmed procrastinator cannot cover).

Team managers, who know the various worker types on their team, can strategically share or withhold information in order to encourage the most timely and best quality work. Imagine, for example, that each worker on a two-person team mistakenly believes the other is a procrastinator. The result: both will work hard in the first period to get more work in the second period. In this case, the manager would do well to withhold the truth and let them both push hard. In another case, a non-procrastinator mistakenly thinks his colleague is also a non-procrastinator. In that case, the manager should let this employee know that his colleague tends to procrastinate: the employee will then be motivated to work harder in the first period. At the same time, no use telling the procrastinator on the team that his colleague doesn’t procrastinate; otherwise, the procrastinator will do even less!

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BUSINESS APPLICATION

This research reveals how team composition and the management of information are different levers managers can use to ensure the most high quality and time execution of their projects. Some specific guidelines for project management include the following:

• Examine the costs of cost salience and project quality, and decide on these how to compensate the worker or workers accordingly. Although common wisdom is to withhold payment to ensure productivity, this research argues that higher early compensation will ensure less procrastination.
• If assigning different individuals to different projects, put the procrastinators on the least quality-sensitive projects. Even with front-loaded wages, their costs will be made up by the non-procrastinators on quality-sensitive projects.
• When putting teams together for larger projects, combine procrastinators and non-procrastinators. The diversity will be more efficient.
• Use your knowledge of your workers to manage the flow of information in such a way that motivates all workers. Don’t be afraid of information symmetry: giving information to some and not to others.

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REFERENCES

Managing Cost Salience and Procrastination in Projects: Compensation and Team Composition. Yaozhong Wu, Karthik Ramachandran & Vish Krishnan. Ross School of Business Working Paper (October 2012). 

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