Managing Production Yields and Rework through Feedback on Speed, Quality, and Quantity

Balancing priorities of production speed and conformance quality is an ongoing challenge in production and operations management. Organizations may emphasize these priorities through various forms of performance feedback. However, the impacts of using feedback to emphasize speed, quality, and quantity remain unclear in production settings. This study employs controlled laboratory experiments to examine the impact of real‐time feedback on production quantities, first time yield percentages, and rework percentages. Drawing on concepts from speed‐accuracy tradeoffs, we study four types of feedback: speed, accuracy, joint speed and accuracy, and yields. Laboratory activities focus on the repetitive task of converting paper‐based medical records to electronic data formats. These tasks are critical inputs to data analytics and are similar in nature to simple independent manufacturing and service tasks. We study feedback effects in a setting critical to practice but rarely studied in research, where workers are incentivized for both speed and quality as they perform production tasks that explicitly allow rework. The results show that production yields worsen under speed feedback but improve under each form of quality‐containing feedback. Results also show that each form of quality‐containing feedback increases the proportion of correctly reworked to produced errors through different mechanisms of increased error fixing, decreased error production, or both.