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The impact of process automation on performance

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  • Strobel, Christina

Abstract

This paper explores how process automation affects performance, particularly in bonus-related evaluations. Using a principal–agent framework, we study the impact of predefined criteria set during system design. Specifically, we examine two scenarios in which the performance threshold for bonus payments is set either ex-ante (before performance is known) or ex-post (after performance is known). Worker performance is measured using the chosen-effort method. Our design emphasizes the role of the decision-maker in the automation process, while also considering the influence of process fairness, trust in the process, and expectations. We find that performance is significantly lower when an automated process is used, but there is no difference in performance based on who makes the decision to automate. Furthermore, we observe no variation in perceived fairness or trust between the two processes, although expectations differ. Our results suggest that while automation impacts performance, the decision-maker’s role and perceptions of fairness and trust do not significantly affect the performance, but expectations do.

Suggested Citation

  • Strobel, Christina, 2025. "The impact of process automation on performance," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 117(C).
    • Handle: RePEc:eee:soceco:v:117:y:2025:i:c:s2214804325000448
    DOI: 10.1016/j.socec.2025.102377
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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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