Federal Reserve Bank's Switch to Teams Improves Performance

The researchers were asked to help the Federal Reserve Bank of Los Angeles improve its check-processing operation, which at the time was performed by workers in function-based groups (receiving, encoding, etc.). After an assessment and pilot test, the researchers recommended switching to cross-functional teams with greater control over the process, and in which all members would be cross-trained"even though some of the workers" skills were far more technical than others. They also designed a planning tool that allowed the managers to determine the best size and mix of individuals for teams working different shifts (based on the volume of work to be done, for example).

Overall productivity rose 24.3 percent in the first year, and resulting staff reductions saved $690,000. Another $500,000-worth of staff resources could be reassigned to strategic projects. Team members became better learners and problem-solvers, increased their operational and leadership skills, and felt more ownership and accountability for their work. The bank is moving ahead with converting the teams to full self-direction, meaning the teams will take responsibility for goal-setting, scheduling, hiring, appraisals, and discipline.

Source: So, K., Tang, C., and R. Zavala (03), "Models for Improving Team Productivity at the Federal Reserve Bank," Interfaces 33(2):25.