People feel that intrusive control harms their dignity, and lose intrinsic motivation to perform well, write Gabriel Burdin, Simon D. Halliday, and Fabio Landin

Burdin, Gabriel

Halliday, Simon

Landini, Fabio

English

LSE Research Online

Why	using	technology	to	spy	on	home-workingemployees	may	be	a	bad	ideaWhat	will	the	life	of	a	post-COVID-19	remote	worker	look	like?	Imagine	yourself	as	one	of	the	army	of	white-collarworkers	now	working	from	home.	You	wake	up,	help	with	family	chores,	then	sit	at	your	desk	ready	to	work.	As	youopen	your	laptop,	an	app	connected	to	your	company’s	server	asks	you	to	log	in	and	to	switch	on	your	webcam.Remote	software	takes	a	picture	of	you	and	your	desktop.	It	will	take	screenshots	of	your	workstation	every	10minutes.	Another	app	will	track	your	web	browsing,	online	calls,	social	media	posts,	and	even	private	messaging.This	surveillance	machinery	is	intended	to	provide	you	with	the	right	incentives	to	maintain	sufficiently	highproductivity:	hours	billed,	lines	of	code	written,	videos	produced.	No	slacking	off	while	you	work,	while	you’rewatched.Though	the	scenario	we	outlined	may	sound	like	dystopian	fiction,	such	technologies	are	already	in	place.	ITservice	companies	have	been	developing	tools	for	online	workplace	surveillance	for	years	now.	ActivTrak,InterGuard,	Veriato	360,	Teramind,	WorkSmart,	and	Work	Examiner	are	only	a	few	examples	of	tools	withcapabilities	ranging	from	basic	monitoring	of	employees’	online	activities	to	business	intelligence	reporting	and	dataanalytics	to	process	employees’	data.	In	the	pre-COVID-19	world	these	technologies	were	developed	to	tackle	aphenomenon	called	“cyberloafing”,	namely	the	propensity	of	employees	to	use	email	and	the	Internet	for	personalpurposes	while	at	work.	Researchers	have	estimated	that	cyberloafing	accounts	for	about	30%	to	65%	of	Internetusage	at	work.	The	COVID-19	pandemic,	and	the	related	switch	to	work-from-home	practices,	have	sharplyincreased	the	demand	for	such	tools.	Employers	see	these	tools	as	a	way	to	minimise	waste	in	a	shaky	anduncertain	economy.	But	will	these	tools	reduce	waste,	or	will	they	backfire?Hidden	benefits	of	abstaining	from	controlLSE Business Review: Why using technology to spy on home-working employees may be a bad idea Page 1 of 3		Date originally posted: 2020-06-17Permalink: https://blogs.lse.ac.uk/businessreview/2020/06/17/why-using-technology-to-spy-on-home-working-employees-may-be-a-bad-idea/Blog homepage: https://blogs.lse.ac.uk/businessreview/From	the	point	of	view	of	standard	economic	theory,	intensive	online	workplace	surveillance	makes	perfect	sense.Economists	have	historically	seen	employer-employee	interactions	through	the	lens	of	principal-agent	theory:	whereworkers	(agents)	provide	benefits	to	their	boss	or	manager	(a	principal)	for	a	wage.	The	theory	assumes	agents	–workers	like	software	engineers,	teachers,	or	machine	operators	–	care	only	about	material	payoffs	(their	wagesand	benefits)	and	that	they	are	motivated	purely	by	self-interest.	The	predictions	of	this	theory	are	straightforward:the	labour	contract	is	incomplete	in	the	sense	that	a	broad	range	of	actions	(such	as	a	worker’s	effort),	which	arecostly	for	the	worker	and	beneficial	for	the	employer,	are	hard	to	specify.	Therefore,	opportunistic	employees	willalways	have	the	incentive	to	shirk,	unless	another	employee	specialises	as	a	monitor	to	check	the	worker’sperformance.	Before	online	work	became	the	norm,	such	monitoring	tasks	were	performed	by	mid-level	managers,with	inevitable	“who	monitors	the	monitor”-type	issues.	In	the	contemporary	world	of	cyber-surveillance,	theproblem	of	monitoring	is	easily	solved.	Technology	therefore	offers	a	close	substitute	for	mid-level	monitor-managers,	with	potential	large	cost	savings.	Paying	for	software	is	cheaper	than	paying	people	to	work	as	monitors.But	this	conclusion	relies	on	an	outdated	model	of	individual	behaviour.	A	large	body	of	empirical	evidencedeveloped	over	the	last	quarter	century	suggests	that	people	have	more	complex	motives	than	those	posited	by	thestandard	self-interest	model.	Alongside	material	payoffs,	people	care	about	whether	and	to	what	extent	their	work	issupervised	by	others,	suggesting	people	value	autonomy	and	dislike	external	control.	People	are	also	motivated	byreciprocity	and	their	beliefs	about	others’	intentions.	If	we	take	into	account	these	complex	motives,	then	our	designof	workplace	surveillance	systems	–	online	or	otherwise	–	should	change	considerably.Considering	control	practices,	social	psychologists	have	long	recognised	that	when	people	lack	autonomy	they	loseintrinsic	motivation	and	their	workplace	performance	worsens.	Behavioural	economists	have	investigated	whetherreciprocity	plays	a	similar	role	in	the	workplace.	Reciprocity	means	that	people	reward	kind	actions	and	punishunkind	ones	even	at	a	personal	cost.	Laboratory	experiments	have	shown	that	reciprocally-motivated	employeesmay	interpret	control	by	employers	as	a	signal	of	distrust	and	respond	by	lowering,	rather	than	increasing,	theirwork	effort.	Neuroscientific	studies	have	provided	evidence	suggesting	that	differences	in	control-averse	behaviourcan	be	explained	by	functional	connectivity	in	brain	regions	commonly	associated	with	attention	reorientation	andcognitive	control.	The	latter	are	regions	that	often	activate	when	subjects	need	to	overcome	conflicts	in	decisions.We	conducted	a	study	that	helps	to	disentangle	the	role	of	autonomy	and	reciprocity	as	drivers	of	control	aversion.We	designed	an	incentivised	experiment	in	which	an	agent	(employee)	chooses	a	level	of	work	effort,	which	iscostly	to	him	but	beneficial	to	the	principal	(employer).	Before	effort	is	selected,	a	control	device	can	beimplemented	that	forces	the	employee	to	exert	a	minimum	level	of	effort,	that	is,	it	prevents	shirking.	We	comparetwo	scenarios:	one	in	which	an	employer	exerts	control	directly	and	another	in	which	a	third	party	(who	receives	afixed	compensation	independent	of	the	employee’s	effort)	can	control	the	worker.	When	either	the	employer	or	athird	party	decides	to	control,	effort	is	similar.	What	changed	were	the	employees’	reactions	to	employers	and	thirdparties	deciding	not	to	control.	Employees	reward	trusting	employers	who	abstain	from	control	with	trustworthyexertion	of	effort,	rather	than	punishing	controlling	ones	for	their	distrustful	exertion	of	control.	Employers	maytherefore	trigger	employees’	positive	reciprocity	and	sustain	their	productivity	not	by	exerting	greater	control,	but	byabstaining	from	it	whenever	they	have	the	opportunity	to	do	so.The	future	of	control:	technologically	unbounded,	fairness-constrained?Some	experts	expect	a	surge	in	home	working	in	the	post-pandemic	world.	Indeed,	survey	evidence	not	only	showsa	sudden	increase	in	the	incidence	of	remote	work	during	the	outbreak	but	also	suggests	remote	work	is	expectedto	be	the	new	normal.It	should	come	as	no	surprise,	then,	if	we	observe	more	intense	debates	around	the	protection	of	workers’	personaldata	and	privacy,	blurred	boundaries	between	work	and	non-work,	and	expectations	that	workers	be	alwaysavailable	for	workplace	communication	versus	workers’	right	to	disconnect.	In	the	post	COVID-19	world,	it	willbecome	even	clearer	that	these	emerging	regulatory	issues	are	new	faces	for	an	old	problem	–	a	new	episode	inthe	long	dispute	over	the	enforcement	of	labour	discipline	in	capitalism.LSE Business Review: Why using technology to spy on home-working employees may be a bad idea Page 2 of 3		Date originally posted: 2020-06-17Permalink: https://blogs.lse.ac.uk/businessreview/2020/06/17/why-using-technology-to-spy-on-home-working-employees-may-be-a-bad-idea/Blog homepage: https://blogs.lse.ac.uk/businessreview/While	the	continuous	improvement	in	technical	efficiency	is	an	unquestionable	hallmark	of	capitalist	production,such	technological	choices	have	also	been	aimed	at	addressing	the	conflict	of	interest	between	firm	owners	andworkers.	Since	the	Industrial	Revolution,	capitalists’	inventiveness	to	use	technology	and	job	design	to	extract	moreeffort	and	reduce	workers’	discretion	has	known	no	limits.	In	the	post	COVID-19	world,	investments	intelecommuting	technologies	will	offer	a	readily	available	turnkey	solution	for	companies	willing	to	move	productiononline	and	retain	the	authority	to	monitor	workers’	activity	closely.	Many	factors	affect	the	productivity	of	workersworking	from	home.	The	relative	importance	of	these	factors	is	likely	to	vary	across	industries,	occupations,	andtasks.	Recent	research	in	behavioural	economics	emphasises	a	missing	element	of	this	debate.	By	succumbing	tothe	temptation	of	policing	teleworkers,	employers	may	be	signalling	distrust	and	crowding	out	intrinsic	motives	toperform	a	good	job.	Employers	who	ignore	these	potential	behavioural	reactions	to	the	implementation	of	intrusivecontrol	mechanisms	may	not	only	inflict	harm	on	their	employees’	dignity,	but	also	undermine	the	goal	of	increasedproductivity	itself.♣♣♣Notes:This	blog	post	is	based	on	“The	hidden	benefits	of	abstaining	from	control,”	Journal	of	Economic	Behavior	&Organization,	vol.	147(C),	1-12	(2018).The	post	expresses	the	views	of	its	author(s),	not	the	position	of	LSE	Business	Review	or	the	London	Schoolof	Economics.Featured	image	by	John	Schnobrich	on	UnsplashWhen	you	leave	a	comment,	you’re	agreeing	to	our	Comment	PolicyGabriel	Burdin	is	an	associate	professor	in	economics	at	Leeds	University	Business	School	andresearch	fellow	at	the	Institute	of	Labor	Economics	(IZA).	Gabriel	is	also	affiliated	scholar	at	FCEA-Universidad	de	la	República	(Uruguay).	His	work	generally	covers	employee	ownership	andrepresentation,	organisations,	labour	markets,	inequality,	and	behaviour.	For	more	on	Gabriel’sresearch,	visit	his	personal	website.Simon	D.	Halliday	is	an	assistant	professor	of	economics	at	Smith	College,	MA.	Heworks	in	the	behavioural	economics	of	social	preferences	examining	reciprocity,	trust,and	deception	in	the	workplace,	in	rating	systems,	and	in	group	interactions.		He	alsoworks	in	economics	education	and	has	a	forthcoming	textbook	(with	SamuelBowles)	Microeconomics:	Competition,	Conflict,	and	Coordination.	See	his	website	forfurther	details:	simondhalliday.com.Fabio	Landini	is	an	associate	professor	in	economic	policy	at	the	University	of	Parma	and	anaffiliate	at	ICRIOS-Bocconi	University.	His	main	areas	of	research	include	industrial	dynamics,economics	of	innovation,	organisational	and	behavioural	economics,	institutional	economics.	SeeFabio’s	website	for	further	information:	https://fabiolandini.com/	LSE Business Review: Why using technology to spy on home-working employees may be a bad idea Page 3 of 3		Date originally posted: 2020-06-17Permalink: https://blogs.lse.ac.uk/businessreview/2020/06/17/why-using-technology-to-spy-on-home-working-employees-may-be-a-bad-idea/Blog homepage: https://blogs.lse.ac.uk/businessreview/

Why using technology to spy on home-working employees may be a bad idea

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Why using technology to spy on home-working employees may be a bad idea

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