Bosses Don’t Need a ‘What Did You Do’ Email. They’re Already Tracking You. (and how this might be related to Keynes' theory of sticky wages)

Elon Musk’s email to federal employees prompted angst, but lots of employers use technology for continuous feedback on worker performance

By Natasha Khan and Ray A. Smith. Excerpts:

"What did you do last week?

The question that Elon Musk lobbed to federal workers in an email set off anger and angst from unions and employees. It also prompted some head scratching from corporate America, where technology tracks worker productivity at a granular level to answer that question in real time.

At a click of a button, managers can check how many pitches a sales person made this week, how quickly a customer-service representative resolved a complaint, or the progress an engineer made on an assigned task.

Some companies have taken to using sophisticated data analysis tools to spy on their employees, sifting through millions of emails and chat messages and calendar appointments to measure productivity.

Executives say the intel allows for quicker and more nimble feedback, allowing them to shuffle resources according to the data. Productivity in the U.S. has been on the rise, in part because of new technologies.

“Corporations have moved beyond calling for written weekly status reports and into real-time accountability,” said Deidre Paknad, chief executive of WorkBoard, a software company."

"Some federal departments also use technology to track employee productivity." 

"Anyone who is asked to self-report data that might be used against them is likely to report information that reflects well on them, not necessarily prioritizing information that provides a full picture, she added." ( Stacia Garr, co-founder of workforce research and advisory firm RedThread Research)

"Jeffrey Sonnenfeld, senior associate dean for leadership studies at the Yale School of Management, said he viewed Musk’s email as “hostile” and “threatening” and the antithesis of good management.

“It’s worse than micromanaging, this is more like nanomanaging,” he said. “I mean, what are they going to do next, ask what the employees ate that morning?”"

The Keynesians have come up with theories to explain why wages might be slow to fall in a recession. Here is one of them:

Efficiency Wage Theory-Companies set wages above competitive (that is, market determined) levels to increase labor productivity. This does two things:

1. It reduces worker turnover, since workers will want to keep this high paying job. This in turn reduces training and hiring costs. When that happens, productivity rises.

2. It reduces slacking since no worker will want to get caught not putting forth their best effort because the job pays so well. They would not want to get fired from a job that pays so well. The company cannot constantly monitor its employees, so the high wage prevents slacking.

The idea is that it was too costly to constantly monitor what all the workers were doing. But maybe things are changing now.

 

Related post:

 

With technology that can more closely monitor worker activity, will wages fall or not rise as much? (2019)