According to a recent article in The Wall Street Journal, at least one type of business is flourishing in our COVID-19-induced world of remote work: companies selling tools that permit employers to monitor how employees spend their time. The chief executive officer of ActivTrak, a company providing employee monitoring software and user behavior analytics, remarked that inquiries had been "a little insane" lately. Teramind, another vendor in the space, has also experienced a tripling of inbound inquiries since mid-March—along with a sizable uptick in additional licenses requested by existing clients to track more users within their organizations.
It’s not surprising that companies would want to increase their surveillance efforts, given worries about a potential decline in productivity among newly remote workers. But before you turn to ever-expanding technologies that allow managers to see their employees’ screens, keep track of the sites they visit, monitor their email (and potentially their phone calls) or use their computer’s camera to watch them, consider these four important facts.
1) Trust Is Fundamental for Effective Organizational Functioning
In the forward to JetBlue’s executive chairman Joel Peterson’s book, The 10 Laws of Trust, Steven Covey referred to trust as "an economic driver," noting that "high trust is a dividend; low trust is a tax." Research backs him up. A longitudinal study of 88 retail stores found that when employees felt trusted by management, they performed better in terms of sales and customer service (in part, because employees accepted more responsibility for their work).
But trust impacts more than external measures of success. It acts like an organizational lubricant—with high trust, there is less friction and people work together more effectively. Moreover, trust affects employees’ willingness to collaborate and share information, since they would be less inclined to divulge valuable and important insights to those whose motives they suspect. For instance, of the 1,202 working-age adults in the U.S surveyed by the Trust Edge Leadership Institute, 23 percent said they would offer more ideas and solutions if they trusted their leaders.
2) Surveillance Diminishes Trust
When a company engages in close surveillance of employees, the action signals that it does not trust staff to get the job done themselves. But this is hardly a new practice. Electronic monitoring of employees long predates COVID-19 and the shift to remote work. Even 14 years ago, a survey found that 78 percent of employers conducted surveillance on employees, with half monitoring phone calls.
That’s because employers believe that their oversight and direction makes things better—something social psychologist Robert Cialdini and I called a "faith in supervision" effect. In essence, observers tend to see work performed under the control of a supervisor as better than identical work done without as much guidance.
But what monitoring actually does is make employers less trusting of their employees. In a classic study conducted by social psychologist Lloyd Strickland more than 60 years ago, participants were randomly assigned to more closely supervise one of two subordinates (actually confederates of the experimenter) in a simulated work environment. When given the choice of who to monitor more closely on a second task, they selected that same person, assuming they were less trustworthy (for no other reason other than they’d already been observing that individual).
The paradox of surveillance is that if a boss is always watching, they can’t possibly know if an employee is trustworthy because that worker has no chance to demonstrate trustworthiness. Until employers take that risk—and allow employees to operate independently—they’ll continue to view the work as a reflection of their oversight rather than the result of an employee’s own motivations and conscientiousness.
3) Companies Should Assess Results Rather Than Micro-Level Behaviors
As long as people comply with the law and applicable regulations to get their work done, why should an employer care how they spend their time? As numerous studies show, hours spent working are often inversely related to productivity. And taking breaks—from school-related study or work—can actually improve concentration.
Presumably, employers hire people to get things done, not necessarily to work certain hours or engage in specific behaviors. This should hold true now more than ever, as more routine tasks become automated, and soft skills, like problem-solving and critical thinking, skyrocket in value.
Yet micromanaging is still a common practice—one that’s a source of deep resentment. Employees are thinking adults and, for the most part, want to be treated as such. They do not want to be viewed as little children who need to be watched all the time.
4) Surveillance Creates Stress and Health Problems
In computer- or software-based monitoring, work and scheduling decisions are ultimately controlled by a machine, a practice some refer to as algorithmic management. As a result, employees do not have, or do not feel they have, the freedom to reach out to peers for advice and social support as they do their work.
The stress that arises from this degradation in job autonomy and job control can actually lead to both short-term illness and long-term changes in health status. A study of more than 700 AT&T employees found that people who had their work electronically monitored perceived their working conditions as more stressful and reported more psychological tension, anxiety, depression, fatigue and health complaints. Meanwhile, an analysis of several field experiments and surveys found that, compared with people at low-trust companies, people at high-trust companies reported 74% less stress, 106% more energy at work, 13% fewer sick days and 40% less burnout.
The Only Way to Build Trust Is by Trusting
In addition to reducing the sense of freedom so fundamental to both employee well-being and engagement, close supervision undermines the trust leaders have in the people they manage (and vice versa). Cultures of trust rely on less surveillance, not more.
Coincidentally, the COVID-19 pandemic gives workplaces the opportunity to do something they should have done a long time ago: provide people with morecontrol over their own work, greaterjob autonomy and added responsibility—in other words, treat them in a manner consistent with who they are: sentient adults.
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A New Poseidon Adventure: Flipping Succession Planning Upside Down
Organizations make significant investments in efforts to hire the right candidates – the people who have the right experience and cultural fit. By carefully managing the performance and potential of these people over time, the organization can grow its leadership pipeline, keep a steady inventory of needed skills and competencies and remain nimble in the face of change (which we have plenty of all around us these day) – all of which can have serious impact on the bottom line. However, much of this pie-in-the-sky stuff relies on being able to locate and cultivate high-potential and high-performing talent across the board. Without an integrated succession management solution, recognizing and developing talent can be an ever-elusive process. The questions we are seeing asked today include: does the traditional top-down approach to succession management still make enough of a difference? Does managing succession for a slim strata of senior executives take full advantage of the kinds of talent data we now have at our fingertips? It doesn’t have to be so. Succession management can be an interactive process between senior leadership, managers and employees at all levels of the organization. And, if we trust them, we can actually let employees become active participants in their own career development. (Shudder.) Career Management (Succession Planning Flipped Upside Down) This "bottom-up" approach is gaining momentum because who better to tell us about employee career path preferences than employees themselves. Organizations actually have talent management and other HR systems in place that allow for collecting and analyzing a whole slew of data around: Career history Career preferences Mobility preferences Professional and special skills Education achieved Competency ratings Performance scores Goal achievement Training and certifications Etc. In short, pretty much everything we’d want to know to make well-informed succession planning and talent pooling decisions. For some, the leap is simply putting some power into the employee’s hands. The talent management system of 2011 is capable of displaying a clear internal career path for employees and then, on the basis of all that data bulleted out above, showing a "Readiness Gap" – what do you need to do to make the step to the next level? And if your talent management environment comes armed with a real Learning Management System, you can take it to the next level with a dynamically generated development plan that gets the employee on the right path to actually closing those gaps. Faster development, faster mobility. Organizations that seriously favor internal mobility don’t just make employees stick on pre-defined career paths – they can search for ANY job in the company and check their Readiness levels. I might be in accounting today, but what I really want to do is move to marketing. Giving employees the chance to explore various career avenues within the organization helps assure that "water finds its level" – that is, that the right people with the right skills and the right levels of motivation and engagement find the right job roles internally. Employee participation is key, but make no mistake – managers play an important role in this interactive process. They must be prepared to provide career coaching, identify development opportunities and recommend employees for job openings. The candid discussions require that employees have open access to information so they can best understand the criteria necessary to move to the next level. A Two-Way Street Employee-driven career management is just one tool. The more traditional top-down approach to succession management remains indispensable. But organizations that value talent mobility and the ability to be able to shift and mobilize talent resources quickly will find that attention to career pathing can be vital. For employees, of course, the impacts are immediate and include boosted levels of engagement, higher retention, increased productivity and more.
The Hidden Costs of Ignoring Your Talent Management Strategy
Building and maintaining a successful company hinges on having the right people to execute projects and drive results. People, we hear time and again, are your company's most valuable asset. But their success — and HR's ability to recruit, engage and retain them — depends on HR pros who are strategic decision-makers, armed with the proper tools to let them excel at their jobs. Modern HR professionals manage much more than payroll and benefits. But their technology tools, in many cases, haven't evolved past basic productivity software like email or Microsoft Word. HR simply can't be strategic with old-school tools that reduce people to statistics and give little insight into what the numbers mean. Emails and spreadsheets were not designed to deliver meaningful insights into people's performance, suggest when employees should be promoted or highlight skills gaps in a company. For that, HR needs a broader, more strategic set of talent management tools, which lets professionals manage every aspect of the workforce, from training and performance reviews to collaboration and succession planning. Yet, research shows that less than 25% of companies use a unified, holistic approach to their talent management. The Real Costs of "Doing Nothing" As a Talent Management Strategy The critical relationship between business strategy and HR strategy too often gets overlooked by senior leadership. While it may seem like the company is saving money by managing recruiting, training, performance and succession via manual and paper-based processes, in reality it’s costing your business more than you know. For example: Without a talent management strategy, a company with 2,000 employees is losing almost $2 million every year in preventable turnover alone. Businesses that don’t invest in learning suffer from decreased employee performance and engagement to such a degree that they can expect to realize less than half the median revenue per employee. That’s a direct impact on the business. In employee performance management, organizations without a focused strategy waste up to 34 days each year managing underperformers and realize lower net income. To learn more about the business impact of talent management and how to start building out your strategy, check out the eBook Why Your Nonexistent Talent Management Strategy is Costing You Money (And How to Fix It) and register for the March 19th webinar, Building the Business Case for Talent Management.
The Return of the Moderate Merit Budget – Wreaking Havoc on Pay for Performance
With the economy now on steadier ground, most organizations have returned to administering a merit budget to the pre-recession levels of 3 to 3.5%. In the years immediately following the economic downturn, many merit budgets were eliminated entirely or were reduced significantly and reserved for a select segment of the employee population. Pay for performance has become a necessity for many organizations that are expected to accomplish more with fewer resources. I often get asked: "How can I truly award my top performers with such a limited budget? Should I do so at the expense of my ’Meets Expectations’ performers? What if I need to retain my ’Meets Expectations’ performers and giving them 0% to 2% increase puts me at great risk for turnover? But if I don’t recognize my top performers, don’t I risk losing them...?" These are difficult questions to answer, however you can determine the best solution for your organization by considering the following: Are your employees paid at market pay levels? Is your organization’s performance management process mature? Does your organization have other compensation programs in place to reward top performers (e.g. variable pay)? Market Pay If turnover is a concern, and your organization needs to maintain ’bench strength’ in order to achieve its strategic objectives, your biggest priority should be to ensure that you are paying your employees at market pay levels. Why? Historically, as the labor market strengthens, organizations become vulnerable in terms of losing people. Hiring and onboarding replacement talent is not only costly to the organization, but can also cause dissension among existing employees since new hires may be getting paid more. Be sure to stay abreast of market pay levels and trends, and use the merit budget to correct disparities. Performance Management Process Organizations vary significantly in terms of the maturity of their performance management process. Closely examine your organization’s process and look for ways to improve it. If there is a perception that one management team is an ’easier grader’ than the others, the process is inherently flawed and any pay for performance program will not be viewed as credible and fair by employees. A good place to start is to get a calibration process in place and communicate broad guidelines on expected distribution ratings. Variable Pay Programs Variable pay programs (e.g. bonuses) have become increasingly more popular across all industries and career levels. These programs provide the opportunity for employees to share in the organization’s success while not adding to fixed payroll costs. Some plans have an individual performance component which can be a very effective means to recognize top performers. However, in order for this type of program to be successful, individual goals and targets must be well documented and communicated. Again, this is largely based on the maturity of the organization’s performance management process which takes time to evolve. What are the best steps to avoid wreaking havoc on your pay for performance process? First ensure your pay levels are keeping pace with the market Continue to evolve your performance programs with calibration among managers and a rigorous goal setting process Promote variable pay plans to reward high performers without adding to fixed pay roll costs It’s not always an easy journey but, in the end, it’s best to use a measured approach that is based on business needs and a realistic assessment of your current programs and processes.