Digital monitoring is no substitute for engaged management for remote work success

A new study from the University of California San Diego and the Massachusetts Institute of Technology examines digital worker surveillance—specifically, the use of software to monitor remote workers’ activities—and tests how effective they are in improving worker performance.

The results reveal that simply applying surveillance is not enough to improve productivity. Instead, productivity is best enhanced when workers are engaged with their human managers and understand the reasons behind managerial decision-making.

These findings may explain why companies, such as Amazon’s and Starbucks’ corporate offices, as well as Disney, JP Morgan and others have issued mandates forcing employees back to the office five days a week, according to the authors of the working paper, which is forthcoming from the National Bureau of Economic Research.

“A lot of organizations adopted new digital tools to manage remote work—for example, digital monitoring tools and new communication platforms, but in the absence of complementary management practices, these tools do not necessarily support remote work success,” said Elizabeth Lyons, associate professor of management at the UC San Diego School of Global Policy and Strategy and coauthor of the study. “Our results suggest the money spent on these digital tools may not have been money well spent, and that might be one of the reasons so many firms are saying that ‘in the longer run, remote work hasn't really worked out.’”

She added, “Investing in managerial capital is probably a better use of resources than investing in monitoring technology.”

Lyons and coauthor Namrata Kala of the MIT Sloan School of Management tested how effective digital monitoring is by a randomized control trial with 434 remote workers on Upwork who were under digital surveillance to monitor productivity.

They were able to identify remote workers with relatively high productivity and relatively low productivity and then randomly assigned both types into three groups.

A third of low-performing workers were told their work output was not as good as managers had hoped and that to improve their performance, they would need to continue to use a digital surveillance tool. Another group was told they needed to improve their performance but were permitted to turn off their digital monitoring tool. The third group were told they needed to improve their performance and to keep using the digital surveillance tool. And to assess the efficacy of the monitoring tools when workers may see it as an unproductive invasion of privacy, these statements were not connected; therefore, the continuation of digital surveillance was not justified based on performance.

Among high-performing workers, one group was told they performed well and as a result, they didn’t have to work with the surveillance tool on anymore. Another third we're told their performance was good, but they had to keep using the surveillance tool. And the third group was told they performed well and that they could work unsurveilled, but the worker’s positive performance was not used to explain the removal of digital surveillance.

Both the removal and continuation of digital monitoring reduced performance when not explained

The low-performing workers who were told to continue to use the digital surveillance tools without an explanation had their productivity decreased significantly (around 17%) compared to workers allowed to opt out of surveillance.

High-productivity workers who were allowed to remove their surveillance without an explanation also showed a major drop in performance (17%) compared to those who remained under surveillance.

“These results reveal that simply applying surveillance is not enough to improve productivity,” Lyons said. “They also suggest that managers need to provide a clear justification for requiring or not requiring their staff to use surveillance if they want it to enhance productivity.”

Lyons added that independent of the actual monitoring activity, the clarity seemed to be what matters in the reduction in performance.

“Even within a single job and workforce where everyone was completing the same tasks, both the removal and the continuation of digital monitoring can harm performance if it's not explained,” Lyons said. “The results emphasize that workers want to understand manager decision-making, which is why engaged management is so important.”

The results echo previous findings from Lyons that show when remote workers communicate regularly with their managers, their productivity is enhanced.

The working paper also found that among high-performing workers, getting to work without a digital monitoring tool was not perceived as a reward. The workers did not indicate to have increased job satisfaction; instead, they reported a desire to be compensated more.

Read the full “Managerial Justification and Digital Worker Surveillance: A Causal Analysis of Remote Work Performance” working paper.