Economics

In the News

Why new tools of time and task micro-management are counter-productive

Jim Riley

9th January 2020

Calling all employers! What was in your Christmas stocking? Did you find the latest gadget designed to enhance productivity?

The innovative device, featured in the media during the festive season, is a toilet with a downward sloping seat. The company which makes it, StandardToilet, has conducted extensive tests. A slope of 13 degrees is exactly the right tilt to make workers feel miserable without causing any lasting pain.

This way, it is alleged, staff will spend less time on the lavatory and more on their work. Output per worker will rise.

The very slow growth in productivity, the shorthand word for “output per worker”, was a defining feature of the 2010s. Typically, averaging the individual years over the course of a decade, productivity in the UK grows by around 2 per cent a year. During the latest decade, annual growth was barely above zero, at 0.3 per cent a year.

Higher productivity growth means that real wages can increase faster. Bigger pay packets mean more tax receipts for the government, so spending on public services can rise.

Clearly, productivity growth needs to be boosted. But, contrary to the claims, devices such as the sloping toilet may be one of the problems rather than being the solution.

Recent years have seen a surge in technical innovations designed to control in ever more detail the tasks which workers perform. This is particularly the case at the lower end of the pay scales. Think of warehouse jobs, delivery services and the like.

This ultra-micro management of time is intended to increase productivity. Its side effects include high employee turnover, resentment and sheer bloody mindedness.

Why bother to make even the slightest bit more effort than your contract specifies under such conditions? Especially when, with full employment, you can walk into an equally crap job just down the road the very next day.

Nobel Laureate George Akerlof addressed these issues in a famous paper forty years ago entitled “Labor Contracts as Partial Gift Exchange”.

It was stimulated by a study which found that a group of women in a low level, routine job exceeded the minimum work standards of the firm by an average of 15 per cent. This could not be explained by the standard economic theory of rational behaviour.

A key point for Akerlof was that the women did not work in isolation from each other. They interacted. He argued that through these interactions, the workers acquired sentiment both for each other and for the firm. As a result, a situation developed which depended on the "norms" of gift exchange.

On the worker's side, the "gift" given was work in excess of the minimum work standard. On the company's side the "gift" given was wages in excess of what these women could receive if they left their current jobs.

The new tools of time and task micro-management are counter-productive. They ensure that virtually no employee will do more than the absolute minimum required by the contract.

Why not try fur-lined, heated lavatory seats instead?

Jim Riley

Jim co-founded tutor2u alongside his twin brother Geoff! Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs.

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