The rise of the gig economy has also given rise to a new approach for managing these remote, distributed workers: algorithmic management. Uber is perhaps the best and most well-known example of algorithmic management, relying on its app to instruct drivers which passengers to pick up and the best route for getting them to their final destination.
To better understand this approach and its effect on employees, researchers from the University of Miami Business School and Warwick Business School in the U.K. recently conducted a study of Uber’s algorithmic management style, the results of which they published in an HBR article. Despite Uber and similar companies championing the flexibility and autonomy their business model offers, the study found that Uber drivers have real reservations and resentments about algorithmic management.
The authors wrote, “Our research reveals that algorithmic management is also frustrating to workers, and their resentment can lead them to behave subversively with the potential to cause real harm to their companies. Our research also suggests some ways that companies can mitigate these concerns while still taking advantage of the benefits of management by algorithm.”
The following are a few key tips for companies considering this model:
- Share information: While it may not be possible for management to share the algorithm itself with employees, sharing the data and goals that informed it can go a long way in increasing transparency and making workers feel more included in the approach.
- Invite feedback: The Uber study found that drivers feel constantly scrutinized by the platform’s algorithms and directives. To address these feelings and foster a more collaborative environment for employees, the researchers suggest that Uber and other companies practicing algorithmic management find ways to “democratically include them in decision-making.” Examples they cite include inviting employees to committees designed to discuss internal regulations or involving them in the design of algorithmic-driven systems.
- Build trust: It’s important that any organization considering algorithmic management proactively look for ways to build trust among employees. An easy way to do this is by implementing benefits that demonstrate how much the company values its workers. For example, better sick pay or family leave or offering financial support in the case of unexpected life events.
The Uber study’s authors wrote, “Given the rapid pace of technological progress, and the tempting economic benefits for companies, we believe that algorithmic management will become more common in the coming years.” As more organizations embrace this model, it’s important they be cognizant of the considerations outlined above to temper some of the natural resentment employees feel when they are managed by faceless algorithms.
For more on how technology is changing workforce management check out these previous APEX posts on how technology is changing how people work here and on how data is empowering employees here.