Are Productivity Paranoia and Lack of Trust the Real Obstacles to Hybrid and Remote Work?

Ed. note: Posts published on From the Workplace are written by outside contributors and do not reflect the view or opinion of SHRM. This post was originally published in 2022.

Do bosses trust employees to be productive when working remotely? Not according to a survey by Citrix of 900 business leaders and 1,800 knowledge workers—those who can do their job remotely.

Half of all business leaders believe that when employees are working “out of sight,” they don’t work as hard. Yet this belief contradicts the facts.

Similarly, Microsoft released a study that found that 49% of managers of hybrid workers “struggle to trust their employees to do their best work.” This lack of trust in worker productivity has led to what Microsoft researchers termed productivity paranoia, “where leaders fear that lost productivity is due to employees not working, even though hours worked, number of meetings, and other activity metrics have increased.”

Already before COVID, we had peer-reviewed research demonstrating that remote work improved productivity. A NASDAQ-listed company randomly assigned call center employees to work from home or the office. Work from home resulted in a 13% performance increase and a 50% lower attrition rate. A more recent study from the COVID era with random assignment of programmers either to fully office-centric work or to some days worked remotely found that the hybrid workers had 35% less attrition and wrote 8% more code.

A study using employee monitoring software confirmed that the shift to remote work during COVID improved productivity by 5%. And more recent research from Stanford University showed that remote work efficiency actually increased throughout the pandemic, from 5% better than in-person in May 2020 to 9% in May 2022. That’s because we learned how to be better at remote work.

And really, are workers all that productive in the office? Studies show that in-office employees actually work between 36% and 39% of the time, and spend the rest on nonwork activities like surfing the web.

So why do half of all business leaders ignore the data? The key lies in how leaders evaluate performance: based on what they can see.

Unfortunately, leaders are trained to evaluate employees based on “face time.” Those who come early and leave late are perceived and assessed as more productive.

Even before the pandemic, the focus on presence in the office undermined effective remote work arrangements. Thus, researchers found that remote employees who work just as hard and just as long as those in the office in similar jobs end up getting lower performance evaluations, decreased raises, and fewer promotions.

The problem here is the proximity bias. That term describes how managers have an unfair preference for and higher ratings of employees who come to the office, compared to those who work remotely, even if the remote workers show higher productivity.

The consequence of this proximity bias is leading to the unnecessary drama of forcing workers to return to office-centric work by half of all business leaders who falsely believe that remote workers are not as productive. Many employees—including top executives at places like Apple—are resigning due to this forced office return, and such irrational perceptions will continue to cause companies to lose workers as part of the Great Resignation.

A SHRM survey in June 2022 found that 48% of respondents will “definitely” seek a full-time remote position for their next job. To get them to stay at an in-office job with a 30-minute commute will require a 20% pay raise. Given the significant likelihood of a recession in the near future, which will limit the ability of employers to offer pay raises, we can expect a greater shift to more hybrid and remote work going forward.

And for companies, succeeding in our increasingly remote future will require retraining managers in addressing the proximity bias and evaluating performance based on productivity. Companies will have to teach them to trust the data over their own gut reactions.

Gleb Tsipursky is the CEO of the boutique future-of-work consultancy Disaster Avoidance Experts and the author of seven books, including Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters and Leading Hybrid and Remote Teams: A Manual on Benchmarking to Best Practices for Competitive Advantage.