Phantom Boss: The down side of Algorithm Management

#creativity, #productivity, #social interaction, Human well-being

Algorithms are increasingly employed to automate managerial duties across diverse industries and environments. Entities such as Amazon, Uber, UPS, 7-Eleven, IBM, and Uniqlo utilize algorithms to monitor the activities and performance of their workforce, whether it pertains to overseeing drivers, warehouse operations, or monitoring retail sales and evaluating employee skills.

This shift towards "algorithmic management" unquestionably provides companies with enhanced efficiency and profitability. Nevertheless, it may also lead to unintended consequences and feelings of detachment, particularly within the dynamics of the workplace.

A recent study conducted by researchers from TUM, the University of Vienna, and Wharton has revealed the impact of algorithmic management on prosocial motivation, which is pivotal in fostering creativity, productivity, social interactions, and overall well-being in the workplace. Through this analysis, a notable and thought-provoking gap has surfaced: Employees under algorithmic management demonstrate reduced inclinations to assist or support their colleagues compared to those overseen by human supervisors.

There is no doubt that algorithmic management presents numerous new avenues for companies to enhance their operational efficiency. However, the full impact of this practice on individual well-being, collaborative dynamics, and team cohesion is still emerging. Therefore, companies should proceed with caution as they adopt algorithmic management systems.

In particular, they must take proactive measures to address the potential negative consequences that algorithmic management may have on prosocial behavior, considering its fundamental importance to overall workplace success at both individual and collective levels. Striking a balance in this regard will require diligent efforts on the part of companies as they navigate the implementation of algorithmic management practices.

In case if you want to read the original article: "Deployment of algorithms in management tasks reduces prosocial motivation" - Computers in Human Behavior