Happiness Is Working from Home?
This case describes the decision of Ctrip in China to allow employees the option to work from home and how it was received by the staff involved.
Since the advent of the personal computer and internet Wi-Fi, a proposal to enable employees to work from home has often been debated back and forth, but with little evidence to support or refute it one way or another. Then Ctrip, a Shanghai based company, regarded as “a leading travel service provider for hotel accommodation, airline tickets and packaged tours in China,” conducted an experiment to determine what, if any, impact on worker productivity as well as job satisfaction working from home would produce.
Here is a description of the company and the experiment it conducted:
“The services provided by Ctrip are comparable to Expedia, Orbitz or Travelocity. Ctrip employs about 13,000 employees, of which 7,500 work at two large call centers as customer service representatives in Shanghai and Nan Tong. [The] experiment [took] place in the airfare and hotel booking departments in the Shanghai call center. The representatives’ main job is to answer phone calls, make reservations, and work to resolve issues on existing bookings. They typically work 5 shifts a week, scheduled by the firm ahead of time. Employees are organized by teams, and a team works on the same schedule so individuals do not choose their shifts. The firm adjusts the length of the shift depending on volume of the bookings.” Those participating in the experiment were selected randomly from a group meeting certain criteria: “To qualify, an employee needed to have tenure of at least 6 months, have broadband Internet at home to connect to the network, and to have an independent workspace at home during their shift (such as their own bedroom). 51% of the 996 employees in the airfare and hotel booking departments qualified for the experiment.” Those who qualified were divided into “treatment” and “control” groups, thus allowing researchers to measure precisely what differences, if any, were made by working at home, with all extraneous factors eliminated.
There were three results reported from the Ctrip experiment:
“First, the performance of the home workers went up dramatically, increasing by 12.2% over the nine-month experiment. This improvement came mainly from an 8.9% increase in the number of minutes they worked during their shifts (the time they were logged in taking calls). This was due to a reduction in breaks and sick-days taken by the home workers. The remaining 3.3% improvement was because home workers were more productive per minute worked, apparently due to the quieter working conditions at home.
“Second, there were no spillovers on to the rest of the group – interestingly, those remaining in the office had no change in performance.
“Third, attrition fell sharply among the home workers, dropping by almost 50% versus the control group. Home workers also reported substantially higher work satisfaction and attitudinal survey outcomes.”
When the firm first considered doing the experiment, Ctrip “believed allowing employees to work from home would allow them to save on office space, cut down turnover, and reduce labor costs by tapping into a wider pool of workers, such as people living too far outside Shanghai to commute in on a daily basis but close enough to commute in on a weekly basis. But they were uncertain on the impact of allowing employees to work from home on their performance. Their workforce is primarily younger employees, many of which may struggle to remain focused working from home.” The expected savings in terms of office space, as well as reduced turnover and labor costs, were all confirmed, but Ctrip was pleasantly surprised to discover the increases in performance that were reported.
How to account for that result? The management guru, Peter Drucker, has taught us that an effective manager is one who has learned to remove obstacles to the best performance of his colleagues, both those whom he or she supervises as well as those to whom he or she reports. We could think of the manager’s role in terms of the principle of subsidiarity. The “subsidium” (or “help” or “assistance”) to be given must enable both subordinates and superiors to do their jobs more effectively. It must not pre-empt the tasks or responsibilities assigned to either group, nor usurp their proper operations, even when it might seem easier just to “do-it-yourself” rather than help them to achieve the performance level expected of them. An effective manager, Drucker observes, is more like a good teacher than a boss or a military commander. Real leadership empowers others for superior performance, and does not seek to do it all, as if there were anything heroic about being the only one making a contribution.
Given the surveillance capabilities of internet-based computer networks, any “shirking from home” (in contrast to actually working from home) could be monitored carefully. Those working from home continued to interact with team managers, who remained at the office, and continued to report to the office one day a week. The work at home option reflects the principle of subsidiarity, since those participating enjoy not only the same level of technological support—for example, broadband internet access, up to date computer terminals, etc.—as those working in the office. As Ctrip set it up, the experiment also showed that it was possible to respect the capabilities of others, and even assist them when they need more help to stay on track, without thereby diminishing their human dignity.
At the end of the experiment Ctrip was so impressed by the impact of home-working they decided to extend the option to all their employees who could qualify. They also allowed both “treatment and control groups to re-choose their working arrangements, [with the result that] almost one half of the treatment group changed their minds and returned to the office, while two thirds of the control group (who initially had requested to work from home) decided to stay in the office.” Why so many would change their minds highlights the downside of working at home, namely the increased sense of isolation or loneliness. Some employees felt the need for more social interaction with their coworkers, when opportunities for such were strictly limited by working at home. Clearly, working at home is not a panacea that will solve everyone’s problem of productivity and job satisfaction.
Working from home can only work if there is sustained and adequate supervision. It is more likely to work in certain industries, in specific job categories, in which the use of internet-based computer technology is indispensable for carrying out one’s responsibilities. If you were the HR manager for your firm, or a budding entrepreneur about to start his or her own company, would you trust your employees enough to seriously consider such an option? Maybe you’ve been burnt by employees who seem to put more energy into shirking, whether at work or at home, than they do in performing their assigned tasks. If this is what you’ve experienced, how would you overcome it? Nicholas Bloom, who led the research team at Ctrip, suggests that one reason why working at home may not work is an existing business culture in which workers have been abused or demoralized in the past. They may not even be willing to participate in such an experiment, if they have reason to believe that management is untrustworthy, and lacking an understanding of their own needs and interests. Ctrip was able to sustain its positive results, apparently, by offering its qualifying employees a choice, as well as an opportunity to revisit that choice, if later on, they changed their minds about it. Respecting the choices of others, of course, is a telling sign of a commitment to respecting human dignity. Such a commitment, however, does not mean that anything goes. Employees must be supervised and assisted when necessary, to achieve the goals they and their managers have agreed to. In the end, it all depends on how that assistance is given and received.