Why Productivity Paranoia is the Real Obstacle to Remote Work

Do bosses trust employees to be productive when working remotely?

A recent Microsoft study found that 49 percent of managers of hybrid workers “struggle to trust 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.”

That data aligns with a new report by Citrix based on a global survey 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.

That traditionalist perspective aligns with Elon Musk’s demand that all Tesla and SpaceX employees work full-time in the office—including knowledge workers. Musk has stated that remote workers only “pretend to work.”

Musk’s demand for improving productivity via full-time, in-office work for knowledge workers is something to which other traditionalist leaders aspire. A Microsoft survey shows that 50 percent of bosses intend to force knowledge workers into the office by Spring 2023. According to Future Forum, skepticism toward working from home tends to come from leaders over age 50. Leaders under age 50 are more accepting of hybrid and remote work and focus on how to do it well.

Is the belief of this traditionalist, older half of the business leadership that workers are more productive in the office based on facts? Not at all.

Even before Covid, peer-reviewed research demonstrated 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 percent performance increase and a 50 percent 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 hybrid workers had 35 percent less attrition and wrote 8 percent more code.

Employee monitoring software confirmed that the shift to remote work during Covid improved productivity by 5 percent. And more recent research from Stanford University showed that remote work efficiency actually increased throughout the pandemic, from 5 percent better than in-person in May 2020 to 9 percent 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 percent and 39 percent of the time, and spend the rest on non-work 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 “facetime.” 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 the unfair preference for and higher ratings of in-office employees, compared with remote workers, even when remote workers show higher productivity.

A related mental blindspot, confirmation bias, caused traditionalist leaders to ignore information that goes against the beliefs to which they’re anchored, and seek information that confirms their anchors. For example, they’ll seek evidence that in-office workers are more productive, even when there’s much stronger evidence that remote workers exhibit higher productivity. In other words, these leaders trust their own gut reactions, internal impressions, and intuitions over the facts, thus failing to develop self-awareness of how their mental processes might steer them to make bad decisions.

The consequence of this trust in false impressions around which type of work is more productive is leading to the unnecessary drama of forcing workers back to the office. And the traditionalist bosses who do so will continue to lose workers as part of the Great Resignation.

The Society for Human Resources found that 48 percent of respondents will “definitely” seek a full-time remote position for their next job. To get them to stay at a hybrid job with a 30-minute commute, employers would have to give a 10 percent pay raise, and for a full-time job with the same commute, a 20 percent pay raise. With a potential recession looming, which will limit pay raises and lead to a focus on actual productivity over false gut-based intuitions, we can expect a greater shift to more hybrid and remote work going forward.

To succeed in our increasingly hybrid and remote future will require retraining managers to address the proximity bias and evaluate performance based on productivity. Companies will have to teach them to trust the data over their own gut reactions.

Contributed to EO by Dr. Gleb Tsipursky, who helps EO members seize competitive advantage in hybrid work by driving employee retention, collaboration, and innovation through behavioral science as the CEO of the future-proofing consultancy Disaster Avoidance Experts, and authored the best-seller Leading Hybrid and Remote Teams: A Manual on Benchmarking to Best Practices for Competitive Advantage.

For more insights and inspiration from today’s leading entrepreneurs, check out EO on Inc. and more articles from the EO blog.