Talent Management By Peter Cappelli/Talent Management Columnist
HR Leadershıp
Ever heard of the term
“algorithmic management”?
It came out of the world of
academic computer science,
as an attempt to explain how
“gig” companies such as
Uber manage their workers.
It’s the idea that you can get
workers to do what you want—
essentially manage them—by
sending them algorithm-based information about their
performance and nudging them
into using it to perform better.
Although many people
seem to use the term “gig
economy” to describe any casual
employment relationship, it is
used in a distinctive fashion to
refer to working arrangements
that are managed through
electronic platforms. Current
examples include rideshare
giants Uber and Lyft, as well
as Upwork—the consolidation
of oDesk and Elance—which
matches workers with clients
that need IT tasks done, while
newer operations like Task
Rabbit connects local workers
with homeowners who need
small projects completed.
The gig economy is a whole
lot smaller than the attention it
receives; just 1 percent of the
U.S. labor force is engaged in
any meaningful way working
in it. But it is new and different,
and that gets a lot of attention.
The other important point
about the gig economy is that all
the workers are contractors, not
employees, meaning employers
aren’t supposed to supervise
them. Their work is defined by
a contract, which considerably
limits flexibility to influence how
they perform. Managers can
monitor workers’ performance,
but the work is being done
far away from the company
managing the platform, so how
do they get the contractors to
behave and perform well?
This is the idea behind
algorithmic management. Think
about the “surge pricing” in
ride services—to entice drivers
to come out and head to busy
locations by raising how much
they are paid—or “
rate-your-driver” requests that encourage
passengers to monitor the
performance of drivers whom
the company other wise couldn’t
see.
That’s only the beginning,
though. Enter behavioral
economics and further
efforts to manage—or
manipulate, depending on your
perspective—the behavior
Are Algorithms Good Managers?
of these contractors. One
technique familiar to users of
TripAdvisor and Yelp is the
creation of fake goals with
honorific achievements for
motivation: “Only one more
ride/review/purchase to reach
elite contributor level!” If you’re
like me, you find yourself
saying, “Well, why not just do
one more?” (Of course, if you’re
really like me, you’ll then say,
“Nah, this is stupid.”)
What’s clever about
algorithmic management is
that it is about the only way
to influence workers on these
platforms and keep them in
contractor status. But what I find
puzzling is employers’ interest
in algorithmic management.
If they have employees, they
can supervise them, direct
their work and use modern-management tools to get them
to do what they want. So why
the interest in using electronic
platforms?
I’ve got the feeling the
appeal is not as a complement
to supervision but as a
substitute for it. In other
words, if we can nudge
employees along with these
data-based tools, we don’t
need to supervise them. But
given how little time we spend
with supervision already, this
seems like a big mistake.
Peter Cappelli is the
George W. Taylor Professor
of Management and director
of the Center for Human
Resources at The Wharton
School of the University of
Pennsylvania in Philadelphia.
Send questions or comments to
hreletters@lrp.com.
In our daily lives, Apple’s
Siri navigates decisions
on everything from
our restaurant choices
to dialing friends, while Amazon’s Alexa helps
us make grocery lists, remember appointments
and, in general, run our homes. As leaders
shaping the culture of our workplaces, it’s
important to understand that workers are also
consumers. As they lead blended lives and often
work from anywhere, any time, they anticipate
the same artificial-intelligence- and technology-
enabled experiences that they receive as
consumers. One study found that a majority
(68 percent) of workers are ready to work with
AI and are positive about its potential impact on
their jobs.
HR professionals can guide leadership to
respond to these changing needs in three areas.
Let’s start with reimagining work. This is
what an urban medical center did to respond to
physician burnout, largely caused by doctors
spending too much time behind computer
screens doing reporting and administrative tasks.
How did AI help? It listened in on doctor-patient conversations and transferred
relevant information into forms and medical
records. Essentially, medical staff was armed
with a note-taking assistant, which, in effect, strips
away a doctor’s administrative duties, leaving
more time for human interaction.
As AI develops, it opens new possibilities
for growth—which brings me to the
second area where we can encourage AI
development: finding new opportunities
for value creation. Consider a cruise-ship
company that equips crew members with Wi-Fi
medallions, allowing them to collect insights into
what passengers want onboard. That information
can be used to anticipate needs and discover new
ones, enhancing both customers’ and employees’
satisfaction and experiences.
AI Is Changing the Workforce
By Eva Sage-Gavin/HR Leadership Columnist
Training and “reskilling” will serve
as the foundation for reimagining work
and creating these new sources of value.
Our workforces require new skills
and innovative approaches to training that use
the technological advances causing this sea
change. For example, one retailer is using Oculus
Rift virtual-reality headsets to immerse its sales
associates in real-world scenarios.
Retail and “tech-conscious” industries have
had to react to these market shifts quickly.
With the help of algorithmic-design software,
an athletic apparel company optimized product
development for light shoes with a stiff sole
that is ideal for sprinters’ athletic needs. The
company used 3-D printing on prototypes and
tested them until they found the premier design.
Great examples are emerging across industries,
and leading companies are bringing innovative
consumer insights into both their workplace
strategies and worker experiences.
The workforce, conversant in using AI in its
everyday life, is ready to engage. Leaders need
to make the transition to these new technologies
a priority since workers want to engage with
companies where their skills will continue to
grow. Investments in learning, technology-enabled tools and ways of staying relevant and
competitive in the workplace are part of the
changing social contract that workers expect. We
know that the key to competitive advantage is to
focus on areas that create new value by reskilling
workers using AI and other technological
advances.
Eva Sage-Gavin is a former CHRO with more
than three decades of experience in Fortune 500
corporations. She currently serves as the senior
managing director for Accenture’s global talent
and organization consulting practice and as
a technology board director. Send questions or
comments to hreletters@lrp.com.