Data Can Make for Cutthroat Coworkers

The introduction of data to the workplace has been hailed as a revolution as often as it has been assailed as a digital Big Brother. Just last month, The Wall Street Journal deemed data "the new middle manager"—a way for start-ups to transparently take cost-cutting measures that are backed up by numbers.

At the same time, another trend has been taking hold in the management realm: an increasing emphasis on employee happiness and teamwork. Keeping employees content and engaged is widely considered important for both productivity and profits.

But what happens if you try to prioritize both of these trends at the same time? Three researchers from New York University and Columbia University looked at a trucking company in the midst of an internal culture change to see how these initiatives interacted with each other. The study followed over 5,000 drivers at approximately 150 locations. The company was starting to apply lean management, a philosophy pioneered by Toyota that emphasizes teamwork and empowering employees. Lean initiatives are meant to change employee-manager relationships, and at this company it included drivers running meetings and working together to reorganize their workplace. Meanwhile, the company was also starting to monitor the performance of all their drivers using electronic onboard recorders. Driver performance was measured based on efficiency: a score was given for the difference between the average miles per gallon and the potential miles per gallon. Data was also collected on how much fuel was lost from drivers idling, speeding, or shifting inefficiently.

"So they have this question, which is, "What do you do with all this data that you're suddenly getting?'" explains Claudine Gartenberg, an assistant professor of management at New York University Stern School of Business and one of the authors of the study.

One option is to make it public. In a randomized experiment, the researchers tested how posting driver performance affected workers exposed to the older, more competitive company culture, as opposed to the new collaborative environment. They also tested whether publicly ranking employees' performance by name had the same effect as ranking them by anonymous ID numbers.

They observed that promoting competition and teamwork at the same time is likely to backfire on managers. "What we found was that this friendly competition works great under the old way, when people are used to [seeing things as] every man for himself and you're getting judged on your own performance and merits," says Gartenberg. "Under the new [culture] where corporate had passed down this message that 'We're a team, we're working together, and drivers matter,' people responded really badly to the naming and shaming of people."

In the old work environment, the posting of public rankings saw an improvement of nearly 4 percent in fuel efficiency. In the new, more collaborative work environment, however,  the performance rankings reduced fuel efficiency by 13 percent and cost the company up to a million dollars over a year. Further, the rankings with only anonymous ID numbers didn't move the numbers much. Gartenberg says that while this was unexpected to the two economists of this study, her psychologist co-author wasn't surprised, as people tend to react minimally when no names are attached to perceived adversaries. In other words, workers don't feel threatened by anonymous report cards.

As for why the collaborative-environment drivers reacted badly to managers nudging them to compete with each other, Gartenberg says that companies sending two opposing messages to their staff should rethink their strategy—as employees will react badly to mixed messages. Which doesn't mean that it isn't good to use data, but rather that managers need to be careful about management philosophies that might collide.