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Commentary Jack M. Nitles Many people see the recent advances in microelectronics, tele- communications and computer technologies, and their applica- tions to working at home as the coming of a new, bright age, the age of the electronic cottage. Others see these technological ad- vances as forerunners of the return of old forms of repression, exploitation, and losses of individual freedom in a new variation, the age of the electronic sweatshop. Which will it be? The underlying technological change is rapid and intense. Since the late 1 960s the cost of raw computing power has been dropping at an annual rate of 25 to 40 percent. This trend is likely to con- tinue at least into the m~-1990s before its rapid pace diminishes. Personal computers, which first appeared as commercial prod- ucts in 1975, now outnumber other general purpose computers of aD types by ~ to 1. The turn of the century could see general pur- pose computers of significant capability in at least 80 percent of U.S. households and almost aB U.S. businesses, regardless of size. A "significant" computer has the ability to perform most routine and many specialized information processing tasks of importance to a business or a family. Unlike today, most of those future com- puters will be connected, or connectable, to digital telecommuni- Jack M. Nilles is director of the Information Technology Program, Center for Fu- tures Research, Graduate School of Business Administration, University of Southern California, Los Angeles. 133

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134 THE FUTURE cations networks dominated by the telephone system. The accel- erating development of this computer and telecommunications infrastructure provides the basis for several changes. One such change is working at home, generally with the aid of computer or telecommunications technologies, telecommuting. The basic technologies are largely available; the systems technol- ogies need further development for many applications. But a vari- ety of other factors continue to affect the growth and acceptance of workstations in the home. DEMOGRAPHY Specific figures vary, but experts generally agree that nearly half of the U.S. labor force comprises information workers, those whose income clerives primarily from creating, assembling, ma- nipulating, storing, and disseminating information, or operating information processing machines. There is less agreement on the future growth of this sector, particularly as the influence of micro- computers is felt. In the past, the net effect of the introduction of computers has been a substantial increase in the number of infor- mation jobs and a smaller decrease in the number of manufactur- ing jobs.) It is not at all clear that this growth relationship will continue, particularly since business uses of microcomputers are likely to cause shifts in the types of jobs available, emphasizing cognitive skills and Reemphasizing dexterity. In short, managerial and pro- fessional jobs are likely to become more complex, analytical, and diverse. Secretarial and clerical jobs as we now know them will diminish in number and become more routine. Text processing and other traditionally secretarial tasks already are being per- formed by microcomputer-equipped managers and professionals. Data entry clerical tasks are being performed directly by cus- tomers as electronic funds transfer and other network informa- tion services proliferate. If these trends hold, they will have im- portant consequences for telecommuting and, especially, for women in the work force. Almost all secretarial and clerical positions, one-third of the to- tal jobs, are held by women. These generally low-paying informa- tion jobs appear to be most threatened by computer technologies. On the other hand, a large and growing fraction of the new com- puter programmer work force is comprised of women. Computer

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COMMENTARY 135 programmers constitute a large proportion of contemporary tele- commuters, but they are still a small proportion of the total work force. Also, most part-time workers are women. Many of these women work part time because there are not sufficient day-care facilities for their young children. According to U.S. Census data, there is a long-term population trend away from the cities and into rural areas.2 Skilled informa- tion workers, managers, professionals, and technicians constitute a disproportionate share of those people choosing to leave the cit- ies. Most of the managers, professionals, and technicians are men. The nature of managerial and professional jobs, i.e., the need for periods of solitary thought and analysis, is often conducive to re- mote working. Men seem to enjoy working at home, according to the evidence presented in this volume. Women may be less enthu- siastic, looking to office situations to escape from their tradi- tional distaff roles. Ambiguity characterizes most statements about computer work in the home. We simply do not know the details of what is happening to information jobs, nor does anyone seem to be sys- tematically collecting the information. It is clear, however, that change is occurring at an accelerating pace. What does this have to do with telecommuting? All of the tech- nological and demographic trends, insufficiently documented as some may be, point to an increasing predisposition of workers, particularly managers and professionals, toward working at or near home. This predisposition, together with the technological trends, provides necessary but not sufficient conditions for wide- spread home telecommuting. A further requirement is that tele- commuting be attractive to employers. Evidence presented in this volume indicates that this is so. To some extent there is bias in the evidence presented here by organizations experimenting with telecommuting. In all of the cases studied, the home telecommuters were volunteers; all had personal reasons for preferring to work at home at least part time. None were forced or otherwise pressured to telecommute. Most were managers or professionals. Nevertheless, for the reasons just stated, this group may be entirely representative of the ma- jority of telecommuters in the coming decade. The only group not represented here is the set of independent telecommutersthose who have initiated telecommuting as individual entrepreneurs or as employees of organizations that have no formal telecommuting

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136 THE FUTURE experiments or operations in process. This latter group, consist- ing of a mix of full- and (mostly) part-time telecommuters, now numbers from 20,000 to 30,000 individuals. When ~ first began studying telecommuting in 1971, before coming to the University of Southern California, and during the next few years of research on the topic, ~ believed that there were a number of possible barriers to the acceptance of telecommuting. These included employees' fears of change, computers, personal isolation, career arrest, threatened job security, and exploitation; and employer's fears of lowered productivity, increased turnover rates, decreased ability to react to change, any warnings of exploi- tation by organized labor. While these fears still exist, the reali- ties are much less forbidding than the apprehensions on both sides. Nevertheless, the fears and expectations may be much more important than the realities in affecting the growth of telecommuting. PRODUCTIVITY The dominant fear expressed by managers, upon first hearing about telecommuting, is that their employees wiB slack off and become less productive, given the least opportunity. In a more sanguine frame of mind, in 1971 ~ anticipated that productivity would increase for information workers using com- puters in environments more isolated than the average office. Ex- periments in 1973 in the insurance industry supported my as- sumption; productivity of clerical workers and underwriters increased 15 percent in a remote office situation.3 Evidence presented in this volume indicates productivity im- provements for home telecommuters of at least 20 percent in aU cases, with several claims of 50 percent or more for some workers, managers, professionals, and clericals. Even though universally acceptable definitions of productivity are as rare as unicorns, the evidence is distinctly positive. For the skeptics, many reasons can be found for these improvements: more actual work time per day due to fewer interruptions; longer hours in compensation for elim- inated commutes; increased quality due to fewer distractions, greater concentration, and work hours modified to suit individual metabolisms; and stronger work incentives due to a greater sense of "being in control" or to piecework payment systems. All but

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COMMENTARY 137 the last of these items seem unthreatening to the remote employee. The durability of these productivity estimates is evidenced by F International, with its 20-year history of growth based on the competitive advantage of part-time telecommuters, even without sophisticated home terminals, in the United Kingdom and Europe. Our initial expectations were that turnover rates would be re- duced mildly. The 1973 insurance company experiments showed a drop in turnover rate from 33 percent to zero. The experiences of other authors in this volume lead to the conclusion that turnover is substantially reduced, almost to zero; however, no program has been running long enough for any long-term statistical conclu- sions to be reached. (The longest trial reported ran about eight months.) As with the productivity issue, the "Hawthorn Effect" may be a factor in these studies.* The fear of "out of sight, out of mind" can be strong for employ- ees and employers. Employees fear that the boss won't remember them at promotion time, and the boss has nightmares about key telecommuting employees running off to, or becoming, competi- tors. No evidence of either phenomenon has turned up in the cases presented to date. On the contrary, anecdotal evidence gathered at the University of Southern California indicates that organiza- tions with good internal communications systems that include the remote employees, through electronic messaging for example, induce stronger feelings of identification with organizational goals.4 Of course, the evidence also shows the greater importance of good communications between an employer and an employee working in a remote situation. ATTRACTIVENESS Our initial opinion, in the early 1970s, was that home telecom- muting would not be attractive to many people, primarily for so- cial reasons. People would want to remain in the office environ- ment for its social contacts. Yet a primary motivation for *The Hawthorn Effect was first noted in a series of experiments at Western Electric. Production increased when illumination either increased or decreased. The workers were responding to management's interest, per se, in their welfareed.

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138 THE FUTURE corporate home telecommuting experiments is the ability, by means of telecommuting programs, to attract or retain key talent. The ability to work at home is seen as an inducement that is more powerful than salary considerations. The telecommuting environ- ment allows flexible hours, casual cress, decreased stress, and economic benefits. These factors can act as powerful motivators. Social contacts can be maintained by frequent, but not daily, trips to the office. COSTS When we first evaluated telecommuting in 1973, before the ad- vent of microcomputers, we concentrated on the capital, real property, and operations costs. At that time telecommuting looked attractive to employers on the cost basis alone. As central city property costs have escalated over the last decade, and as information technology costs have plummeted, the advantages have become even more striking. As V. S. Shirley of F Interna- tional puts it, indirect costs of telecommuting consist primarily of management and communications, not facilities. Added to this are the reductions in training costs produced by lower turnover, in travel where telecommuting or teleconferencing is used, and in staff requirements (or greatly increased income) resulting from productivity improvements. Some cost increases may result from the necessity to train managers, employees, and coworkers in the finer points of telecommuting. These are expected to be more than offset by the benefits. Cost benefits on the employees' side include reduction in cloth- ing, food, and transportation expenses, the latter possibly offset if the employee buys the necessary equipment and services, such as extra telephone lines, answering machines, and copying equip- ment. Drawbacks are largely related to the need to usurp part of the home for a workplace, or add to the size of the home. If fears of exploitation are realized in the future, then the costs of decreased job mobility and reduced income may well offset any gains for the affected employees. MANAGEMENT ISSUES One general conclusion emerges in this volume: There is no sub- stitute for good management. Telecommuting provides some ad-

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COMMENTARY 139 ditional challenges in this respect. An underlying issue is the ad- versary relationship between managers and employees that seems to be characteristic of organizations in the United States and Europe. When present in a telecommuting situation, this re- lationship can be particularly counterproductive. A typical fear expressed by managers who are first exposed to the concept of home workstations is that their subordinates will take advantage of their invisibility and productivity will plummet. Experiences related here indicate the opposite. Still, the fears remain. Positive experiences are all the result of the development of a high level of trust between manager and employee, augmented by a carefully thought-out system of performance measures to bolster that trust. Good managers should do well in telecommuting situa- tions. Bad managers will founder more quickly than in a tradi- tional office. As further indication of the need for active management, al- most all of the corporate experiments discussed here were the ef- forts of individual managers. Where the experiments have stag- nated or simply stabilized, it is because the responsible individual has left the scene. It is important that the spirit of the experiment be sustained, particularly in situations where there are changes in corporate structure. Employee selection also plays a vital role. The most important attribute of a prospective telecommuter seems to be inner- directedness, the ability to start and complete a task under one's own steam. High achievers probably would make good telecom- muters. According to the authors here, prior familiarity with com- puters does not seem to be a major consideration, nor does prior familiarity with company practices and procedures, provided good communications between managers and telecommuters are maintained. Handicapped individuals with limited mobility may also be exceptionally motivated candidates for telecommuting, since it gives them a special employment opportunity. Three groups might benefit from training specifically oriented to telecommuting: managers, telecommuting employees, and the office staffers who work with the telecommuters. Managers need to develop project status reviews, message- based communication techniques, and methods for coping with the unusual working hours of some telecommuters. Managers also need to develop methods for appraising employee perfor- mance, compensation and benefit plans, career development tech-

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140 THE FUTURE piques, and termination criteria to match the new environment. One of the most sensitive issues may be appraising performance without the use of surveillance. Employees need to develop self-reliance and an awareness of the increased need for quality communications with their supervi- sors and each other. Office workers who interact with telecommuters need to de- velop a better understanding of the changes in working patterns. This latter group is the most often overiookecl in many company test programs. In designing telecommuters' work, the characteristics of the telecommuting environment and of the ideal telecommuter indi- cate the need for task flexibility and employees' control rather than the rigid systems imposed in some work environments. Tasks should be well specified to minimize the loss of time due to misunderstandings. Managers also may be concerned about computer misuse and crime. Clearly, there is greater risk of equipment loss and informa- tion leakage when the information system is physically distrib- uted over a wide area rather than concentrated at a single work site with access control. EMPLOYEE ISSUES Issues of fair employment practices, led by concerns about vari- ous forms of exploitation of workers, are a major component of this volume. Particular attention was directed to nonexempt workers as the most likely to be exploited; the evolution of ex- ploitative situations in the nineteenth century in manufacturing, particularly in the garment industry, and the potential for repeti- tion of these scenarios in information work, particularly secretar- ial and clerical jobs; and the effects of those clevelopments on women in the work force. The AFL-CIO is sufficiently concerned about these issues that it has issued a provisional ban against working at home. The AFL-CTO position typifies the adversarial relationship be- tween labor inch management that is common in many U.S. orga- nizations. The AFI,-ClO has taken a preemptive stance: although there is no known exploitation of telecommuters, the best way to prevent exploitation is to avoid future situations in which exploi- tation could occur. In my opinion this is utterly unrealistic. Infor-

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COMMENTARY 141 mation workers wid on their own begin insisting on telecommut- ing arrangements. Managers impressed by the benefits of telecommuting wiB accommodate these desires. Managers with long-term views of their own success will not engage in exploita- tion. Others win. It is to these "others" that labor groups should direct their attention. Is piecework inherently exploitative? Margrethe H. Olson points out that exploitation tends to occur with piecework, or con- tract work, in a condition of oversupply of labor. The greatest near-term possibility for oversupply of information workers is in clerical and secretarial work, for just these reasons. At present, the demand for managers and professionals with computer com- petence is far in excess of the supply. Whether this wiB be the case 10 years from now is less certain. One interesting result of a ban on home telecommuting for cleri- cal workers is that telecommuting may produce "telescabs." Jobs may be exported to the Caribbean islands, India, and Korea, for example, via telecommunications satellite, resulting in an abso- lute job loss for U.S. workers. Exploitation in piecework most often takes the form of demand for excessive rates of production in a situation that is not easily monitored, such as the home. Computers can effectively monitor work rates and performance. They can serve as watchdogs as wed as tools, provided that the work records are available to groups suspecting exploitation. Thus far, computers cannot distinguish between an adult worker performing a job and a child using the same equipment as an aid to parents. It is not difficult to imagine children as informa- tion workers in situations that violate child labor laws. But is the situation really the same as those against which the laws were written? New, innovative laws may be required to guide employ- ers and parents and to protect children. OTHER LEGAL AND SOCIAL ISSUES Overlaid on the problems of unequal pay and unequal upward mobility for women are the social customs that still require women to be full-time housekeepers and child-rearers even though they also have careers outside the home. Can telecommut- ing have any effect on this situation? Picture the dilemma of the woman telecommuter: At last she can have a career and care for

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142 THE FUTURE her smallchild~ Realistically, however, she cannot do this without day care or by shifting her work schedule to hours when the chil- dren are asleep. It is not possible to use a microcomputer that lacks voice input while holding a small child in your lap. The day- care help may be an older member of the family, such as a grand- parent, creating other consequences for the nuclear family. The shift in work schedule may mean that the telecommuter con only work part time. Many contemporary telecommuter mothers are part-time workers who would be unable to work at all without telecommuting. In short, woman's lot is still not perfect in to- day's work force, but women telecommuters seem to have more options than nontelecommuters. Other issues, including discrimination in compensation, insur- ance, fringe benefits, and occupational safety and health, are largely unresolved for telecommuters. Some companies treat their telecommuters as independent contractors, others as part- time employees or as employees without the full complement of fringe benefits given to in-office workers. Other companies do not distinguish between the two in terms of compensation and fringe benefits. A philosophy of fairness would dictate that if telecommuters are as valuable to a company as other workers they should receive equal compensation and benefits. The value judgment can include the marginal costs to the employer of providing telecommuting capability, provided that it also includes the benefits to the em- ployer of increased productivity. There is considerable variation, however, in existing corporate policies. To a large extent these differences may be resolved in the market. Organizations with the best telecommuting policies will get the best employees. Occupational safety and health issues are more problematical. It is not possible for an organization to control the working envi- ronments of its home telecommuters. Nor is it clear what the re- sponsibility of an organization is for the health and safety of tele- commuters' children who happen to be in the work area. The only definite statement that can be made at this point is that most of these issues have yet to come to light in actual cases. One issue with great local variability is that of zoning restric- tions on home telecommuting. For many families with a sole, part- time telecommuter the issue may be moot since detection of viola- tions of work-at-home zoning restrictions would be quite difficult.

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COMMENTARY 143 However, one variant of home telecommuting could be the neigh- borhood telecommuting node (a local family room or garage) in which a few workers might congregate daily. Here the traffic might present a clear zoning violation. This raises a broader issue: If telecommuting is seen to be good or bad for the general public, how should zoning laws be altered to reflect this judgment? THE FUTURE There are now more than two dozen companies and government agencies that now have, or have had, telecommuting experiments in operation. In 1973 there was one company experimenting with telecommuting; most of the two dozen are relatively recent. Pub- lic and corporate interest in telecommuting is steadily increasing, as is made evident by articles in the media and by the existence of this book. The growth in the number of personal computer owners is astonishing. These patterns are precursors to a steady growth in telecommuting. As large organizations gain more experience with telecommuting, the number of home telecommuting employ- ees win increase. Single-company satellite centers and multicom- pany facilities operations will develop. Possibly equally impor- tant wiD be the grass roots advances in telecommuting produced by individual employees and by small firms utilizing telecommut- ing technologies. In the near term most of these small firms wiB likely be high-technology companies. As the systems technology develops, and as computer literacy grows, the trend will spread to other organizations. A broad spectrum of telecommuting modes win be present a decade from now. Some telecommuters (probably less than 10 per- cent) win work full time at home. Most will work part time at home or in local or satellite centers close to home. Some will rotate their telecommuting, spending a few months or years at it between tours at the traditional central office. All of these statements about the future are conjecture, of course, although based upon our studies at the Center for Futures Research. For them to come to fruition on a grand scale, many of the benefits of telecommuting must prevail and many of the draw- backs must prove to be minor or illusory. Much needs to be done to improve our understanding of the factors involved before we definitely will know the value and potential of telecommuting.

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144 THE FUTURE NOTES 1. Porat, Marc Uri. The Information Economy. Ph.D. dissertation, 1976. Stanford University, Stanford, Calif. 2. Long, Larry and Diane De Are. The slowing of urbanization in the U.S. Scientific American, Vol. 249, No. 1, pp. 33-41, July 1983. 3. Nilles, Jack M., F. Roy Carlson, Jr., Paul Gray, and Garhard J. Hanneman. De- velopment of Policy on the Telecommunications-Transportation Tradeoff, Final Report. Los Angeles: University of Southern California and the National Science Foundation, 1974. Report No. NSF-RA-5-64-020. 4. Steinfield, Charles W. Social aspects of electronic mail systems. Annenberg School of Communications, University of Southern California. Personal commu- nication, June 1983.