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Discussion Lessons Learned . Chaired by Joanne H. Pratt, president, Allied Professionals EcI- ucational Consulting Services (APECS). Other participants in- cluded V. S. Shirley (F International), Ronald A. Manning (Con- tro] Data Corporation), Mary McDavid (U.S. Army), Greg Geisler (G Geisler Group), Nelson Phelps (Mountain Bell), Don Miller (IBM Corporation), and Nancy Shoji (American Express). PRODUCTIVITY Q: How is productivity measured when analyzing the work of tele- commuters? PHELPS: At Mountain Bell, we found a 48 percent productivity in- crease among telecommuters. Eight individuals were monitored in the trial. AB had worked for a year or more in the training development arena. We began by looking at the length of time it previously took for these people to produce a quality-level course. Course quality stayed about the same, but they were able to do the course development work in 48 percent less time. Q: How do you explain such an increase in productivity? Are the employees working longer hours? Are they working faster? Or is it a higher-quality product? GEISLER: At Blue Cross, we had some built-in bias in that we were paying our college people on a piecemeal basis and we had just 95

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96 ISSUES AND PROBLEMS recently, say within the past year, installed standards per se on our in-house people. Although it is premature for Blue Cross to evaluate productivity at this time, it is evident that paying tele- commuters on a piecemeal basis for the same work others do in- house and at a flat rate, has resulted in a significant increase in productivity. Q: Is there a difference in the project profitability based on the num- ber of employees on a project, such as those done by F Interna- tional? Do you get a higher return if you have fewer people work- ing on a project? SHIRLEY: Yes, because the shared overhead involved in setting up the project is lower for a few workers, and a smaller group is man- aged more easily. We find the productivity peaks with projects involving 10 or 12 people. The overhead on a very large project can be high. One of our projects, for example, involved 75 people. Project management consumed 30 percent of project costs. SHOWN: American Express worked out a monitoring system that in- cluded both automated and manual productivity measurements, giving us a fairly accurate estimate of what the work was, the volume handled, and how well it was done. Results showed the work-at-home production was actually better than in-house. Working on the basis of the type of work we give our homework- ers, the return time and the quality of work seems to make a difference. Q: Can any of you say that the increases in productivity will be sustained? PHELPS: Our trial project lasted eight months. Toward the end of the project, we began to see a flattening and, in some cases, a dropping off in productivity increases from week to week. I wish that through the trial period we had done something that we are doing now and that is, to ask the employees to keep track of ac- tual hours worked so we do not know if they were putting in more hours and that produced the 48 percent increase. We had decided initially not to be concerned about how many hours they worked. The output is what interested us. In asking the employees about the increase in productivity, we heard different answers. Some said they had not worked more hours in a day than they did at the office, but added that since they were not interrupted as often at home, they felt more productive. However, one individual put in (according to him) 14 to 15 hours a day and worked weekends. He had one of the highest productivity increases. Q: How do you explain the homeworkers' willingness to work longer

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DISCUSSION: LESSONS LEARNED 97 hours? Did your 14-hour-a-day employee have any compensation other than the joy of work? PHELPS: Well, I think if Mike were here he would say, "Hey, I like what I'm doing," and once Mike got involved in a project like this, particularly since he was one of the first that really wanted to try a trial like this, he found it very comfortable and helpful. I don't think Mike was concerned about how much time he worked; it was the project. Q: Most experiments used pre-selected employees. Have any empir- ical data been produced that show productivity gains from em- ployees who were not already high producers, highly motivated individuals? GEISLER: Only about half the people selected to participate in the Blue Cross pilot were preselected because they were high achievers. Several of the employees were college students and coders with no prior telecommuting experience. Blue Cross trained them for the project. Their productivity was lower than those who were preselected as high achievers. The issue of productivity may be overemphasized. As applied to clerical workers, productivity is easy to understand. But tele- commuting by professionals and management people is not go- ing to be measured by productivity gains. It is going to be mea- sured by increased quality of work a difficult quantity to measure. PRATT: These comments support the finding of the APECS re- search, that the electronic age is turning the 5-day, 8-hour-per- day workweek into a 7-day, 24-hour-per-day work and personal week. This could make a striking change in the worker's house- hold. What arrangements and financial support if any, are provided for the physical environment of the homework station? How are lighting, seating, proper storage, keyboard heights, wire management, power supplies, and static control managed? GEISLER: Blue Cross left it up to the employees to arrange the work environment. MANNING: Employees determined where in their residences they wanted to place their equipment. We did install the equipment and provide terminal cables and power interrupt switches. We did not measure correct heights. Employees selected their own work areas. Although we did not survey the workers' families, employees indicated that their homework situation was a benefit to their family styles rather than a negative influence.

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98 ISSUES AND PROBLEMS CAREER ADVANCEMENT PRATT: Professional and managerial employees are concerned about career advancement. Ronald A. Manning of Control Data Corpo- ration (CDC) reports that a survey of people participating in a CDC pilot revealed that 9 employees felt that work at home would help their careers, 7 felt that work at home would hurt their careers, and 11 felt that work at home would have no effect on their careers. How can employers make sure that out-of-sight homeworking employees are being evaluated in a comparable way to on-site employees? MANNING: It is the responsibility of the managers to make sure that all workers are given equal recognition. SHOUT: In addition to equal recognition, the benefits of homework- ers should be equal to the ones of those who work in the office. Our workers are covered completely. When we decided to hire handicapped people on a permanent basis we brought in a bene- fits specialist who told them exactly what they would be getting. The candidate employees decided how these benefits compared with the government benefits they were receiving. PRATT: Does the IRS permit the employee working at home to claim the expenses incurred by a home office if she or he does it volun- tarily or occasionally? McDAv~D: The IRS makes individual rulings about tax allowances for working in the home. Our homeworkers were told, in advance, that if they wanted to claim the extra deduction, it was up to them. They had the supporting documentation, written work agreements, and other background materials, but it was still an issue that would be decided by the IRS. PRATT: What about security data problems in a work-at-home environment? McDAv~D: Information security is not an issue unless workers are processing classified data. However, penetration of security is always an issue. To solve the problem, remotely located employees can randomly change passwords to gain access to a system. This solution also provides automatic notification of abortive attempts to log on, so an audit can be conducted by the system itself. In general, it is not a good idea for remotely located employees to process classified data. PHELPS: There can be a concern for security when training uses sen- sitive, live data bases such as personnel or payroll records. Moun- tain Bell met that problem by using a process in which telecom- muters took the data base material needed and put it in a second,

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DISCUSSION: LESSONS LEARNED 99 less sensitive working file. This allowed access to some live, ogler data, but it was on a separate file so that active files would not be damaged or violated. Also, there were serious discussions with the homeworkers to clarify their responsibility for the files and their use of passwords. GEISLER: Security is not the big problem that the media makes of it. Blue Cross works with 120 programmers; many of them work at home. The company has what we refer to as country club secu- rity. An employee flashes a card ant! is allowed in. There has been no concern about the need for passwords. As a result of program- mers working at home using personal computers, Blue Cross managers are more security-conscious. The procedure now is to use a routinely changing password for external dial-up. This can cause problems. On Friday, for example, the password may be changed because one employee quit. Consequently, program- mers trying to work at home on Monday may not know the new password and will get nothing accomplished. These wrinkles need to be worked out, but they do not make the security issue everything the press makes of it. By design, computers and pro- grams contain enough security to keep most unauthorized people out. SHIRLEY: Another aspect of security, especially if you are running a commercial organization, is the need to protect files from emer- gency situations. What would happen to a client's business if a computer broke down or if there was a fire? Perhaps the best solution is to keep copies of homeworkers' disks somewhere else besides in the home. Duplicate records allow lost files to be recre- ated easily. Home-based project managers, for example, can have information that duplicates that held by regional offices. WHO TELECOMMUTES? PRATT: If so many workers are so positive about work at home, why isn't there an increase in the number of employees tele- commuting? Is there enough relevant work to occupy more homeworkers? PHELPS: Cost and technology are not the factors holding back the growth of telecommuting. On the other hand, management's view of the social issues can slow the trend. These issues include labor, management control, a general disbelief in the long-term potentials of the productivity gains seen so far, and disbelief in the ability to control and secure the homework environment. Changes will come slowly. Attitudes are involved, much the

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100 ISSUES AND PROBLEMS same as they influenced the impact of office automation technology. Management has a lot of work to do to catch up with technol- ogy. At Mountain Bell, work at home was common 50 years ago. The local telephone operator in many communities had a switch- boarcl set up in the front room. Through the miracle of technol- ogy, we now put 300 operators in downtown Manhattan or Wash- ington, D.C., at a cost of $60 a square foot. Neither management nor the technological geniuses have made the connection with the personnel side of subsystem re- search, when large projects are put in place. Instead of designing with an emphasis on people, they try to do that at the end and make it work out. That is where the homework trend may fit in. PRATT: HOW are personal computers (PCs) being used in business? GEISLER: A PC is quite valid as an extension of the office, especially if it is hooked into the office spreadsheets. Blue Cross has offered a personal computer acquisition program for its employees. The company has 70 IBM PCs (reclaimed from hospitals) to offer its workers. The company bought the computers at one-third off the retail price and is willing to sell them to employees at two-thirds of our costs; that means an employee can buy a $3,800 computer for about $1,500. As a result, there are a lot of people who will become computer-literate because of the Blue Cross purchase program. MILLER: In the latter part of 1979, IBM began to look at breaking away from the traditional setup involving a programmer- engineer working in the office, using a terminal accessing a large data base to develop his or her program, circuit, or chip. We were concerned that American industry would have difficulty acquir- ing sufficient numbers of programmers, electrical engineers, etc., in the 1980s. Studies relating to the United States showed a need for roughly 15 percent compounded growth in those disciplines during the late 1980s and early l990s. Statistics from the U.S. Department of Labor showed the possibility of a 3 percent com- pound growth in the number of graduating computer scientists and electrical engineers. IBM researchers asked, how do we make our existing electrical engineers and computer programmers more effective? Their an- swer was to give these workers the opportunity to have an elec- tronic briefcase they do not have to work at home and they do not have to work in the office all the time, but there should be a smooth continuum of their work.

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DISCUSSION: LESSONS LEARNrED 101 IBM started with a pilot in the company's Santa Teresa Labo- ratory. The pilot involved 300 volunteers. That was before the advent of IBM PCs, so 18 intelligent little micros made by other companies were used in addition to 280 or so terminals with lim- ited capabilities. The pilot used existing security and password protection to ensure the protection of unannounced products which the partici- p~nts were dealing with. The people represented a cross section of exempt professional employees, not just superstars, with a reasonably good mix of all performance levels among the engineers and programmers. Par- ticipation was totally voluntary; IBM paid for the phone line and the equipment that was put in the home. The company did not buy furniture or rent space or reimburse employees for electrical current uses. They were surveyed before they received a home terminal to learn what they expected to gain from the pilot. The expectation of productivity gains was exorbitantly high. They were surveyed again, about six months into the pilot, and finally after about a year anal one-half. In addition, we instituted an on- line query as they tried to log off in some 20 percent of all the cases. Questions were forced up on their screen, asking them how they liked that session, what were they doing, anal how their fam- ily felt about their home computer work. So the pilot produced a lot of data. All of the 300 in the pilot had workstations in the home; how- ever, the work done in the home was not in lieu of work in the office except for about 35 individuals. These were allowed to work full time at home, and were looked at very closely. They were marketing and systems engineering people in remote parts of the United States. They showed performance and productivity improvements of several hundred percent because they did not have to drive to the branch office. The IBM pilot made a good, solid case for productivity im- provements, more than enough to justify the cost of telephone, terminal, and associated equipment. In that pilot, IBM clevel- oped enough confidence in the security and its logistic manage- ment ability to expand the program to the rest of the company, now involving about 8,000 remote workstations.

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