“Productivity Paranoia” and What It Means for Remote Work
Remote work seems here to stay, and controversy along with it. Disney, Google, Amazon, Starbucks, and Tesla are among the high-profile companies calling workers back to the office for at least a few days a week, sometimes provoking strong opposition. Amazon workers, for example, staged a walkout to protest the company’s return-to-office (RTO) policy, and Farmers Insurance employees threatened to unionize or quit.
Employers, meanwhile, are digging in. Google recently began telling employees that badge tracking and noted attendance will be included in performance reviews, while reports of people being terminated for failing to comply with RTO policies are proliferating. JPMorgan Chase’s Jamie Dimon said remote workers at his company could simply work elsewhere.
So, what’s inciting this standoff? For one thing, a Microsoft special report on hybrid work and productivity revealed a disconnect between how much people say they’re working and how much leaders think they are working. Of 20,000 people in 11 countries surveyed, 87% of employees reported they are productive at work, while only 12% of leaders said they had full confidence their team is productive.
The report attributed this disparity to “productivity paranoia” where leaders and managers, accustomed to visual cues of what it means to be productive, harbor an unconscious bias that remote or hybrid employees are working less and that productivity must be suffering as a consequence. Yet many studies indicate that remote and hybrid employees actually put in more hours than their on-site colleagues.
From the workers’ standpoint, the tug of war over RTO policies stems largely from the reality that many have gotten used to the flexibility and freedom that comes with remote work. Gallup polling indicates that the share of Americans who prefer working at home at least some of the time has more than doubled since the pandemic to 94%. And some experts contend that remote workers have a greater incentive to be more productive because they value the ability to work from home.
Rethinking Productivity
Productivity, defined as a measure of goods and services produced per hour of work, is higher now than before the pandemic but declined from 2022 to 2023, fanning the flames of productivity paranoia. Some papers have associated remote work with declines in productivity of as high as 19%, while others have reported productivity gains of 13% or even 24%.
Nick Bloom, an economist at Stanford and scholar on remote work, attributes these disparate findings to the fact that productivity differs among remote workplaces depending on whether managers are well-trained to support remote employees. He recently wrote in The Hill that running remote teams is hard but can deliver strong performance when done well.
While Bloom’s own research has found that the impact of fully remote working on productivity has been mildly negative, he strongly believes this can be reversed as our collective mindset evolves. “Remote work is different from office work,” he says, “and needs managers, software and hardware that can support it.”
Similarly, Jeanne Meister, executive vice president at Executive Networks, a San Francisco-based resource center for HR leaders, observes, “Companies are not providing enough on how to be successful working in these new environments. It is easy to lay blame on the workers but what can the employer do to enable remote and hybrid work in a successful way?”
The Microsoft report offers a clue: “[Leaders] need to pivot from worrying about whether their people are working enough to helping them focus on the work that’s most important.” More specifically, this includes:
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Aligning employee work goals and company goals with an eye toward defining what should be deprioritized to get the most critical work done.
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Creating and reinforcing a culture that rewards employees’ impact, not just activity.
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Collecting employee feedback regularly and regularly sharing what they’re hearing, how they’re responding, and why.
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Building a digital community to encourage conversation, strengthen social capital, and connect leadership with employees.
Survey participants who felt they had clarity in their work priorities were 3.95x as likely to say they plan to stay at their current company for at least two years; 7.1x as likely to say they rarely think about looking for a new job; and 4.5x as likely to say they’re happy where they work.
The Bottom Line, Literally
In addition to worker well-being, productivity paranoia denies another fundamental fact: Remote work saves companies money. One way is by driving down recruitment and retention costs as people come to see working from home as non-negotiable. Another is that fully remote companies reduce or eliminate office costs. Wage pressures can also be eased by hiring nationally or globally. And we all benefit from the promise of reducing our carbon footprint and making life easier for working parents and other caregivers.
So even as remote work remains a polarizing topic for some, working from home empowers people by giving them more control over their lives. Many believe putting the genie back in the bottle will be hard. To resolve productivity paranoia, leaders will need to heed evidence that employee well-being is the key to productivity. They will also have to measure what matters, not just what they prefer based on preconceived ideas. Employers who resist this introspection risk alienating their workforce and falling behind in a rapidly changing world.
