Bossed Around

Kevin Lewis

August 03, 2022

When your boss is a robot: Workers are more spiteful to robot supervisors that seem more human
Kai Chi Yam et al.
Journal of Experimental Social Psychology, forthcoming

Robots are transforming organizations, with pundits forecasting that robots will increasingly perform managerial tasks. One such key managerial task is the evaluation and delivery of feedback regarding an employee's performance, including negative feedback. However, within this context of delivering negative feedback, we suggest that anthropomorphism -- a factor most practitioners and researchers consider as a panacea for overcoming difficulties in human-robot interaction -- can backfire. Drawing upon the theory of mind perception, we find that an anthropomorphised robot supervisor delivering negative feedback is more likely than a non-anthropomorphised robot to be perceived as possessing agency. This perceived agency causes perceptions of abuse to arise, which in turn leads to higher supervisor-directed retaliation (operationalized as powering down the robot supervisor; Study 1). These findings even extend to third-person observers witnessing the delivery of negative feedback, again culminating in supervisor-directed retaliation (Study 2). We conclude by discussing the theoretical and practical implications of these findings.

Firms with Benefits? Nonwage Compensation and Implications for Firms and Labor Markets
Paige Ouimet & Geoffrey Tate
University of North Carolina Working Paper, April 2022

Nonwage benefits have become increasingly important and now represent 30% of total compensation (BLS, 2021). Using administrative data on health insurance, retirement, and leave benefits, we find dramatically lower within-firm variation in benefits than in wages. We also document sharply higher between-firm variation in nonwage benefits, compared to wages. We argue that this pattern can be a consequence of nondiscrimination regulations and the high administrative burden of managing too many or complex plans. Consistent with this mechanism, we show that the presence of high-wage workers in unrelated divisions of a firm as well as workers hired in high-benefit local labor markets positively predicts their colleagues' benefits, controlling for occupation, wages, state, and industry. This dynamic has implications for employee turnover. We find that the resulting high benefits reduce employee departures, particularly among low-wage workers, for whom the benefits comprise a larger percentage of total compensation. We also find evidence that firms with more generous nonwage benefits reduce their reliance on low-wage workers more than low-benefit peers, suggesting that constraints to the provision of benefits affect the distribution of human capital across firms.

The endowment effect and the trading of draft picks in major professional U.S. sports
Jeff Hobbs & Vivek Singh
Economic Inquiry, forthcoming

Several studies have examined the endowment effect. Others have documented the influence of behavioral economics in sports. However, there exists little research on the endowment effect in sports. We study this phenomenon through the trading of draft picks in three major professional sporting organizations: the National Basketball Association, National Football League, and National Hockey League. We find strong evidence of the endowment effect overall and varying degrees of it across leagues. We find that it exists beyond information asymmetries, differences in trading activity, the prior short-term trading relationships of the teams involved and the desire of non-endowed, one-time owners of picks to repurchase those picks. 

When peer comparison information harms physician well-being
Joseph Reiff et al.
Proceedings of the National Academy of Sciences, 19 July 2022

Policymakers and business leaders often use peer comparison information — showing people how their behavior compares to that of their peers — to motivate a range of behaviors. Despite their widespread use, the potential impact of peer comparison interventions on recipients’ well-being is largely unknown. We conducted a 5-mo field experiment involving 199 primary care physicians and 46,631 patients to examine the impact of a peer comparison intervention on physicians’ job performance, job satisfaction, and burnout. We varied whether physicians received information about their preventive care performance compared to that of other physicians in the same health system. Our analyses reveal that our implementation of peer comparison did not significantly improve physicians’ preventive care performance, but it did significantly decrease job satisfaction and increase burnout, with the effect on job satisfaction persisting for at least 4 mo after the intervention had been discontinued. Quantitative and qualitative evidence on the mechanisms underlying these unanticipated negative effects suggest that the intervention inadvertently signaled a lack of support from leadership. Consistent with this account, providing leaders with training on how to support physicians mitigated the negative effects on well-being. Our research uncovers a critical potential downside of peer comparison interventions, highlights the importance of evaluating the psychological costs of behavioral interventions, and points to how a complementary intervention — leadership support training — can mitigate these costs. 

How Hybrid Working From Home Works Out
Nicholas Bloom, Ruobing Han & James Liang
NBER Working Paper, July 2022

Hybrid working from home (WFH), whereby employees work a mix of days at home and at work each week, has become dominant for graduate employees in the US. This paper evaluates a randomized control trial on 1612 engineers, marketing and finance employees of a large technology firm that allowed odd birthday employees to WFH on Wednesday and Friday and kept even birthday employees full time in the office. There are four key results. First, WFH reduced attrition rates by 35% and improved self-reported work satisfaction scores, highlighting how employees place a considerable value on this amenity. Second, WFH reduced hours worked on home days but increased it on other work days and the weekend, highlighting how home-working alters the structure of the working week. Third, WFH employees increased individual messaging and group video call communication, even when in the office, reflecting the impact of remote work on working patterns. Finally, while there was no significant impact of WFH on performance ratings or promotions, lines of code written increased by 8%, and employees' self-assessed productivity was up 1.8%, suggesting a small positive impact. Given these benefits for retention, job satisfaction, and productivity, after the experiment ended the firm extended hybrid WFH to the entire company.

Proximity and the Management of Innovation
Chloe Kim Glaeser, Stephen Glaeser & Eva Labro
Management Science, forthcoming

We study the effect of proximity to corporate headquarters on the productivity of inventors and research and development (R&D) facilities. Distant inventors and R&D facilities are less productive, and plausibly exogenous reductions in the travel time from these inventors or facilities to headquarters increase their productivity and creativity. We hypothesize that these improvements in the management of innovation production occur because proximity improves monitoring, managerial ability to provide direction, relationship building that supports creativity, and information exchange, including advice from headquarters. Consequently, our results suggest that proximity can help managers balance both exploration and exploitation when overseeing innovation. Naturally, these results then beg the question of why firms do not locate all inventors and R&D facilities in close proximity to headquarters. We find that distant inventors and R&D facilities are located in areas with better general economic indicators, and especially more favorable tax rates, than headquarters, suggesting firms balance these benefits against the benefits of proximity when locating innovation production. 

Conceiving opposites together: Cultivating paradoxical frames and epistemic motivation fosters team creativity
Ella Miron-Spektor et al.
Organizational Behavior and Human Decision Processes, July 2022

To successfully generate creative solutions, teams must reconcile inconsistent perspectives and integrate competing task demands. We suggest that adopting a paradoxical frame - a mental template that promotes recognizing and embracing the simultaneous existence of seemingly contradictory elements - helps teams navigate this process to produce creative ideas, if team members are epistemically motivated. Our results from two laboratory studies (N = 950) suggest that teams that adopt paradoxical frames and have high epistemic motivation develop more creative solutions than teams with paradoxical frames and low epistemic motivation or epistemically motivated teams with frames that only encourage information sharing. Teams with paradoxical frames and high epistemic motivation are more creative because they engage in idea elaboration – they exchange, consider, and integrate diverse ideas and perspectives. By contrast, other teams settle on suboptimal middle-way solutions that do not address task demands. Our research advances knowledge of why and when paradoxical frames benefit team creativity, by unpacking the processes that enable teams to leverage task and team tensions. We show that when teams collectively work through their tensions and elaborate their diverse ideas they become more creative.

Behavioral Biases among Producers: Experimental Evidence of Anchoring in Procurement Auctions
Paul Ferraro et al.
Review of Economics and Statistics, forthcoming

Experimental research in behavioral economics focuses on consumer behaviors. Similar experimental research on profit-maximizing producers is rare. In three field experiments involving commercial agricultural producers in the US, we detect evidence of anchoring in competitive auctions for conservation contracts related to nutrient and pest management that were worth, on average, nearly nine thousand dollars. In these auctions, the value of the starting cost-share bid was randomized to be either 0% or 100%. When the starting value was 100%, final bids were 46% higher, on average. We find weak evidence that experience with conservation contracts may modestly attenuate the anchoring effect. 

Cultivating a Leadership Pipeline: Using a Real Options Lens to Understand Executives’ Strategic Staffing Decisions
Michael Campion et al.
Organization Science, forthcoming

This paper adapts real options theory to explain how executives create and maintain real options portfolios within leadership pipelines. Hypotheses flowing from our theorizing predict that executives often make seemingly risky staffing decisions for leaders who occupy stepping-stone positions. Focusing on their option (future potential) rather than project (current productivity) value, executives laterally transfer leaders in stepping-stone positions frequently, despite it resulting in lower short-term job performance, but often promote these leaders at lower levels of performance and sooner. Once leaders are promoted to destination positions where they may stay indefinitely, executives tend to transfer high-performing leaders more often but not when they are still improving the effectiveness of their current unit. We present evidence suggesting that executives make these decisions to improve other units and maintain a flexible system, possibly recapturing previous investments in developing those leaders. We provide empirical support for our hypotheses using eight years of data in a large retail organization (n = 25,004) where executives overseeing thousands of units made internal mobility decisions. These findings refine real options theory, show that it explains these phenomena better than existing theories, and provide important and immediately usable practical implications for executives.


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