Imagine a world where your manager, seated in a glass cabin, gauges your productivity by the number of hours you spend at your desk. Sounds archaic, right? Yet new evidence shows that’s precisely how managers tend to evaluate their employees, systematically undervaluing the productivity of hybrid and remote workers. This proximity bias is the ghost in the machine, the unseen hand pulling organizations back to outdated office-centric models, despite the well-documented benefits of remote and hybrid work.
Nick Bloom, the foremost scholar on hybrid and remote work, recently published two studies that explain why many companies have reneged on flexible work policies and demonstrate the failure of managers to correctly assess the performance of hybrid and remote workers.
These findings corroborate my own observations when working with clients on helping them figure out their hybrid work models: Manager training is the biggest obstacle to effective hybrid work performance for organizations–and a major driver of the continual ratcheting up of days in the office.
How well do managers assess remote workers?
In the first study, Bloom collaborated with other scholars at Stanford University to study the call center employees of a NASDAQ-listed company with 16,000 staff and their findings were published by the National Bureau of Economic Research (NBER). The senior executives of the company wanted to let call center employees work remotely because the leadership wanted to reduce office rental costs and improve retention. However, the leadership felt concerned about allowing work from home (WFH), away from direct supervision, which they worried might lead to shirking.
Many call center employees wanted to work from home to save on commuting time and costs but felt concerned about the possibility of isolation and worried about WFH reducing their promotion opportunities. So the company collaborated with Stanford University to run a randomized control trial. Staff at the call center were offered a chance to apply for a WFH arrangement. Post-application, the researchers randomly selected half of the applicants to work from home while the other half continued their roles in the office environment. The company did not train managers in overseeing WFH staff, nor made any other substantial alterations to adapt to the WFH setup.
The scholars chose several relevant productivity metrics for this trial: minutes worked per shift, calls per minute, and manager assessment of performance. Additionally, they also gauged retention and satisfaction metrics to provide a holistic view.
Over a span of nine months, the WFH group showed a robust 13% performance increase. Delving deeper into this figure, 9% of this increase stemmed from working more minutes per shift due to fewer breaks and sick days, while the remaining 4% came from more calls per minute, most likely due to a quieter working environment.
What about quality? The scholars used two quality measures: conversion rates and weekly recording scores. They calculated conversion rates based on the percentage of phone calls answered that resulted in orders, while the weekly recording scores came from the 1% of phone calls that an external monitoring team randomly evaluated. The WFH group and in-office group had similar numbers, showing that the WFH group had better performance at the same level of quality.
Hopes for a reduction in attrition also proved correct: The attrition rate for the in-office group was 35%, while the WFH group’s attrition was only 17%.
However, managers’ assessment of performance went in the opposite direction. WFH reduced rates of promotion conditional on performance. In other words, based on the improved productivity of the WFH group, they should have been promoted at a substantially higher rate than what the scholars observed over nine months. Unfortunately, with no management training to assess the performance of remote staff, the managers adopted the natural and intuitive "out of sight, out of mind" attitude, underestimating the higher productivity of the WFH group.
The scholars ran some focus groups and reported hearing anecdotal evidence to this effect from both employees and managers. In fact, some employees chose to return to the office to avoid what they saw as a WFH promotion penalty.
And it’s not only peer-reviewed studies that convey such disappointing findings. Numerous surveys show the same outcomes. For example, a survey of 200 C-Suite executives found that 41% believe remote workers are less likely to be promoted.
How about hybrid workers?
Nick Bloom ran another study, this time focusing on hybrid work, with 1,612 employees from two divisions in a larger company with 35,000 employees. Staff with even-numbered birthdays were assigned to a full-time Monday to Friday, nine-to-five schedule, while their odd-numbered birthday counterparts got a flexible hybrid work arrangement. Again, the company made no substantial changes to adapt to hybrid work or to train managers in assessing hybrid work performance.
The researchers evaluated productivity using two primary metrics: lines of code written by programmers and manager assessment of performance. Additionally, the study ventured beyond just productivity, measuring retention, engagement, and sick days to grasp the holistic impact of the work models.
What did they find? The hybrid work group exhibited a 4.4% increase in lines of code written. No surprise there, as this statistic aligns with the productivity boost of hybrid work as shown by other research.
And it wasn’t just about productivity. The hybrid group reported a 33% leap in retention, fewer sick days, and a surge in job satisfaction.
But there was a hiccup: lower managerial satisfaction. Moreover, to quote the researchers, "we found no significant impact of hybrid treatment on employees’ performance reviews or promotion rates." Thus, despite the hybrid work model showcasing a 4.4% increase in productivity, the managerial assessments remained unaffected.
This unchanged lens through which managers evaluated employee performance in hybrid settings revealed a significant oversight. The traditional parameters and biases held firm, overshadowing the actual productivity gains achieved in a hybrid work setup.
Similarly, the fact that the hybrid work model had no significant impact on promotion rates is a telling indication of a systemic issue. The traditional office-centric model, with its easily observable work dynamics, has long been the blueprint for managerial assessments. The shift to hybrid work, although productive, seems to hit a wall when it comes to translating that productivity into recognized performance and subsequent promotions.
The essence of the problem boils down to proximity bias–the inherent belief that physical presence and visibility within an office environment are synonymous with productivity and commitment. This bias is not a mere misjudgment–it’s a career impediment in a world where remote and hybrid work models are becoming the norm rather than the exception.
The doom loop of assessing productivity
It’s no wonder that managers gave remote and hybrid workers lower scores than they deserved, given their higher productivity. After all, they didn’t get any training in managing hybrid work or assessing worker performance.
Companies such as Meta, Amazon, and others that flip-flopped on their commitment to flexible work policies failed to provide effective training for their managers on hybrid and remote management. The managers naturally expressed dissatisfaction with flexible work policies and gave remote workers low performance ratings. The company leadership, getting these unsatisfactory signals from managers, decided to reverse flexible work policies. This doom loop could have been avoided if managers knew how to manage hybrid and remote workers well.
Managers need to learn how to assess hybrid and remote worker productivity effectively–and move away from the typical "management by walking around." Even before the pandemic, extensive research has demonstrated the importance of transitioning away from overarching annual performance reviews. Today, there’s no excuse for managers to stick to this dysfunctional management technique.
The best managers already have weekly or fortnightly one-on-ones with their team members. These meetings should just incorporate performance assessment elements.
With each team member, agree on three to five weekly or biweekly performance goals, ideally making the goals SMART (Specific, Measurable, Achievable, Relevant, Time-Bound) goals for each week. Depending on their roles, these may vary from short-term, tactical goals (schedule seven customer visits), process goals (maintain above 3.5 on customer feedback surveys), bigger tasks (complete the initial research for the report and draft the outline), or collaborative tasks (meet with Bob weekly for a half hour to mentor him). A day before the meeting, have the team member send the manager a brief report of how they’re progressing, what challenges they’re facing, how they might overcome them, a self-evaluation, and propose a few goals for the following week.
When the two meet, the manager assesses the team member’s goal achievements, coaches the team member on how to solve any challenges they’re facing, revises any goals that need to be adjusted, and affirms or revises the performance evaluation. The goals, performance evaluation, and any notes go into a shared document and help inform the more formal annual performance evaluation.
This micro-evaluation ecosystem gives employees a clear performance mirror, provides psychological safety, and guards against overwork and burnout, often byproducts of hybrid or remote setups. It’s a catalyst for nurturing a robust manager-employee rapport–a cornerstone for retention and career ascension. A Gallup survey showed that 75% of employees leave to a significant extent due to a poor relationship with their direct manager.
For managers, it’s a precise way to keep their finger on the productivity pulse of each team member. It also serves as an antidote to proximity bias. Armed with real-time performance insights, managers can make informed decisions–be it project allocations, promotions, or pay hikes. Furthermore, it’s a radar to catch and course-correct performance hiccups early in the cycle, ensuring not just employee success but also a collective team and organizational success, as well as saving the manager a lot of time down the road addressing employee problems.
Until managers get the training they need and deserve, they will continue to feel dissatisfied with flexible work and underestimate the performance of hybrid and remote workers. This intuitive proximity bias can’t be wished away or ignored–it’s the powerful force behind all the flexible work U-turns and the harsh, top-down RTO mandates.
Gleb Tsipursky, Ph.D. (a.k.a. “the office whisperer”), helps tech and finance industry executives drive collaboration, innovation, and retention in hybrid work. He serves as the CEO of the boutique future-of-work consultancy Disaster Avoidance Experts. He is the bestselling author of seven books, including Never Go With Your Gut and Leading Hybrid and Remote Teams. His expertise comes from over 20 years of consulting for Fortune 500 companies from Aflac to Xerox and over 15 years in academia as a behavioral scientist at UNC–Chapel Hill and Ohio State.
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