Managers and Employees Disagree About Remote Work

 Remote work is one of the biggest changes to working since World War II, but it’s being held back by a major disconnect between managers and employees. Case in point is Elon Musk. He decreed in November that employees must come into the office, only to walk it back after it threatened to speed up the pace of resignations. It was a “hardcore” mistake by Musk, but a less dramatic version of the same story is playing out across the economy. 

Managers and employees disagree profoundly about key aspects of work-from-home, according to surveys we’ve conducted. For instance, managers believe that work-from-home reduces productivity while employees think it massively increases it. 

Part of the disagreement seems to hinge on what people think counts as productivity. Employees tend to include commuting time in their mental calculation, and so they think not having to commute when they work from home counts as an increase in productivity. Managers tend to ignore commuting time when they think about productivity: They just care about how much work is getting done each day.  

In theory, both sides could be right, as a simple hypothetical example illustrates. Imagine a worker who bills $1,000 a day pre-pandemic (a measure of output) and works nine hours plus one hour of commuting. They are producing $100 for every hour they spend working or commuting. Now imagine they work from home: Commuting time is zero and they still work nine hours. If they bill $950 a day, that’s an increase in productivity from their perspective: Now they’re producing $106 for every hour they put toward the job.  

But from the manager’s perspective, things look different. Because they don’t count time spent commuting, pre-pandemic they think of the worker as producing $111 per hour ($1000/9 hours). Now, with work-from-home, that worker’s productivity has fallen to $106 per hour. If the employee’s salary has stayed the same, the firm is getting less output for their money. 

These are made-up calculations, and most workers’ output can’t be calculated this way — even if people thought like this. And, as mentioned above, in many cases productivity per hour actually increases when working from home. But it illustrates how important the commuting disconnect can be in explaining different perceptions of productivity. The answer depends in part on what gets counted. 

Productivity is not the only place where managers and employees disagree. They also have very different ideas about the disciplinary consequences of not coming into the office. We asked both managers and employees what happens to workers who stay home on “work days.” Employees were far more likely than managers to answer “nothing,” while managers were more likely to say that the worker was risking termination.