Friday, December 29, 2023

Activity vs. Production – What’s Happening, and Why It Would Be Beneficial to Do Better

It’s an ancient problem.  Some workers look busy, but don’t accomplish much.  Some are low-profile, efficient, and quietly, often with lower hours or even apparent effort, get a lot more done.  Some focus on quality, others on quantity. 

How can supervisors and higher-ups best manage these different situations? 

One way is electronic monitoring.  That is nothing new.  When I worked at a data-entry position 36 years ago, supervisors got reports giving workers’ production, though at a coarse level, and other statistics such as how many things they deleted.  That was a start, though not all items produced were the same difficulty.  For most cubicle jobs, though, direct production is harder to assess, and some measures can be simply misleading. 

That issue came to the fore with “Microsoft executives say it’s ‘wrong’ for managers to spy on remote employees’ mouse clicks and keystrokes: ‘That’s measuring heat rather than outcome’” (Grace Kay, Business Insider, September 22nd, 2022).  That is old also – an AT&T second-level manager in a group I was in over 30 years ago had software set up to tell him when a certain worker opened the databases he used; it wasn’t effective for long, as the employee set up something to automatically do that every morning he was scheduled.  The modern version may, per a quote from Microsoft’s CEO, be a result of “productivity paranoia,” especially concerning remote and hybrid workers. 

Another more general involvement area is about working extra hours.  A noticeable indication of that is communicating at unusual times.  However, “After-hours work emails are facing more legal restrictions” (Megan Cerullo, Yahoo Finance, February 3rd).  One example is that “employers in Ontario, Canada are required to have written policies on disconnecting from work that outline when work-related communications, including emails, phone call and video conferences, are prohibited.”  Clearly, “the onus is on both the employer and employee to set boundaries around communicating outside of normal working hours,” and – for that matter, working in general – but often that does not happen.

Going further, Adam Waytz, in the March-April Harvard Business Review, wrote an article printing out to over 12 pages, titled “Beware a Culture of Busyness.”  The idea is also well-established, and the first part, with office people when asked how they were doing saying they were “busy,” matched AT&T culture when I was there.  Per Waytz, “Busyness has become a status symbol,” research has showed that those seeming busy are perceived as ““important and impressive”” and “”morally admirable,” regardless of their output.”  The author described how “a culture of busyness” can perpetuate itself, and named five ways to roll that back: “reward output, not just activity”; “assess whether your organization is generating deep work and eliminating low-value work”; “force people off the clock”; “model the right behavior”; and “build slack into the system.”

A development newer than quiet quitting, or refusing to work additional time or put in unusual effort, is the subject of “Gen Z’s ‘lazy girl jobs’ trend hits back at hustle culture, but critics warn outcome could be problematic” (Taylor Penley, Fox Business, July 29th).  Such arrangements, per the article, are “well-paying often fully or partially remote jobs that require minimal effort to cut back on the stress and anxiety they say is harmful to mental health.”  Per one respondent, they include exercising and doing household tasks during work hours.  Unsurprisingly, “not everyone is on board with the concept,” and it “isn’t gender-exclusive.”  I suspect this trend comes mostly from lax remote-work supervision and standards, with Generation Z workers, with shorter work-experience sets containing little time during low-hiring eras, especially willing to articulate and practice what they want, even if it sounds bad.  If employers can harvest the advantages of clear policies and performance-centered employee evaluations, they can integrate those things with a conscious, focused retreat from busyness culture, and get a net benefit from it, especially considering how those policies can minimize expensive worker turnover. 

Encouraging and rewarding activity over results is not only constructive but good business.  I was a top producer at AT&T, even though I worked little extra time.  When I saw those inflating their hours but not their production, it discouraged me and my kin.  Management did not want people doing the most work moving to competitors, but that was sometimes a needless consequence.  When companies realize why it is poor practice to encourage “heat, rather than outcome,” they can in theory improve this problem.  But can they in reality?  Many managers cannot tell the difference between quality and quantity.  If they can get past that, many will be surprised at how much their businesses will improve.

Friday, December 22, 2023

Artificial Intelligence: More Concerns, Proposals, and Organizational Progress

While there have been various areas of AI progress over the past few months – incremental and automobile-related, anyway – more things have popped up since late November.

In “A.I. Belongs to the Capitalists Now” (The New York Times, November 22nd), Kevin Roose said there had been “a fight between two dueling visions of artificial intelligence,” which with the Sam Altman OpenAI firing-and-rehiring had been won by “Team Capitalism,” which held that “A.I. is a transformative new tool, the latest in a line of world-changing innovations that includes the steam engine, electricity and the personal computer, and that, if put to the right uses, could usher in a new era of prosperity and make gobs of money for the businesses that harness its potential,” instead of something “that must be restrained and deployed with extreme caution in order to prevent it from taking over and killing us all.”  We’ll see.

A solution to one of AI’s huge problems?  Possibly, in “Big Companies Find a Way to Identify A.I. Data They Can Trust” (Steve Lohr, The New York Times, November 30th).  That day, “a consortium of companies (released) standards for describing the origin, history, and legal rights to data,” along with “intended use and restrictions.”  The limitations seem a way of stifling unwanted findings, but the first part appears mandatory – but what about data already incorporated?

“AI microdosing” (Drake Bennett, Bloomberg, December 1st) presented a comparison with recent experiments in doing that with hallucinogenic drugs, suggesting that the software be allowed tiny but real hallucinating capability, as “imagination – at the margins – is hard to distinguish from” that.  Reasonable, but first we need to get better control over the current state of that problem.

Back to organization, we saw “How Nations Are Losing a Global Race to Tackle A.I.’s Harms” Adam Satariano and Cecilia King, The New York Times, December 6th).  Mainly that’s slow execution on regulation, as “A.I. systems are advancing so rapidly and unpredictably that lawmakers and regulators can’t keep pace.”  So why can’t they focus on, say, ChatGPT, as it’s obtainable and in use now?  They may need to react to other products as they come out, but until they do emerge, we need to concentrate on what we actually have.  Similarly, from the same date and the same publication, “Experts on A.I. agree That It Needs Regulation.  That’s the Easy Part” (Alina Tugend).

The sort of thing we would do well to see more of was the focus of “Microsoft and labor unions form alliance on AI” (Jackie Davalos and Josh Eidelson, Benefit News, December 11th).  The software company “will provide labor leaders and workers with formal training on how artificial intelligence works,” but not until a year from now, and both sides will be “incorporating worker perspectives and expertise in the development of AI technology,” along with “helping shape public policy that supports the technology skills and needs of frontline workers.”  The idea’s implementation success, of course, is unknown.

Finally, “Should A.I. Accelerate?  Decelerate?  The Answer Is Both” (By De Kai, The New York Times, December 10th).  This is partisan political complaining about the technology being used “to amplify polarization, bias and misinformation,” that “A.I.’s are manipulating humanity,” and so “we need to decelerate deployment of A.I.’s that are exacerbating sociopolitical instability.”  Unfortunately for the author, companies have their own agendas.  Develop your own product and you can direct it as you want.  Until then, we need to be personally responsible for what we believe.  And artificial intelligence will wander into 2024 with its massive achievements, and disasters, still in the future.

Friday, December 15, 2023

From 2023 Into 2024: Nine Areas of Jobs and the Economy

How did this year turn out with economic and employment Issues?  What is likely in the next?

I can only go so far with the latter, as a lot can happen, especially in a year with an unusually critical presidential election.  But we are now heading in some direction with each of these nine areas, and so can say something.  I also feel confident about making annual predictions, as I was in a small minority of economists expecting no 2023 recession.  Will I do as well in 2024?

The first area is employment statistics and the American Job Shortage Number, or AJSN.  From November 2022’s Bureau of Labor Statistics Employment Situation Summary data to a year later, we added 2.79 million net new nonfarm payroll positions.  Since our population, including children and those not wanting to work, rose by 2.43 million, that’s tremendous.  Seasonally adjusted and unadjusted official joblessness went from 3.7% and 3.4% to 3.7% and 3.5%.  The adjusted total number of unemployed increased from 6.0 million to 6.3 million, with the count of long-term jobless, or those out for 27 weeks or longer, holding at 1.2 million.  Those working part-time for economic reasons, or keeping less-hours positions while thus far unsuccessfully seeking full-time ones, gained 300,000 to 4.0 million.  The labor force participation rate jumped 0.7% to 62.8%, and the employment-population ratio grew 0.9% to reach 60.8%.  Average hourly private nonfarm payroll earnings grew $1.28 or 4.2%, more than inflation, to $34.10.  The AJSN showed that latent demand for work fell 155,000 to get to 15.646 million.  Overall, though there were some unfavorable gains, these numbers remain strong.  Expect more of same next year, with continued unemployment below 4% but fewer new jobs.  That would again be excellent – and still recession-free.

Second, we have four-day workweeks.  Per my December 1st post, I see no progress on pertinent questions that must be answered, such as salary amount change, idle time during workdays, no Friday equivalent, and, most importantly, what a switch to 32 nominally scheduled hours would mean for workers now putting in way over 40.  I see interest fading in this option in 2024, with other alternatives, such as flexible hours and hybrid work, to get its adherents.

Third is autonomous vehicles.  This has been a terrible year for them, with gains approximately offset by San Francisco rollbacks caused by traffic and emergency interference.  It has seemed clear since at least 2021 that there will be no imminent large-scale move to them, but even slow growth was lacking in 2023.  The next will be a critical year for the technology – look for some retrenching and some new locations and applications, but strictly incremental progress.  How 2024 turns out will define where fully driverless cars, buses and trucks will go, which could be back to widespread hopes, steady and slow proliferation, or near-extinction.

The fourth area is electric vehicles.  Strangely, 2023 was both very good and very bad for them.  It was a success since one million were sold in the United States alone, and they made up 7.5% of November-to-November sales, a massive increase.  The bad news is in the title of the source article for these facts, “The electric vehicle math isn’t adding up, with average transaction price around $50,000 and gas price nationwide falling to $3 a gallon” (Alexa St. John et al., Fortune, December 7th).  With charging stations becoming available in almost all areas with high demand, a high share of those who wanted them have accepted their shortcomings and bought, whereas those less interested are, if anything, becoming even more unlikely to buy.  Being forced to cheer for higher oil prices is a hard position to maintain, and fundamental sale price drops may require more to be sold than the market can support.  I predict that by November 2024 the share of electrics as American vehicles will be higher than it is now, but only about 10%, with a growing consensus that under current conditions they will not be completely or even largely taking over.

Fifth, I give you artificial intelligence.  In February, I wrote that “we’ve been sort of stunned by ChatGPT’s recent exploits, which not only suddenly forced people to adjust their methods but solidly moved AI from the future to the present.”  To what extent has this continued?  AI was in use well before then, and there have been some currently running achievements and improvements, particularly in the automotive field, but for various reasons over these past ten months we have seen only small, incremental effects on most American’s lives.  When I posted a promotional message about my latest AI post, “Artificial Intelligence is an Awfully Wobbly Juggernaut,” documenting lack of broad-based progress, a former Silicon Valley worker sent me 18 points to be intended to be to the contrary.  I counted only four actual applications new since February, along with three already in place before then, eight on business deals and technical achievements focusing on the future, and three claiming general large-organization use.  While it is beneficial for those developing technology to focus on the future, it is necessary also to see what has actually been completed and how it measures up to projections.  The problems I named in the August 25th post as causing AI to be “boxed in” – dishonest employee use distorting results, feeding on its own errors by reading in AI-generated erroneous information, the looming new-data shortage, copyright violations awaiting legal judgments, chip shortages, the uncertainty of coming regulation, and the gigantic cost of future releases, along with reasonable and unreasonable fears about it and a consistent lack of will in enduring temporary problems to implement major technical and logistical improvements – are all still valid, and will probably truncate AI’s effects.  I expect that while in 2024 there will be many more AI-enhanced niches, its overall effect will be more modest than that of mobile phones, with the world-conquering fears and sweeping expectations becoming far rarer.

Sixth is remote work.  This year it met with great resistance, as the pendulum on which its enthusiasm has swung for 30 years moved away from it.  As I have written, businesses often learn little from experiences, and when they again discover the advantages of either working from home or working from the office, they do not remember what went wrong or right before.  There are two sides to the issue, meaning that putting in time remotely is not a panacea, and will not take over.  I project non-office workdays to slightly decrease in 2024, with de facto industry standards calling for few employees in most fields to be granted more than one per week.

Seventh I move to interest rates.  It was an event when on Wednesday the Federal Reserve not only held them the same as expected but announced that they projected cutting interest rates three times next year, and the Dow Jones Industrial Average jumped over 500 points and hit an all-time high.  But how can they attach any conviction to that?  Did they anticipate in December 2021 that a year later the federal funds rate would be almost 5% higher?  They carefully consider recent inputs, weigh a range of factors, and only then decide – and we should all be glad that their 2022 choices turned out that way.  Whether they reduce rates three times, eight times, or not at all in 2024 will depend on data we don’t yet have and can’t really estimate.  I predict that we will indeed pay less for money in a year, but only about 1% or 1.5%, and I certainly am not confident enough about it to even pencil that in.

Eighth, how about investments?  I don’t have much to say here.  Predicting a massively profitable 2024 is unjustified.  There are a lot of problems in the world, and we may add one of our own in November.  A historically justified 5% gain in general seems as good a projection as any.

Last, public beliefs on the economy.  There has been a string of articles discussing that as if it were a problem of its own, and to some extent it is.  Many people are less happy about our economic times, most of whom are influenced by not knowing firsthand what a real recession is like or following the stated views, designed to affect voting, of their political party.  It is easy to take bad individual experiences, such as being fired or not hired, as reflecting everyone’s condition.  I predict that, by year’s end, people’s opinions will be more in line with reality.  That’s optimistic, but irrationality often corrects itself.

For more information on these areas, see other posts in this blog.  With that, here’s to a prosperous 2024, especially for you and your family.

Friday, December 8, 2023

Jobs Report Roars Back – AJSN Shows Latent Demand Down Almost Half a Million

Last month’s Bureau of Labor Statistics Employment Situation Summary was the worst all year.  But any thoughts that it would start a trend were dashed this morning.

In November, our economy added 199,000 net new nonfarm payroll positions.  That was not only at the high end of published predictions – the ones I saw were 150,000, 190,000, and 200,000 – but four times what we needed to cover population increase.  All but one of the statistics I report on improved.  Seasonally adjusted and unadjusted unemployment reached 3.7% and 3.5%, down 0.2% and 0.1%.  The number of people with jobs gained 473,000 to 162,149,000, and officially unemployed, seasonally adjusted, dropped 200,000 to 6.3 million.  The long-term jobless out for 27 weeks or longer fell 100,000 to 1.2 million, and those working part-time for economic reasons, or holding on to shorter-hours propositions while seeking full-time ones, lost 300,000, getting to 4.0 million.  The measures of how common it is for Americans to be working or counted as technically jobless, the labor force participation rate and the employment-population ratio, rose 0.1% and a large 0.3% to arrive at 62.8% and 60.8%.  Average hourly private nonfarm payroll wages added 10 cents, more than inflation again, to $34.10.  Those claiming no interest in work were 9,000 more numerous and numbered 94,839,000.

The American Job Shortage Number or AJSN, the metric showing how many additional positions could be quickly filled if everyone knew they would be easy to get, lost 488,000 from last month, and ended up at this:

Ninety percent of this month’s change was due to fewer unemployed and fewer American expatriates, the current State Department estimate of whom fell one million.  The share of the AJSN from those officially jobless was 33.5%, down 0.5%.

Compared with a year before, the AJSN decreased 154,000, with the change in expatriates, and in those wanting work but not looking for it for at least a year, more than offsetting an increase in the jobless count. 

If we draw a two-month line from September to November, we get average monthly jobs gains of 174,500, adjusted and unadjusted unemployment each down 0.1%, 100,000 fewer officially jobless, long-term unemployment unchanged, the employment-population ratio the same but the labor force participation rate up 0.4%, those working part-time for economic reasons down 100,000, people employed up 480,000, and the hourly wages above up 22 cents.  The AJSN fell 543,000.  The only minus is the count of those denying any interest in work, which over the past two months increased 428,000. 

All that means we’re still doing superbly.  We, in general, more than cancelled out the previous month’s disappointing showing.  No recession, no shortage of work, wages strong, and inflation at 3%.  Overall, these are great times for the American economy.  The turtle took a double-sized step forward.

Friday, December 1, 2023

Four-Day Workweeks – Do They Make Sense?

Since the five-day, 40-hour week was solidified in the 1930s, people have talked about full-timers reporting for less.  It seemed like the logical next step, but 90 years on we have seen no such thing. 

There are several reasons for that.  The schedule has worked well.  People can coordinate family and leisure activities effectively, given that they are spending, plus commuting, only about one-quarter of their regular working weeks there.  Overtime can be easily added to either weekdays or weekends.  Studies have shown that productivity starts to fade after about that number of hours.  Remote work, though, has destroyed the barrier between home and office, so is it possible we are ready to cut back from the venerable Monday through Friday?

In “Push for a 4-day work week picks up steam – and critics” (Fox News, February 5th), Aaron Kliegman summarized the contemporary situation.  “A growing number of lawmakers, business leaders, and academics are pushing for the U.S. to embrace a four-day work week, leading critics to question the wisdom of what would be a cultural sea change for the country.”  While some pointed out that “not every business is able to cut its work time while maintaining the same level of salaries,” others called it “something that offers a real win-win possibility for both employers and employees,” and “academics have been increasingly floating the idea,” along with “a recent CNN opinion piece” which said its advocates were ”striking a blow at the absurd American culture of overwork.”  Or, perhaps, as a Wharton processor put it, she did not think that “our employers are going to believe that you can get as much work done in four days as in five.”

The last view did not seem the most common, as “Is the US ready for a four-day work week?” (Austin Westfall, Fox Business, also February 5) told us that “Research from Robert Half, an employment agency, shows a large majority of US managers (93%) support a four-day workweek for their team,” and “the data shows 64% expect their company to transition to one within the next five years.”  No surprise, though, is the headline of “Employers tried a 4-day workweek program.  Employees said they were healthier and happier” (Marina Pitofsky, USA Today, February 21st).

So where is the middle ground?  Perhaps it’s described in “The pros and cons of a 4-day workweek” (Paula Peralta, Benefit News, September 7th).  In the former category, Peralta named “requested by employees” (41% in a “recent” study conducted by the International Foundation of Employee Benefit Plans), “retention strategy” (36%), “work-life balance and rethinking company culture” (36%), and “recruitment strategy” (27%).  The points against four-day workweeks were “lack of interest by upper management” (42%), “difficulty implementing it organization-wide” (38%), “negative impact on business operations” (36%), “unsure if it would work with organization structure” (36%), and “unable to support the customer base” (32%).  “Alternatives” named in the survey were “working remotely on certain days of the week (hybrid)” (75%), “flexible work hours (61%), “working remotely full-time” (50%), “part-time schedule" (35%), and “compressed workweeks” (24%). 

If we are going to have four-day timetables, we would need to address a few more things.  First, if only some companies have them, it could put great pressure on ones in the same industries to do that as well, unless they paid their five-day employees up to 25% more.  Second, it could call for changes in how much idle time cubicle workers would have – perhaps they would not be enthusiastic about shorter schedules if they were expected to produce more per hour.  Third, there in most cases could be no Friday equivalent, no day where expectations, performance, and office hours are often lower – would that be acceptable to everyone?  Fourth – and this is the problem nobody seems to want to address – if people are now working more than 40 hours per ordinary week, what would a 32-hour schedule really mean?  Answer and get reasonable agreement on these and I can stand behind four-day workweeks – if not, they just plain won’t succeed.