Pro's and Con's of Telework from the Employers Perspective - Literature review Example

?Employment practices have undergone change due to economic pressures and turbulent changes in the business environment. The organizations have responded by being proactive and adapted to the rapidly changing business environment (Lim & Teo, 2000). One of the human resources practices that has enabled flexibility and has been adopted by many organizations is teleworking. Teleworking, a flexible way or working, enables employees to work from any location through the use of information and communication technologies (Perez, Sanchez, & Carnicer, 2003). Large organizations such as AT&T, Cigna, Eli Lilly, Hewlett Packard and Nortel have teleworking programs for their employees. Teleworking is an instrument that can alter the organization’s competencies (Illegems & Verbeke, 2004). Teleworking has multifaceted implications for the individual, for the organization as well as for the society. This paper evaluates the advantages and disadvantages of teleworking from an employer’s perspective. Lim and Teo (2000) define teleworking as a work arrangement where employees can work out of home during or outside office hours. Teleworking has also been defined as “Periodic work out of the principal office, one or more days per week either at home, a client’s site, or in a telework center (Nilles, 1998 cited in Hill, Ferris & Martinson, 2003). It involves working through different satellite offices or other remote locations away from the company office (Golden, 2006). Contact is maintained through different office equipments powered by communication and information technologies such as through computer modems, facsimiles and electronic and voice mail systems. This is the reason that teleworking is more prevalent in countries that have more use of electronic communication. Teleworking is done part-time from home or other remote locations and this results in best output as it can prevent social isolation of the workers (Perez, Sanchez, & Carnicer, 2003). The central idea of teleworking is based on two factors – work has been relocated and opportunities are inherent in technology. Teleworking has helped removed the geographical and organizational boundaries of the traditional centralized workplace. Because of the flexible work practices, teleworking has also been able to attract and retain scarce skilled staff. The IT industry has a high employee turnover rate globally. Frequent displacement of employees affects the morale of those who remain in the organization. Teleworking can be beneficial to the organization if the employees have a positive attitude towards it. The potential advantages include reduction in office space requirement, capital savings for the organization, and possibility of retention of scarce skills and talents in the organization (Lim & Teo, 2000). All of these in turn could boost the morale of the remaining employees. However, it is important that the employees have a favorable attitude towards teleworking. This has also been found in the case of Spanish firms where the organization can benefit only if the employees are involved in design and programming their own tasks (Perez, Sanchez, & Carnicer, 2003). If employees focus on self-management skills and are able to organize their schedules, set priorities, meet deadlines and asses their own performance, teleworking can be beneficial in Spain. This is because the HR managers are not familiar with technology and its implications. However, the same may not work in the UK as it requires shift in management culture (Perez, Sanchez, & Carnicer, 2003). To encourage teleworking initiative and adoption, an innovative culture is essential to foster and stimulate change as this makes adoption easier. Teleworking provides the organization to improve the way they manage their working activities in all areas of the value steam. To beat the talent war and scarcity of skills, offering such flexible working system enables the organization to offer something beyond the remuneration “deals” (Morgan, 2004). Telework helps to attract, motivate and retain employees whose knowledge and skills are valuable and rare, and this can lead to superior performance (Illegems & Verbeke, 2004). The number of women employees is growing in every sector and teleworking helps in using their talent by addressing work-life balance issues. Productivity and performance is also enhanced which is evident through loyalty towards the flexible “enlightened” employer (Morgan, 2004). In addition to these, the organization accrues natural cost savings due to efficiency gains and reduced overheads. Costs to a company can be direct costs or indirect costs. Direct costs include the separation costs such as exit interviews or accrued vacation (Hill, Ferris & Martinson, 2003). Other direct costs include vacancy costs such as recruitment of temporary workers, and also new hire costs. The indirect costs that may not be planned include low productivity of incumbents and the cost incurred by the company during the learning curve of new employees. Teleworking, while offering workplace flexibility, also helps during times of organizational transformation and during workload fluctuation (Sanchez, Perez, Carnicer & Jimenez, 2007). It also enables to outsource non-organization specific jobs. During business expansion, teleworking also helps the employer to have better control over building space, support facilities and costly equipment. Teleworking can also change the spatial and temporal structures at work and contribute to general capabilities, difficult to duplicate. Companies also consider teleworking as a social benefit offered to the employees. This helps to establish psychological contracts in retaining qualified knowledge workers that have difficulty in maintaining work-life balance. Employers also find that monitoring mechanisms also have to differ. Direct control and supervision have to be replaced by management by objectives, as management by results is more suitable for remote working. This requires the employer to invest in trust in the remote worker. Teleworking also offers the employer financial flexibility as they can offer variable compensation to the teleworkers. This can fit the employees and the employer goals much better than fixed compensation systems. Teleworking is also beneficial for employers that engage temporary employees, contractors and consultants as it helps to reduce or avoid exit costs. As it has reduced commitment to full-time employees, it is in a better position to respond to the changing market conditions and business demands. Space is always a constraint and teleworking avoids the need to move to larger space. An organization can offer services to the customers even outside the office hours, thereby enhancing its customer services, which can also help it gain competitive advantage (Morgan, 2004). Teleworking has helped respond to the changing business environment, through speed and agility. It enables the employer to provide opportunities to disabled people or specialist staff on a temporary basis. Through teleworking the employer can respond to competitive challenges because of information dissemination and responsiveness. This has also led to reduction in staff absenteeism and sick leave; in effective utilization of office space, in augmenting corporate image as an innovative employer, and most importantly, in increasing staff retention as they value flexible working. An employer’s innovativeness is further enhanced when telework is combined with virtual teams because it enables the organization to respond to the turbulent environment “instantaneously” (Workman, Kahnweiler & Bommer, 2003). The environment enhances feelings of freedom and flexibility thereby developing spontaneous intimacy and solidarity with virtual team mates. Virtual teams are usually formed as a result of mergers and acquisition and telework is assigned to employees that have a successful record with the company. However, the virtual teams have not been found to be successful because it reduces worker commitment to their jobs and towards their virtual teammates (Workman, Kahnweiler & Bommer, 2003). This is because of an unstructured environment without boundaries, and free from constraints of time and location. They feel distanced from the sentient world of interactions. However, compatibility with virtual team mates also depends upon their cognitive styles and the richness of the media. Despite all the benefits discussed above, organizations may have difficulty in controlling performance, while chances of loss of data security also exist (Lim & Teo, 2000). If the teleworking programme is not implemented effectively or is not appropriate to the job requirements, it can have adverse effect. The role of the managers is important here because teleworking must be managed and not established as a program of work (Morgan, 2004). It needs constant reviewing, revising and investing in. It requires substantial planning and training (Illegems & Verbeke, 2004). Many managers may not be willing to allow self-management to employees. Hence the attitude of the managers is important for the success of such programs. Insufficient knowledge and experience of the managers can lead to negative outcome thereby jeopardizing the benefits from teleworking (Lim & Teo, 2000). The employer must also allow for sufficient scope and freedom, as this alone can stimulate performance and productivity. They have to challenge the conventional wisdom in the organization. Information overload due to technology is considered a deterrent to the success of teleworking as this leads to ambiguity and makes choices difficult. In addition, the medium of communication can distort perceptions or convey wrong perceptions. For instance, through telephone conversations it may not be possible to detect emotive nuances, such as the difference between excitement and agitation (Workman, Kahnweiler & Bommer, 2003). Resolution of computer screens may make the electronic texts difficult to read. Staff may feel isolated which in turn could impact performance and productivity. These the disadvantages that an employer has to be prepare for. Teleworking can have implications on the performance evaluation system of the organization. Employees may not be working at the same time as the manager and hence the performance evaluation would not be based on the measurable results delivered but on the subjective view of the manager (Hill, Ferris & Martinson, 2003). The managers also carry the attitude that since they do not see their employees working, how they can be sure of the output. They are unable to accept a result-oriented business culture. Sometimes managers and employers argue that information access and exchange are barriers to teleworking implementation but this only shows the cultural resistance within the organization (Morgan, 2004). As mentioned earlier, implementation of teleworking requires cultural change within the organization. They also give reasons that coordination in teleworking is difficult, implying that that attitude has to change to accept the benefits of teleworking. However, difficulties do arise for the employers because controlling and coordinating working activities outside the base office can be challenging. Employers may not be adequately knowledgeable about the concept of teleworking and hence they are unable to identify it with the employees’ autonomy (Perez, Sanchez, & Carnicer, 2003). They are used to measure employee commitment to the length of hours spent at the workplace and use it for salary increments and promotion. They are unable to consider promotions based on remote locations. Thus, it can be seen that teleworking offers numerous benefits to the employers. These include reduced costs, the ability to attract, motivate and retain talent, the ability to attract scare skills, the opportunity to offer social benefits to the employees, the ability to experience financial flexibility by way of variable financial packages to employees. Capital costs too can be controlled as spatial requirement is reduced. It enables forming virtual teams that help the employer to respond to the changing business environment instantaneously. However, several disadvantages have also been perceived. This is because many organizations, employers and managers are unable to understand the benefits of teleworking and hence do not have the right attitude to derive the benefits. Organizational culture change is also essential to understand and accept teleworking as an innovative business model. The managers perceive difficulties in evaluating performance due to lack of physical contact and communication. Even virtual teams have failed as they lack commitment towards the organization and their virtual team colleagues. An unstructured environment without boundaries does not give rise to commitment due to which organizational productivity and performance can suffer. Managers also lack trust in their employees which is a prerequisite to the success of teleworking. Teleworking requires freedom and flexibility to be granted to the employees and they are expected to self-manage their schedules and deadlines. However, managers and employers do not seem keen to allow this flexibility. For teleworking to be a success the organizational culture has to undergo change; the attitude of the employers has to change, and appropriate knowledge and understanding of how it should be implemented, is essential. Most importantly, technology adoption is critical to the success of teleworking. Reference: Golden, T.D. (2006). Avoiding depletion in virtual work: Telework and the intervening impact of work exhaustion on commitment and turnover intentions. Journal of Vocational Behavior, 69, 176–187 Hill, E.F., Ferris, M., & Martinson, V. (2003). Does it matter where you work? A comparison of how three work venues (traditional office, virtual office, and home office) influence aspects of work and personal/family life. Journal of Vocational Behavior, 63, 220–241 Illegems, V., & Verbeke, A. (2004). Telework: What Does it Mean for Management? Long Range Planning, 37, 319–334 Lim, V.K.G., & Teo, T.H.S. (2000). To work or not to work at home-An empirical investigation of factors affecting attitudes towards teleworking. Journal of Managerial Psychology, 15 (6), 560 - 586 Morgan, R.E. (2004). Teleworking: an assessment of the benefits and challenges. European Business Review, 16 (4), 344 - 357 Perez, M.P., Sanchez, A.M., & Carnicer, M.P. (2003). The organizational implications of human resources managers' perception of teleworking. Personnel Review, 32 (6), 733-755 Sanchez, A.M., Perez, M.P., Carnicer, P.L., & Jimenez, M.J.V. (2007). Teleworking and workplace flexibility: a study of impact on firm performance. Personnel Review, 36 (1), 42 -64 Workman, M., Kahnweiler, W., & Bommer, W. (2003). The effects of cognitive style and media richness on commitment to telework and virtual teams. 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