Social Loafing and Pseudo-Productivitis: An Infectious Disease
Social Loafing and Pseudo-Productivitis: An Infectious Disease
Part 2 in a series on the dangers of excessive cooperation
The first part of this article series told two stories of collaborative people whose benign actions led to unintended consequences and ruin. This post will cover a different story: one where the culprits are neither innocent nor malicious, and everyone deserves some of the blame. Today, we are relocating from the Desert of Good Intentions to the opposite end of Leadership Land – let’s go skinny-dipping in the Straits of Conflicting Interests.
Benevolent Brenda: A Pathological Parable
Brenda is a Leadership Land nomad. She promoted quickly in the corporate world until a rival, envious of her rising star, misdirected her into the Career Swamp. She next joined a government agency, only to find herself locked inside a rigid hierarchy where promotion was only possible when someone retired or left (and no one ever did…darn government pensions). She then job-hopped to a non-profit organization but knew that her days were numbered. The non-profit had no endowment and depended entirely on the largess of donors for financial life support. When wallets snapped shut during the Great Recession of 2007-2009, Brenda re-invented herself yet again as an entrepreneur.
Brenda was determined to infuse her new business with the best experiences of her career, while protecting it from the toxic elements. She obtained a B Corporation certification for her company, selected new employees with great care, and paid them well. She built a fortress balance sheet like she had done in her corporate days, re-created the charitable culture of her old non-profit, and offered an employee benefit package comparable to that of her government pension1. In the aftermath of the Great Recession, Brenda’s business was an oasis in the desert. By taking care of both customers and employees, she inspired loyalty in both.
After a few years, however, the business began to stagnate. Brenda’s employees seemed busier than ever, but inventory took longer to clear out. Customer complaints gradually increased in frequency and intensity, and took longer to resolve. Brenda tried to address the problems in the most obvious way – by hiring more employees – to no avail. The new employees simply increased her expenses without commensurately increasing revenue. What’s worse, Brenda’s urgency to reverse the decline in profits caused her to lower her hiring standards. For the first time in her career, Brenda discovered an employee stealing from the business and summarily fired him.
Pseudo-productivitis: An Organizational Disease
Brenda received an unexpected call from an old mentor, who asked to catch up. Brenda was reluctant to tear herself away from her ailing business, until her mentor asked an armor-piercing question:
It sounds like you’re spending your days bailing water out of your sinking ship. Would you rather plug the holes, instead?
With her mentor’s guidance, several things dawned on Brenda:
As the company expanded, the diffusion of responsibility allowed each employee to exert less effort than if they had been individually responsible. This phenomenon is called social loafing.
Employees had discovered that signaling productivity to Brenda had the same outcome as actual productivity. In fact, pretending to be busy helped deflect new assignments. Whether they appeared to work or actually worked, Brenda’s employees kept to the same schedule and received the same pay.
By failing to address these problems, Brenda signaled that lower standards were now acceptable. She further lowered the bar by hiring new employees in a hurry.
Behaviors are infectious. When other employees witnessed social loafing and productivity-signaling with no negative consequences, they began doing it too. If Brenda hadn’t taken swift action against the thief, other employees probably would’ve developed sticky fingers.
Brenda’s mentor diagnosed her company with pseudo-productivitis, an infectious disease that spreads throughout organizations. It follows a similar pattern wherever it’s found:
Social loafing → False signals of productivity → Lowered standards and expectations → Organizational epidemic
Brenda had to confront an ugly truth: pseudo-productivitis had infected her company years ago, but the symptoms had been mild enough to remain at the edge of perception. Had Brenda been blind? Or had she been subconsciously avoiding the uncomfortable conversations needed to reverse the malady? Had she been so engrossed in protecting the borders of her utopia that she failed to notice the rot festering within?
Bitter Medicine
Before Brenda could launch a nuclear strike on her self-esteem, her mentor disarmed her with another pithy proverb:
The best time to plant a tree is 20 years ago. The second-best time is now.
These calming words arrested Brenda’s downward spiral of self-doubt, allowing her to focus on identifying and plugging the holes on her sinking ship.
First, Brenda deduced that she was trapped in a maelstrom within the Straits of Conflicting Interests. She was interested in the vitality of the business, its customers, and its employees, but her employees were mostly interested in themselves. As long as there existed a divergence between the company’s and employees’ interests, employees had low resistance to pseudo-productivitis. Some employees may have felt duty-bound to reciprocate Brenda’s benevolence, but their motivation crumbled when they watched colleagues reap the same rewards while doing less work.
Second, Brenda recognized that:
People have a natural tendency to maximize rewards with minimal effort. This desire for energy efficiency is not a character flaw. In a world where most people prefer the path of least resistance, Brenda’s innate drive and restless energy provides a competitive advantage.
People are masters at self-deception. When Brenda’s employees succumbed to pseudo-productivitis, they rationalized their behavior with “everyone else is doing it” and other mental gymnastics. Brenda was equally guilty; she thought she was practicing her values of cooperation and service to others, but in reality, she was enabling bad behaviors.
Brenda concluded that most of her employees acted deceptively, but not maliciously (an application of Hanlon’s Razor). She resisted the urge to punish them; she wanted to destroy the disease, not kill the host organism.
Finally, Brenda decided that the best way to cure pseudo-productivitis is to align her employees’ interests with the company’s. She implemented many changes, including:
Equity for senior employees who have proven their worth
A year-end bonus for all employees, based on company performance
A profit-sharing plan, also based on company performance2
An extension of the company retirement plan vesting schedule to the 6-year maximum, which encouraged employees to stay for at least that long
Four weeks of mandatory paid vacation per year. Employees could use the paid time off in 1-week blocks within a calendar quarter, or 2-week blocks within the first and second halves of the year. Not only would employees come back to work refreshed, but someone else would fill in during their absence and check for deficiencies in their work.
By putting employees’ skin in the game, Brenda vaccinated them against pseudo-productivitis. However, no vaccine is perfect; regular checkups and preventative care are also necessary to catch early-stage cases and quarantine the affected employees until the disease could be expunged. To that end, Brenda also implemented new internal controls and random audits to contain the contagion.
This was bitter medicine for long-time employees who were accustomed to freedom. The single most common complaint: the new policies are paternalistic. Some found the treatment for pseudo-productivitis to be unpalatable and left the company. Brenda let them go with a heavy heart, but her brain said, “good riddance.” Their replacements would uphold the company values of cooperation and service to others.
It took years for Brenda to implement these changes and for employees to get used to them, but it was worth it. Brenda had plugged the holes of the sinking ship, towed it out of the maelstrom, and steered it out of the Straits of Conflicting Interests.
Takeaways for Transmuting Lessons → Action
In a story of this size, there is no single moral, but a collection:
Tear yourself away from the minutiae so you can see the big picture. We spend our days playing whack-a-mole with our problems, but it pays to carve out some time to introspect and get an outsider’s perspective.
Mistakes of omission can be just as impactful as mistakes of commission. Brenda missed (or chose to ignore) the pseudo-productivitis and hired substandard employees instead, both to the detriment of her company.
Cooperation has its limits. Leadership books trumpet the value of cooperation, collaboration and teamwork. However, only practicing these values is like eating only a single type of green leafy vegetable - your organization will soon be malnourished. Adding in some tough love and forcing an alignment of interests will round out the organizational diet and make it stronger and healthier.
Beginnings are important. It’s much harder to fix a foundation after you’ve built a structure on top. Likewise, it’s much easier to implement tough-love policies when you take a leadership position over a new team, join/create a new organization, or write a new policy/law/regulation from scratch. People can tolerate strict beginnings followed by loosening more easily than losing freedoms they’ve become accustomed to.
Beware of Fata(l) Morganas
There is one type of mirage, called the fata morgana, seen just above the horizons of both deserts and oceans. The shimmery, indistinct fata morgana can trick people into believing there is water in the desert, or uncharted land in the ocean.
As a leader, your eyes are often fixed on the horizon. This makes you susceptible to the false allure of the fata morgana. If you enjoyed this article and believe it will help others navigate the treacherous waters in the Straits of Conflicting Interests, please share with them!
Brenda’s business operates in a niche with very high gross margins. That’s the only way she could afford to take great care of customers and employees and build a strong net position. These luxuries are unaffordable to companies that make razor-thin profits by selling undifferentiated products/services in competitive environments (e.g. airlines, commodities).
In the United States, companies of a certain size must contribute money, or match employee contributions, to a retirement plan (e.g. 401(k) or 403(b) plans). The mandatory contribution is very small (single-digit percentages), but companies can elect to contribute more money as part of a profit-sharing plan.