Hybrid work: On the way to a two-tier organization?

How managers should deal with proximity bias

In the wake of the Corona pandemic, hybrid working is now being touted. At first glance, it makes a lot of sense to divide work sensibly between presence in the office and remote in the home office. But many managers don’t realize that this form of NEW WORK harbors a great danger: in the long run, it promotes a two-tier organization.

Welcome to the new normal! In year two of the global pandemic, the home office has finally established itself in everyday corporate life. And even after the Corona crisis, companies are looking to embrace new work models and combine the best of home office and corporate: Hybrid working is the trend. In the global Accenture study “Future of Work: productive anywhere,” for example, 83 percent of respondents said a hybrid working model would be ideal for them. More and more companies are adopting the hybrid approach here in Germany, too, as long as the job allows it – Deutsche Bank, SAP, Allianz, Henkel, BASF, Daimler, BMW and many more. However, hybrid working also harbors dangers: It creates an imbalance between employees. Managers subconsciously develop so-called proximity bias. What is the reason for this? And what can companies do about it?

Privileged or outsider?

The term “proximity bias” describes a cognitive phenomenon in which managers perceive on-site employees as more productive, more motivated, more reliable and more ambitious than their colleagues in the home office. This unconsciously leads to an unfair preference for those who work in the office – visible in promotion opportunities, task assignments and salary. Proximity bias existed in smaller forms even before the pandemic. Especially in hybrid meetings, a kind of two-tier society existed:

At the on-site conference table, the “privileged” who could perceive social feedback much more clearly in the group and better participate in discussions. On the other side, connected online, the “outsiders” who were more passive than active in the discussions and brainstorming sessions – and did not come across very convincingly due to a distorted sound or shaky image. Even though the number of online meeting tools has multiplied in the last 18 months, and even the visual and audio equipment in the home office has become more professional, the flavor of inequality between the participants often still clings to hybrid meetings.

The term “proximity bias” describes a cognitive phenomenon in which managers perceive on-site employees as more productive, motivated, reliable and ambitious than their colleagues in the home office. This unconsciously leads to an unfair preference for those who work in the office – visible in promotion opportunities, task assignments and salary.

The danger of inequality of opportunity

So now it’s the same with hybrid working. This is dangerous, because an organization’s work model has a much greater impact than a meeting with connected “home office heroes.” When leaders increasingly unconsciously favor people in their physical environment, they drive a wedge into the corporate culture and create opportunity inequality. Take a hybrid model as an example, where employees can decide for themselves how many days they want to work on-site or at home. This sounds very positive at first, but:

Those who live far from the workplace, have children or someone in need of care in the home are likely to choose three days of home office to save commuting time in exchange for more time for family tasks. Others choose to come into the office every day of the week and only occasionally go mobile. They have an advantage because the manager is more aware of them and subconsciously puts them on the mental short list for promotion candidates in the company. Incorrectly established, the hybrid work model can therefore feed inequality in the medium to long term – even if the intention behind it was different.

Abolish offices?

This does not mean that hybrid working models are negative for companies. On the contrary, this approach ensures productivity in the event of unforeseeable crises, enables day-to-day operations to continue – and thus strengthens the resilience of an organization. However, managers should properly plan the implementation of a hybrid work model – and be aware of the danger of proximity bias. Darren Murph, head of remote work at software provider GitLab, suggests eliminating offices altogether to prevent proximity bias in an interview with technology magazine Protocol. This approach is radical and is likely to lead to corporate culture death and brand identity fading over time. The sense of “we” is lost and the flow of information falters as one of the largest information media in companies – the grapevine – disappears.

No: A company as a social construct needs the physical gathering of people. For my work as an interim manager, it is essential to have people around me. Among other things, I help set up sales departments in startups: In such an environment, I have to be able to involve employees in topics by shouting and answer queries directly. Speed is the key here. Zoom or Skype meetings take far too long for this. A working model that is mobile without restrictions can also slow down processes and make them more inefficient.

A company as a social construct needs the physical gathering of people. For my work as an interim manager, it is essential to have people around me.

Empower leadership teams

It makes more sense to adjust the management teams to the new situation. A hybrid organization must be managed differently than an analog-only or digital-only organization. If this is clear to all those in charge, they can create a structure that actually combines the best of two worlds without breaking down into disparate silos, the A team and the B team.

The following five steps could be a first approach to this:

  1. Create awareness of proximity bias in leadership teams
  2. Set up equal development opportunities for all
  3. Strengthen team building
  4. Establish a results-oriented workflow
  5. Establish a set of rules for hybrid meetings

1. Create awareness in the management teams

Naturally, every manager strives to make professional decisions free of bias. With regard to the work context, this is not only desirable, but required by law: Anyone who disregards the General Equal Treatment Act (German Allgemeines Gleichbehandlungsgesetz, AGG), also known as the “anti-discrimination law,” must reckon with corresponding consequences. Proximity bias, however, is not consciously perceived by managers. And that is what makes it so dangerous. That’s why the first step should be to create awareness among leadership teams about proximity bias. Whether through a training program, workshop, or information session, only when this awareness is there are leaders able to recognize when they are unconsciously favoring someone. They can reflect on their behavior and act differently in the next similar situation. In this way, they maintain balance and fairness in the team.

However, employees should also be sensitized to the issue and be aware of it: The “cool job” from the home office can also bring its problems. Those who work remotely 100 percent of the time can be more easily overlooked by superiors and unwillingly passed over. Some employees are already aware of this: According to a survey by CNBC and SurveyMonkey, 52 percent of respondents fear that their colleagues in the company will have better career opportunities in the future than those from the home office.

2. Set up equal development opportunities for all

Employees want to develop further. It is the task of managers to recognize, promote and challenge the different potentials of their employees. With hybrid work models, this is a challenge. Proximity bias also plays into this: it is much easier to promote and challenge those people who are close to me as a manager. In order to also recognize the potential of mobile employees, an intensive exchange with them is necessary. Managers should set up hybrid meetings with a high degree of regularity in which they let everyone work together – and also put together hybrid project teams. In addition, digital one-on-one meetings are important to see how people handle tasks and time constraints from the home office. In this way, managers gain an overall picture of their employees, can map individual potential and then specifically promote each person – regardless of where they work from.

3. Strengthen the team building

Those who only see their colleagues via the screen increasingly develop a social distance in addition to the physical distance. In a hybrid work model, managers should try to bridge this distance by strengthening the sense of togetherness among analog and digital employees. When everyone works as a united group toward a goal, motivation and efficiency in the team are much higher than when everyone acts as a “lone wolf” – and doesn’t even see many of their colleagues. It is helpful for identification with the team and the company if colleagues meet physically on a regular basis. Whether in a casual work context or as an activity outside of work, exchange in direct contact strengthens the social bond of the group.

4. Set up a results-oriented workflow

Managers can circumvent proximity bias by evaluating more in terms of projects and results. It shouldn’t matter who works on a task from where, as long as deadlines are met and goals are achieved. Those who focus on results can quickly identify who the high performers are – and can ignore physical proximity or distance from the team in the process.

5. Set up a set of rules for hybrid meetings

Lastly, it’s important to avoid the two-tier society of “privileged” and “outsiders” in hybrid meetings. When mobile-connected employees see a group at a conference table on their screen, it can feel a bit like “everyone against me” psychologically.  One approach to avoid this effect is to have everyone present also dial into the online meeting platform with their laptops, so that at least on the screen everyone is the same.

Thinking about the new hybrid structure in advance can make your organization more resilient and efficient.

Conclusion: Watch out for trip hazards

Hybrid working brings some advantages in the new normal. However, this work model also changes the form of collaboration and interaction in the company. If implemented incorrectly, it can cause lasting damage to the corporate culture. But if you think about the new structure in advance, you can make your organization more resilient and efficient.

Diplom-Wirtschaftsingenieur Ralf H. KOMOR, ist Executive Interim Manager auf C-Level, zertifizierter Beirat, Most Trusted Adviser für die Beratung von Familienunternehmen und Springer Autor. Er entwickelt neue Geschäftsmodelle und Vertriebsstrategien für Startups, Scaleups und den Mittelstand und begleitet aktiv Veränderungsprozesse in Menschen und Organisationen.

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