Since the start of the pandemic, organisations have been iterating and evolving their working models, balancing the needs of the business, customers and employees.
Within Financial Services, research by the FSCB (Financial Services Culture Board) indicates that organisations are taking different approaches to the coordination of in-office work, each creating different challenges in terms of implementation, perceptions of fairness and employee compliance (see Future of Workplaces report and roundtable event).
Some of the main approaches, with varying levels of employee choice, include:
- Mandating full-time office working
- Mandating a number of days in the office per week
- Suggested days in the office
- Free choice – employees/teams decide when to come into the office
But how do companies know what is best? High-profile cases of employee backlash or low compliance with office policies have led to some organisations deciding to reverse their plans. Applying an evidence-based and behavioural lens to the challenge of hybrid work can help organisations evolve their approaches to improve outcomes for all.
Mandating office working vs no hybrid working policy – risks at both ends of the spectrum
Mandating full-time office working may not be in a company’s interest. In a recent randomised trial testing the impact of hybrid working versus mandated full-time office working, those that worked from home saw a 35% reduction in attrition rates, were more productive and reported higher work satisfaction. In other research, 59% of knowledge workers said they would not work for a company that required them to work in an office full time.
These boosts in productivity and work-life satisfaction can be partly explained by self-determination theory, which outlines the need for competence, social connection, and autonomy to support motivation and wellbeing. Greater autonomy serves as an intrinsic motivator to perform better, whereas policies that mandate when and where employees work are expected to reduce motivation and increase perceptions of employer distrust.
On the other hand, setting no expectations around in-office working yields low attendance rates: just 0.9 days per week on average. Complete choice over where employees work can create behavioural barriers such as choice overload or inertia, where they don’t come into the office much at all. Microsoft found this can threaten collaboration, as firm-wide remote work became more siloed.
Others have discussed risks to diversity and inclusion, as those who come into the office are not random (eg parents may be less likely to come in), and more ‘visible’ employees may face greater career rewards. The FSCB has found these themes present in their work with member firms. However, a recent trial provides some reassurance, finding no impact of working from home on performance ratings or promotions, in comparison to those full-time in the office, over a six-month evaluation period.
So how should organisations go about implementing work from home/office policies?
1. Provide a clear purpose for your policy
Whatever your policy, create a compelling and purpose-driven narrative as to why employees should come into the office. A strong sense of purpose, where employee efforts are connected with the ‘big picture’, helps drive engagement, motivation and even financial performance.
2. Acknowledge the changing role of line managers
Not only are line managers needed to implement hybrid working policies, but they should also play a role in developing them with their teams, as recent data shows that policies decided at the team level result in similar or even greater attendance than mandatory blanket policies.
Already ‘squeezed’ prior to the pandemic, managers will need new skills to facilitate evolving work models and be supported in transitioning to managing teams under these. Although one size does not fit all, effective hybrid working is facilitated by strong, intentional and planned communication.
Equally important is the need to provide time for social connection as loneliness can lead to poor well-being and reduced productivity. Line managers need to be skilled in talking about well-being to support employees in balancing their work requirements against personal circumstances. Creating psychological safety within teams is key – enabling employees to safely speak up to share relevant personal information, so work can be planned and coordinated.
3. Use nudges over mandates
By using ‘nudges’ rather than mandatory policies, organisations can preserve employee flexibility and choice, while addressing common barriers to coming into the office. Some examples include:
- Using soft defaults and rules of thumb to simplify decision-making and set expectations around the days or frequency of office working. This may also include rules of thumb around what tasks are expected to be done in the office versus at home.
- Using participatory decision-making processes to enable teams to consider and agree on their own norms, rather than use of blanket policies, which may be particularly effective in encouraging in-office work. This links to research showing how participatory rather than hierarchical structures increase productivity and feelings of empowerment (such as job satisfaction and sense of control).
- Using social norms and manager role modelling to help embed new behaviours in line with organisational policy as employee behaviour is highly sensitive to manager behaviour.
- Consider small incentives which can be effective in initiating a new behaviour and encouraging the formation of new habits. Some organisations are attempting to leverage non-monetary incentives (such as food and beverages, social events and improved office environments), which some evidence suggests can support worker reciprocity and productivity. However, larger incentives risk crowding out individuals’ intrinsic motivation to come into the office and may unfairly disadvantage groups who are less able to come into the office.
4. Apply principles of organisational justice
Organisational justice refers to employees’ perceptions of social and interpersonal fairness within their workplace, including how and what decisions are made and how individuals are treated. It is linked to positive outcomes, including trust, engagement and reduced turnover intentions.
To improve perceptions of fairness when implementing hybrid working policies aim to:
- Give employees the opportunity to have a say and influence decisions
- Put in place a clear and transparent process for making decisions based on accurate information and apply it consistently
- Ensure objectivity and have an appeals process
- Provide a full explanation of decisions, outlining why and how the decision has been reached
- Be sensitive and genuine in interactions
5. Try, test, learn, and evolve!
Getting hybrid working policies right is an iterative process involving monitoring outcomes of interest, such as office use and employee satisfaction, engagement and retention. The FSCB and BIT are experts in supporting organisations to implement (and evaluate) evidence-based interventions to address organisational challenges, including those related to hybrid working.
Curious to find out more? Get in touch!
If you are interested in exploring these concepts further, or to find out more about applying behavioural insights in your workplace please get in touch.
We look forward to hearing from you.