Does Telework Thwart Promotion?

Teleworkers are higher performing and log more minutes than their in-the-office counterparts, according to a recent study. But such enhanced perks come with a cost: a lower chance of being promoted.

Researchers from Stanford University, in partnership with a Chinese travel agency, found that call center workers who volunteered to work from home experienced a 13 percent performance increase — of which roughly 9 percent resulted from working more minutes per shift, and 4 percent from more calls per minute — compared to call center agents working in the office during the same nine-month period.

The downside: conditional on performance, the call center workers for CTrip — a 16,000-employee, NASDAQ-listed travel agency — who volunteered to work from home had about a 50 percent less chance of being promoted than those fielding calls from the office, according to the study.

“When you’re working from home, you don’t have enough time to interact with your managers, who observe how well you do,” said Zhichun Jenny Ying, a graduating doctoral student in economics at Stanford and one of the study’s co-authors.

The study comes amid intense scrutiny over Yahoo Inc.’s recent decision to bring all teleworkers back to the office. In February, the struggling technology company’s HR head, Jackie Reses, penned an internal memo to employees saying “speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.”

Yahoo’s at-home workers are expected to return to the office in June.

Proponents of telework criticized the decision by Yahoo’s CEO Marissa Mayer, saying the former Google executive was going against an increasingly popular work-from-home trend, as well as data showing the practice boosts productivity and employee satisfaction.

Others, including outspoken business mogul Donald Trump, lauded the decision, saying Yahoo’s sagging business results prompted a need for a culture shift.

More Americans are working from home at least one day per week than ever before, according to a Census Bureau report released last week. In 2010, roughly 13.4 million people, or 9.4 percent of U.S. workers, worked at least one day at home a week, the Census report said. That’s about a 2.4 percentage point increase from 1997, when 9.2 million people, or 7 percent of U.S. workers, worked from home at least one day a week.

HR professionals and academics expressed caution when linking promotion to physically being in the office.

“It’s about getting high-quality work done, not where you do it,” said Janice Chavers, a spokeswoman for Indianapolis-based pharmaceutical company Eli Lilly & Co. HR executives with Eli Lilly were not made available for comment.

As a global company, it’s quite common for Eli Lilly’s employees to be dispersed all over the world, Chavers said. Therefore, a lot of meetings and interactions between employees and managers happen over the phone or in virtual environments, not together in an office.

On rate of promotion being tied to virtual work, however, Chavers said: “A lot depends on the particular job but, yes, some face time is important.”

Dan Pontefract, senior director of learning and collaboration at Canadian telecommunications company Telus, said the firm aims to have 70 percent of its workforce working at home or through mobile channels by 2015. He said the company’s employee engagement is at about 80 percent, and that “there is no discernible difference” between the engagement levels of employees who work from an office and those who work at home.

When asked in an email if he thinks rate of promotion is tied to either work form at Telus, Pontefract said: “We’ve been in our work styles program for two years now and don’t have supporting evidence to suggest one way or the other that it makes a difference.”

In the Stanford study, CTrip’s senior management was interested in allowing its Shanghai call center employees to work from home because they “perceived potential benefits from reducing office rental costs” amid a booming Chinese real estate market.

The managers also aimed to reduce high attrition rates at the company — due in large part, Ying said, to the young demographic makeup of the typical call center.

CTrip’s management ended up asking about 1,000 of its employees in the company’s airfare and hotel departments to work from home four days a week, with the fifth and final day in the office, the study said.

About half volunteered. Of those, 249 were qualified based on having at least six months tenure and the proper technology and space to work from home.

The home and office workers used the same equipment and had the same amount of work. They were also compensated under the same pay system. The only difference was location.

In addition to the increase in performance, the study found that attrition fell sharply, dropping by about 50 percent among the at-home workers. After the experiment, the number of CTrip call center agents working from home has nearly doubled to 22 percent.

Call center agents who worked from home in the study, however, were less likely to get promoted because “supervisors did not notice their performance as much,” the study said. This led some employees to return to the office to avoid what they termed in the study as a “discrimination penalty.”

Indeed, there may be some manager bias toward workers who are visible in the office when it comes to promotion, said Amy Edmondson, a professor of leadership and management at Harvard Business School. Performance, paired with in-person interaction, likely plays some role in the manager decision-making process.

However, Edmondson also said much of what determines promotion rests on the nature of the job. “We need to ask if we’re really comparing apples and oranges,” she said.

Ying said the findings were likely more a function of the nature of call-center work and the promotion process at CTrip, making it difficult to draw across-the-board conclusions.

“People are trying to find a one solution fits all [when it comes to telework],” she said. “I don’t think there is such a thing.”

Frank Kalman is an associate editor of Talent Management magazine. He can be reached at