Algorithmic management: what it is, what it does and what it means for the future of work

Algorithmic management has been seen as a positive technological and digital factor in the organization of economic activity, but it also raises a range of challenges. While some may see it useful for increasing organizational ability to control and monitor complex economic and work processes, the increasing capacity to collect, store and process digital information also raises questions about privacy and personal space in the workplace.

News | 10 October 2022
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(News) – Increasing digitalization further accelerated by the COVID-19 pandemic has contributed to significant shifts in world of work. One aspect of this shift has been a marked increase in digital monitoring and control of work processes known as algorithmic management, especially in the area of increased pandemic driven teleworking.

In simple terms, algorithmic management, or AM, is defined as the use of computer programmed procedures for the coordination of labour input in an enterprise or organization.

It’s essentially comprised of two components. The first is the algorithm, or a set of predetermined rules to be followed in sequence to analyze work processes and involves a massive collection of data. The second component is management of work processes, the workforce, monitoring, surveillance and more.

During the pandemic, the use of new networking software tools incorporating some form of AM was critical to ensuring that the switch to telework did not involve a disruption in economic activity.  In cases of work processes with actual physical presence requiring social distancing, AM provided a means for evaluating health conditions and lead to more efficient organization of these processes.

Nevertheless, the potential benefits of AM have been accompanied by growing concerns about the use or overuse of these systems, including privacy and security risks, more invasive and impersonal monitoring procedures, and additional biases that can be associated with the technology.

These are among the messages highlighted in a new podcast titled “Algorithmic management: What it is, what it does, and what it means for the future of work”, produced as part of the ILO Employment podcast series Global challenges – Global solutions: The future of work.

“There's absolutely no doubt that the adoption of these algorithmic management techniques or practices or even further digitalization that we see through various digital tools and technologies that are being introduced in many traditional workplaces, can help in improving efficiency and profitability because it provides some sort of an assistance, direction and prediction to management, workers and employees”, said Uma Rani, Senior Economist at ILO’s Research Department and guest interviewee in the podcast.  “However, I think one needs to be very careful with regard to how these practices of digitization at work can also generate some of the new challenges for worker rights and job quality”.

The use of AM can also be invasive in some cases as has been observed, especially in the logistic sectors with increased surveillance, through AM tools, such as the variable devices and other technologies that are there have adverse effects on workers' well-being and even potentially their ability to work.

“I think it's very important for us to understand the role that data plays for predicting such algorithms as the data that is fed into it is quite biased”, Rani said.  “I think we need to be very careful about how these practices are used, what indicators are used into the programming of the algorithm, what is the kind of data that is being used because all this has implications on the workers”.  

Enrique Fernandez Macias, a Researcher at the European Commission’s Joint Research Centre, and also guest interviewee of the podcast observed, “there has been an increasing concern about some of the possible excessive uses of some of these tools of algorithmic management in the context of teleworking in the pandemic for the monitoring of workers' activity and even workers' private lives in some cases.”

AM has been used and tested thoroughly in traditional and digital workplaces in developed countries. In developing and emerging economies, AM is in a nascent phase, as many sectors and enterprises within these sectors are only now moving towards digitalization, although AM is already quite widespread on digital labour platforms that have grown at a rapid pace. However, more research will be needed to determine the extent to which AM practices have penetrated in traditional or regular workplaces in both developed and developing and emerging economies and its potential impact on the future of work.

To learn more about algorithmic management and its use in the world of work, listen to our podcast.