The new rules for managing knowledge workers in a post-COVID world

Managers need to follow a three-step process to get the best performance and productivity out of knowledge workers in hybrid working arrangements

The traditional rules for managing knowledge workers were thrown out the window in 2020. With governments around the world implementing lockdowns to reduce the spread of SARS-CoV-2, most organisations were caught off guard as they struggled to adapt to an environment in which remote working became the norm almost overnight.

In March 2020 before COVID restrictions were rolled out, Australian Bureau of Statistics research found 24 per cent of employees were working from home. In February 2021 this number increased to 41 per cent. Looking forward, 47 per cent of employees expect the amount of work from home to remain the same, while 11 per cent expect a decrease in work from home and 8 per cent per cent expect an increase in work from home.

And with ongoing restrictions in place around the world, it looks like a blend of remote and office work, or hybrid working, is here to stay – a shift which many employees appear to be happy with. A global PwC survey of 32,500 participants from 19 countries (including more than 2,000 Australians) found only 9 per cent of those who can work remotely want to go back to a traditional commute and work environment full-time, 19 per cent would be happy to not return to an office at all and work entirely remotely, while the majority (72 per cent) who can work remotely say they prefer a mixture of in-person and remote working.

How knowledge workers were impacted

Research from Roy Morgan also pointed to a significant gap in working trends between white collar “knowledge workers” – those whose job requires them to think for a living – and workers in other sectors. For example, 58 per cent of workers in finance and insurance, 51 per cent in public administration and defence and 47 per cent of those working in communications were working from home in April and May of last year, compared to 16 per cent in manufacturing, 15 per cent in transport and storage, 13 per cent in agriculture and just 12 per cent in retail.

Considering the circumstances, George Shinkle, Associate Professor in the School of Management and Governance at UNSW Business School, says organisations did amazingly well in this disruptive transition. “The absolute requirement to change removed many traditional roadblocks for managers and employees even, as many had to learn new digital technology skills. Most reports indicate that managers of knowledge workers reduced oversight (control) and allowed more discretion,” he says.

“However, that is not to say that all managers stopped counting key stokes or active time on workstations, but the social concern for general wellbeing of people shifted thinking away from control toward discretion, trust, and social cohesion for many, but not all, organisations.”

Read more: Six important ways COVID-19 has changed the workplace for good

New rules for managing knowledge workers

Not all managers are happy with the prospect of managing employees in a hybrid working environment. A/Prof. Shinkle observes there is some anecdotal evidence that the COVID environment propelled many traditional micro-managers out of the micromanagement tendency. “The online environment made this slightly more difficult and the higher concern for employee wellbeing shifted managers’ focus,” he says.

Recent research by A/Prof. Shinkle and his colleagues indicates that the amount of rule-based control that maximises performance depends on the degree to which the knowledge workers accept (or are committed to) the organisation’s goals. “Our findings on this were quite surprising,” he says. “Traditional guidance is to have not too many rules or not too few rules – have a moderate level. In Goldilocks’ terms, just the right level. We found that when knowledge workers accepted the organisation’s goals they performed better when the level of formalised rules were low or high and the lowest performance was at a moderate level of rule-based control.”

The reason for this is that a low level of rule-based control allows for discretion, and when the knowledge worker accepts the organisation’s goals then they place creative effort on activity that helps the organisation. “At a medium level, rules constrain autonomy and are demotivating. Surprisingly, on the other side, when rule-based control is high, knowledge workers tend to view the rules as enabling them to achieve the desired outcomes of the goals,” says A/Prof. Shinkle, who explains that this is because organisations with high levels of rule-based controls typically develop the rules based on relevant past experience that is accepted by knowledge workers (such as stage-gate program management procedures).

Striking the best balance

Interestingly, when knowledge workers exhibited low goal acceptance, A/Prof. Shinkle says a moderate level of rule-based control worked best. The research indicates the importance of understanding the degree to which knowledge workers accept the organisation’s goals before designing rule-based control systems.

Read more: How COVID-19 has reshaped manager attitudes about working from home

“Further, accepted goals drive intrinsic motivation which is generally more performance-enhancing than extrinsic control. Managers seem to understand this as we observed managers explaining the reason for and importance level of each goal as a means to build higher acceptance of specific goals,” says A/Prof. Shinkle.

Importantly, this suggests organisations with high levels of knowledge workers should consider low levels of rule-based controls and work in order to create higher levels of goal acceptance and commitment. “One way to build goal commitment with knowledge workers is to clarify the organisation’s fundamental purpose especially regarding connections to and caring for others – social benefits of a larger purpose. Relevant to our dynamic business environment, such an approach will enhance agility and resilience to respond to ongoing changes,” says A/Prof. Shinkle.

Addressing engagement and productivity

One of the most common concerns managers have about employees working out of the office is the potential for reduced engagement and productivity. However, as A/Prof. Shinkle noted, concerns most managers held regarding employee productivity and remote working were debunked by the pandemic.

“For example, people can go from meeting to meeting in the blink of an eye if the meetings are online,” says A/Prof. Shinkle. “One manager told me that his team members were working during the time they would normally be commuting to the office, so productivity actually increased significantly. Another manager at a big bank indicated that they observed an initial drop in productivity at the beginning of the working from home transition – but quickly returned to normal levels, and in some cases are now exceeding past expectations.”

There are also important generational and hierarchical factors at play here. A/Prof. Shinkle recounts how an executive told him that the online environment was very familiar to younger employees and less so to older employees. “This is important as it created an interesting dynamic. Traditionally, high-level executives would have physical meetings to coordinate various geographic regional centre activity,” he says.

In the online environment, A/Prof. Shinkle says such discussions do not need to be constrained to high-level executives, and now younger, lower-level employees are much more involved and interacting across the organisation’s regions. “This results in higher employee engagement and employee development,” he says.

Read more: Digital nomads: five key insights into the future of knowledge work

Motivating knowledge workers in an online world

With Gartner predicting 51 per cent of all global knowledge workers will be working remotely by the end of the year, A/Prof. Shinkle said it is important that organisations and managers adapt to this shift and learn how to manage and engage knowledge workers in this new environment. “The research evidence on motivation is quite clear that knowledge workers are more motivated and thus productive when they have perceptions of autonomy, competence, and relatedness – also referred to as autonomy, mastery, and purpose,” he says.

When times are difficult, A/Prof. Shinkle observed managers tend to over-control with rigid processes and this demotivates employees, especially knowledge workers. Yet, a broad array of research evidence indicates it is better to combine some firm boundaries alongside processes that provide flexibility. More specifically, he recommends a three-step process for managers:

1. Put up wide guardrails and allow improvisation to enhance perceptions of autonomy
2. Provide positive feedback and opportunities for employees to build competence in new areas
3. Explain and discuss the organisation’s goals and fundamental purpose especially regarding connections to and caring for others.

An important part of the process is making performance measures and targets clear. While the online environment removes many social cues and interactions which promote social cohesion and understanding of the organisation’s desires, A/Prof. Shinkle says prudent managers in distributed ways of working invest more time in establishing and communicating performance targets.

Another important consideration for managers in motivating knowledge workers is keeping them connected and aligned with co-workers, clients and suppliers, says A/Prof. Shinkle. “Many organisations recognised the potential of using the online environment to establish regular check-ins to keep teams engaged and aligned. Once organisations got used to this new way of working, they have now become ‘relatively proficient’ in the new medium,” he says.

Dr George Shinkle is an Associate Professor in the School of Management and Governance, UNSW Business School. His research investigates strategic goal setting, strategic agility, strategy development and strategy implementation – particularly in turbulent environments. For more information please email Associate Professor Shinkle.