People have been trying to use compensation plans for years to alter behavior believing that just the right comp system will manage people. Compensation is a type of algorithm. In the mid to late 1990s, people were convinced that stock options were magic. While they could certainly be an effective tool for some companies, in some instances, they could never replace managing people.
Having been a comp consultant for nearly a quarter of a century (now there’s some scary math!) there is one thing that I am sure of: managing people takes more nuance than some simple formulas can yield.
In a recent Forbes article, Enrique Dans poses an interesting question, “Is Using Algorithms In Human Resources A No-Brainer–Or Something More Sinister?” He discusses the impact of using algorithms in Human Resources. He references Laszlo Bock, who co-founded a company called Humu to create algorithms aimed at improving employee satisfaction. “Bock and his colleagues say their nudges are not about getting people to do things they don’t want to do, but instead are simply recommendations to implement small changes that for whatever reason haven’t previously been suggested.”
Now, this article struck me less as sinister and more as “Here we go again …” Like compensation algorithms, I’m not sure there’s a formula that will “improve satisfaction” or “create a better work environment” for all; Perhaps there are quantitative measures that can guide managers conversations with their employees? Read More Here