The Case of the Omniscient Organization

Dominion-Swann management acquires technology to support employees—or control them!

HBR case study. This is a satire based on a composite. It was published in 1990 and purported to be a report from 1995.

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Gary T. Marx

Published in Harvard Business Review, March-April 1990.

Gary T. Marx is professor of sociology at Massachusetts Institute of Technology. He is author of Undercover: Police Surveillance in America (University of California Press, 1988)

The following is an excerpt from Dominion-Swann Industries' 1995 Employee Handbook. DS is a $1 billion diversified company, primarily in the manufacture of electrical components for automobiles. This section of the handbook was prepared by the corporate director of personnel, in consultation with the human resource management firm SciexPlan Inc.

 Dominion-Swann's new workplace: Hope for industry through technology

We are a technology-based company. We respect our employees, whose knowledge is the core of the technological enterprise. We care about the DS community We value honesty informed consent, and unfettered scientific inquiry. Our employees understand company strategy They are free to suggest ways to improve our performance. We offer handsome rewards for high productivity and vigorous participation in the life of our company. Committed to science, we believe in careful experimentation and in learning from experience.

Since 1990, we have instituted changes in our work environment. The reasons for change were clear enough from the start. In 1990, DS faced an uncertain future. Our productivity and quality were not keeping pace with overseas competition. Employee turnover was up, especially in the most critical part of our business- automotive chips, switches, and modules. Health costs and work accidents were on the rise. Our employees were demoralized. There were unprecedented numbers of thefts from plants and offices and leaks to competitors about current research. There was also a sharp rise in drug use. Security personnel reported unseemly behavior by company employees not only in our parking lots and athletic fields but also in restaurants and bars near our major plants.

In the fall of 1990, the company turned to SciexPlan Inc., a specialist in employee-relations management in worldwide companies, to help develop a program for the radical restructuring of the work environment. We had much to learn from the corporate cultures of overseas competitors and were determined to benefit from the latest advances in work- support technology. The alternative was continued decline and, ultimately, the loss of jobs.

Frankly, there was instability while the program was being developed and implemented. Some valued employees quit and others took early retirement. But widespread publicity about our efforts drew to the program people who sincerely sought a well-ordered, positive environment. DS now boasts a clerical, professional, and factory staff which understands how the interests of a successful company correspond with the interests of individual employees. To paraphrase psychologist William lames, "When the community dies, the individual withers." Such sentiments, we believe, are as embedded in Western traditions as in Eastern; they are the foundation of world community. They are also a fact of the new global marketplace.

 The fundamentals

Since 1990, productivity per worker is up 14%. Sales are up 23%, ant the work force is down 19%. Employees' real income is up 18%, due in large part to our bonus and profit-sharing plans. Many of these efficiencies can be attributed to reform of our factories' production technologies. But we can be proud to have been ahead of our time in the way we build our corporate spirit and use social technologies.

At DS four principles underlie work-support restructuring:

  1. Make the company a home to employees. Break down artificial and alienating barriers between work and home. Dissolve, through company initiative, feelings of isolation. Great companies are made by great people; all employee behavior and self-development counts.
  2. Hire people who will make a continuing contribution. Bring in people who are likely to stay healthy and successful, people who will be on the job without frequent absences. Candor about prospective employees' pasts may be the key to the company's future.
  3. Technical, hardware-based solutions are preferable to supervision and persuasion. Machines are cheaper, more reliable, and fairer than managers. Employees want to do the right thing; the company wants nothing but this and will give employees all the needed technical assistance. Employees accept performance evaluation from an impartial system more readily than from a superior and appreciate technical solutions that channel behavior in a constructive direction.
  4. Create accountability through visibility. Loyal employees enjoy the loyalty of others. They welcome audits, reasonable monitoring, and documentary proof of their activities, whether of location, business conversations, or weekly output. Once identified, good behavior can be rewarded, inappropriate behavior can be improved.
These principles have yielded an evolving program that continues to benefit from the participation and suggestions of our employees. The following summary is simply an introduction. The personnel office will be pleased to discuss any aspect of community performance or breaches of company policy in detail with employees. (You may call for an appointment during normal business hours at X-2089.}

Entry-level screening

As a matter of course and for mutual benefit, potential employees are screened and tested. We want to avoid hiring people whose predictive profile-medications, smoking, obesity, debt, high-risk sports, family crises-suggests that there will be serious losses to our community's productivity in the future.

Job applicants volunteer to undergo extensive medical and psychological examinations and to provide the company with detailed personal information and records, including background information about the health, lifestyle, and employment of parents, spouses, siblings, and close friends. Company associates seek permission to make discreet searches of various databases, including education, credit, bankruptcy and mortgage default, auto accident, driver's license suspension, insurance, health, worker's compensation, military, rental, arrest, and criminal activity.

The company opposes racial and sexual discrimination. DS will not check databases containing the names of union organizers or those active in controversial political causes (whether on the right or the left). Should the company's inquiry unwittingly turn up such information, it is ignored. We also use a resume verification service.

Since our community is made up of people, not machines, we have found it useful to compare physiological, psychological, social, and demographic factors against the profiles of our best employees. Much of this analysis has been standardized. It is run by SciexPlan's expert system, INDUCT.

Community health

We want employees who are willing to spend their lives with the company, and we care about their long- term health. The company administers monthly pulmonary tests in behalf of the zero-tolerance smoking policy. Zero tolerance means lower health insurance premiums and improved quality of life for all employees.

In cooperation with Standar-Hardwick, one of the United States’ most advanced makers of medical equipment and a valued customer, we've developed an automated health monitor. These new machines, used in a private stall and activated by employee thumbprint, permit biweekly urine analysis and a variety of other tests (blood pressure, pulse, temperature, weight} without the bother of having to go to a health facility. This program has received international attention: at times, it has been hailed; at times, severely criticized. People at DS often express surprise at the fuss. Regular monitoring of urine means early warning against diabetes and other potentially catastrophic diseases-and also reveals pregnancy. It also means that we can keep a drug- free, safe environment without subjecting people to the indignities of random testing or the presence of an observer.

The quality environment

Drawing on SciexPlan's research, our company believes that the physical environment is also important to wellness and productivity. Fragrant aromas such as evergreen may reduce stress; the smell of lemon and jasmine can have a rejuvenating effect. These scents are introduced to all work spaces through the air- conditioning and heating systems. Scents are changed seasonally.

Music is not only enjoyable to listen to but can also affect productivity We continually experiment with the impact of different styles of music on an office's or plant's aggregate output. Since psychologists have taught us that the most serious threat to safety and productivity is stress, we use subliminal messages in music such as "safety pays," "work rapidly but carefully," and ''this company cares." Personal computers deliver visual subliminals such as "my world is calm" or "we're all on the same team."

At the start of each month, employees are advised of message content. Those who don't want a message on their computers may request that none be transmitted-no questions asked. On the whole, employees who participate in the program feel noticeably more positive about their work. Employees may borrow from our library any one of hundreds of subliminal tapes, including those that help the listener improve memory, reduce stress, relax, lose weight, be guilt-free, improve self-confidence, defeat discouragement, and sleep more soundly

On the advice of SciexPlan's dietitians, the company cafeteria and dining room serve only fresh, wholesome food prepared without salt, sugar, or cholesterol-producing substances. Sugar- and caffeine-based, high-energy snacks and beverages are available during breaks, at no cost to employees.

Work monitoring

Monitoring system performance is our business. The same technologies that keep engines running at peak efficiency can keep the companies that make engine components running efficiently too. That is the double excitement of the information revolution.

At DS, we access more than 200 criteria to assess productivity of plant employees and data-entry personnel. These criteria include such things as the quantity of keystroke activity, the number of errors and corrections made, the pressure on the assembly tool, the speed of work, and time away from the job. Reasonable productivity standards have been established. We are proud to say that with a younger work force, these standards keep going up, and the incentive pay of employees who exceed standards is rising proportionately

Our work units are divided into teams. The best motivator to work hard is the high standards of one's peers. Teams, not individuals, earn prizes and bonuses. Winning teams have the satisfaction of knowing they are doing more than their share. Computer screens abound with productivity updates, encouraging employees to note where their teams stand and how productive individuals have been for the hour, week, and month. Computers send congratulatory messages such as "you are working 10% faster than the norm" or messages of concern such as "you are lowering the team average."

Community morale

There is no community without honesty. Any community must take reasonable precautions to protect itself from dishonesty Just as we inspect the briefcases and purses of visitors exiting our R&D division, the company reserves the right to call up and inspect without notice all data files and observe work-in-progress currently displayed on employees' screens. One random search discovered an employee using the company computer to send out a curriculum vitae seeking employment elsewhere. In another, an employee was running a football pool.

Some companies try to prevent private phone calls on company time by invading their employees' privacy At DS, encroachments on employees' privacy are obviated by telecommuni-cations programs that block inappropriate numbers (dial-a-joke, dial-a-prayer) and unwanted incoming calls. In addition, an exact record of all dialing behavior is recorded, as is the number from which calls are received. We want our employees to feel protected against any invalid claims against them.

Video and audio surveillance too protects employees from intruders in hallways, parking lots, lounges, and work areas. Vigilance is invaluable in protecting our community from illegal behavior or actions that violate our safety and high commitment to excellence. All employees, including managers, check in and out of various workstations—including the parking lot, main entrance, elevator, floors, office, and even the bathroom—by means of an electronic entry card. In one case, this surveillance probably saved the life of an employee who had a heart attack in the parking lot: when he failed to check into the next workstation after five minutes, security personnel were sent to investigate.

Beyond isolation

Our program takes advantage of the most advanced telecommunications equipment to bind employees to one another and to the company DS vehicles are equipped with on-board computers using satellite transponders. This offers a tracking service and additional two-way communication. It helps our customers keep inventories down and helps prevent hijacking, car theft, and improper use of the vehicles. Drivers save time since engines are checked electronically They also drive more safely, and vehicles are better maintained since speed, gear shifts, and idling time are measured.

In addition to locator and paging devices, all managers are given fax machines and personal computers for their homes. These are connected at all times. Cellular telephones are provided to selected employees who commute for more than half an hour or for use while traveling.

Instant communication is vital in today's international economy. The global market does not function only from 9 to 5. Modem technology can greatly increase productivity by ensuring instant access and communication. Periodic disruptions to vacations or sleep are a small price to pay for the tremendous gains to be won in worldwide competition. DS employees share in these gains.

Great companies have always unleashed the power of new technology for the social welfare, even in the face of criticism. During the first industrial revolution, such beloved novelists as Charles Dickens sincerely opposed the strictures of mass production. In time, however, most of the employees who benefited from the wealth created by new factories and machines came to take progress for granted and preferred the modem factory to traditional craft methods. Today we are living through a Second Industrial Revolution, driven by the computer.

Advanced work-support technology is democratic, effective, and anti-hierarchical. DS's balance sheet and the long waiting list of prospective employees indicate how the new program has helped everybody win. To recall the phrase of journalist Lincoln Steffens, "We have been over into the future, and it works." We are a company of the twenty-first century.

HBR's cases are derived from the experiences of real companies and real people. As written, they are hypothetical, and the names used are fictitious.

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