Last Updated 14 May 2020

The Use of Automation In Business Organizations and Its Effect on Employees

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Automation is a term that was first used by Del S. Harder to describe the Ford Motor Company’s 1947 production process, describing it as ‘the automatic handling of parts between progressive production processes’ (Grabbe, 1957, p. 20). Automation changed the way factories worked, many workers had found themselves to have been replaced by various machinery. This shift towards an automated production line was a result of Taylorism, a management theory developed by F.W. Taylor (1914) which aims to improve a workforces efficiency by analysing and then optimizing the production line. In the past however, as mentioned by Dirk De Wit (1994, p. 79), automation was something that was only ‘limited to plants and material handling’.

This has all changed in recent years. Due to recent technological advancements, machines have become more complex, able to do more and are being used in more than just factories. Elon Musk, a multi-billionaire owner of SpaceX and Tesla believes that “Robots will be able to do everything better than us” (Clifford, 2017). There has been much discussion recently into what could or will happen should machines replace the human workforce. There are many high-profile people, Elon Musk included, supporting the idea of a Universal Basic Income. A ‘system in which everyone receives a standard amount of money just for being alive’ (Weller, 2017). Automation brings many benefits to a business and its production process.

How is Automation Affecting Employees?

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However, there are challenges that managers and organizations are facing. It can be argued that the use of automation has a detrimental effect on employee motivation, thus decreasing performance. This can be shown by looking at various behavioural theories and their effect on intrinsically and extrinsically motivated individuals. According to Maslow’s Hierarchy of Needs (1943) a person requires their basic needs to be fulfilled before they can achieve their higher-level motivations.

It can be suggested that automation influences an individual’s job security, something the second level of Maslow’s Hierarchy, Safety. As shown in Figure 1, a survey performed by Pew Research Center found that over 70% of U.S. adults were worried about a ‘Future where robots and computers can do many human jobs’ (Smith & Anderson, 2017, p. 1). The lack of job security means that, according to Maslow, one of the basic needs isn’t being met resulting in a demotivated workforce as they would feel as if their jobs are being threatened by robotics. Henceforth they wouldn’t want to seek social or personal fulfilment in the workplace.

Looking at the next level on Maslow’s Hierarchy we find peoples social needs (Maslow, 1943). As automation becomes more prevalent in the workplace, it can be assumed that they are replacing the human workforce and less people for the current employees to work with. Applying Maslow’s Hierarchy in this case could suggest that the remaining workforce would be demotivated as they aren’t having their social needs met in the workplace, halting progress to the upper levels of the hierarchy such as esteem and self-actualisation.

Even though Maslow’s theory offers an insight into how automation could influence the individual within a workplace, it is quite a narrow vision and there are some flaws when applying it to automation. For example, Robert V. Presthus (1958) suggests that there are different orientations to work.

Someone who identifies with the organization (known as an Upward mobile) may welcome the change that automation can bring as opposed to an ambivalent, someone who is critical of what their organization does (Presthus, 1958). It would be safe to assume that an ambivalent would be more demotivated and at a higher risk of leaving the job than a person with an upward mobile orientation. It also stands to show, that someone who does not care for social fulfilment at their workplace could benefit from robotic co-workers, since the individual wouldn’t be affected by the lack of human co-workers, but productivity improved through a more efficient piece of machinery.

Amazon.com, one of the largest e-retailers in the world which is listed as No.83 on the Forbes Global 2000 list (Forbes, 2017), is a company that has been making large advancements in the automation field, more specifically in their warehouses. Their management has faced challenges that have been solved by automation, but it can also be claimed that in the long term, greater challenges will appear.
Despite being a large multibillion dollar company (Forbes, 2017), Amazon have often been criticised over their working conditions (Kantor & Streitfeld, 2015), specifically in the warehouses where conditions were described as ‘demoralizing and dehumanizing’.

Employees were not satisfied with the long hours and the ways they suffered to provide a ‘good customer experience’ (McClelland, 2012). To rectify this problem, Amazon have been making a push to automate their warehouses more and more (Wingfield, 2017). Whereas this could be a cause for concern when it comes to the employee’s job safety, Amazon have decided to retrain employees to be able to supervise the new machinery, with Dave Clark, a top Amazon executive saying that new roles were found for the affected workers (Wingfield, 2017).

It can be argued that Amazon’s use of automation is effective for both the employee, and management. By retraining workers, rather than firing them, the workers have not lost any ability to achieve social fulfilment from their jobs. At the same time, the workload for the employees has been reduced and shifted onto the new machinery.

Looking at Equity Theory, a theory developed by J.S. Adams which puts forward the notion that people can be motivated or demotivated based on what they feel is fair (Adams, 1965), one can assume that the Amazon workers will feel more motivated. This is because they would be getting paid the same wage but they will have a reduced workload. This combination of a more efficient warehouse workflow and more motivated employees could lead to more capital being earned for the business.

Although Amazon has seemingly implemented automation in an effective way, there are still doubts. Especially as it is still being reported that employee conditions are ‘exhausting’ (Agerholm, 2017) despite being more productive. It could be suggested that Amazon are merely purely concerned with profit and that in the long term they desire to replace most of the workforce with automated counterparts. The fact that robotics has somewhat improved morale is an added benefit, but not Amazons primary goal.

The workers continued lack of motivation can be explained using Locke and Latham’s goal setting theory, which puts forward that an individual is motivated by specific, measurable and attainable goals (Locke & Latham, 2002). Because the goals Amazon set are unrealistic and seemingly unattainable (Agerholm, 2017; Kantor & Streitfeld, 2015) despite the improved conditions they will remain demotivated until more realistic goals are put in place.

The term digital taylorism has been used by The Economist to describe the approach that Amazon is taking, stating that technology is being used to apply Taylors theory of scientific management (1914) to employees in the service industry as well as managers themselves rather than just the production line (“Digital Taylorism,” 2015).

Although Taylorism and digital taylorism can be viewed as unpopular to workers due to the dehumanising aspects, it proves to be an efficient way of optimizing a companies’ workflow as we can see by looking at the improved efficiency in Amazon’s warehouses, and the fact that they have been able to expand their warehouse operations (Bury, 2017).
How Should Automation Be Implemented?

I would suggest that to combat the challenges automation brings would be to use robotics to enhance the worker, rather than simply aiming to make more profit. Companies should be asking their workers, perhaps through meetings, how their workflow could be improved. I believe that if you start with the employee not only will a process be optimized, but motivation will be improved. This will be because the workers see that management cares and the fact that the robotics will be designed around the employee.

One challenge that is offered is that despite the benefits, is that employees should be entitled to some of the profit, be it through a bonus, wage hike or other reward. Using a Fujitsu strike (“Manchester Fujitsu workers to strike for job security, pay and pensions,” 2016) as an example, even though the company was posting healthy profits, workers were being fired and wages stayed the same causing industry action.

This strike action can be explained by looking back to Adam’s equity theory (Adams, 1965), workers put in the effort and were successful, but were not rewarded and some even fired. Similarly, if automation were to help a company’s profits but were to replace workers, then the remaining workers would feel demotivated, leading to possible backlash and a negative impact on a company’s productivity. This thought is echoed in a newsletter from Vocalabs, a company which provides customer feedback services, in which Leppik writes that automation should be implemented not for the sole purpose to save money, but to improve a service (Leppik, 2004).

In conclusion, automation is seen as a threat to workers and it can be shown that it is having an effect on their motivation. It is unknown if automation will completely take over the workplace completely and a universal basic income come into effect. But in the meantime, when companies and managers are seeking to install new robotic systems they should try to cater towards the employee, since the choice to implement automation can influence an employee’s social life at work. It should be noted that large tech companies are working towards making robots more advanced (Mercer, 2017).

It can be assumed that as more human-like machine could possibly one day end up being able to socialise with workers, providing other employees with a social outlet. On top of this, if a system is put in place that is significantly reducing the number of employees, then they may feel as if their job security is being threatened and under Maslow’s theory (Maslow, 1943) they can be demotivated. Since all employees can’t be replaced by robotics at this moment in time, managers and organizations should try to keep the current employees motivated by rewarding them with some of the profit. As for keeping an employee’s social needs fulfilled there are few suggestions.

Bibliography

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