Rita Fontinha: Should employers cut pay for staff who continue to work from home?

In March 2020, the Covid-19 (Coronavirus) pandemic led to lockdown restrictions and businesses quickly adopted a remote-working policy for all jobs that did not require a face-to-face interaction.

While remote work has been an ongoing practice over the past two decades, it was often a voluntary decision where some employees chose to work for some part of their working time outside the office.

With the pandemic, working from home became mandatory and, in most cases, it was not part-time: employees had to work remotely for several weeks and months without any face-to-face contact with their colleagues.

Before the crisis, flexible working practices, including some extent of remote work, were considered to be a perk. However, during the pandemic, we saw that working from home full-time has been associated with extreme workload pressures, especially when combined with childcare or other caring responsibilities. Full-time remote work also brings concerns about social isolation and lack of career progression, which suggests that full-time remote work can have its downsides too.

Simultaneously, the pandemic also showed us that working from home does not mean taking days off, with evidence suggesting increased productivity while working remotely.

These findings suggest that some extent of remote work is positive, not only for individuals but also for organisations. We now see that a significant number of employees do not want to go back to work as in the pre-Covid era. This is either due to concerns with the virus, related to commuting and more social interaction, or the fear of losing the flexibility gained during the pandemic. Organisations such as BP, Amazon and Microsoft have acknowledged that and are now moving towards practices that include some days in the office and other days working from home.

The question of whether employers should, or even can, implement pay cuts for employees who continue to work from home after the pandemic is still based on the assumption that remote work should be penalised – ignoring not only its challenges but also its benefits. It reflects the mindset of organisations with a culture focused on presenteeism, where it is believed that if employees are in the office, they are being productive, when that may not be the case.

Employers should not implement pay cuts for employees who are are sometimes away from their physical workplaces, but instead should also support them and facilitate their communication with other stakeholders to increase productivity.

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In case there are concerns with lack of control regarding remote workers, the answer is to appropriately measure individual and team-level performance and reward it accordingly despite the location where work is being performed.

Dr Rita Fontinha is associate professor in strategic human resource management at Henley Business School