Monitoring Your Employees’ Every Emotion

A Cowlar for every employee: Have you heard about the Cowlar? It’s a smart collar that dairy farmers can strap around the necks of cows to monitor their herds. It promises improved milk production, early disease detection, heat detection, and real-time monitoring and alerts. How would you feel about wearing one? I ask because it seems like it’s a question that more and more employers are asking their employees.

“Companies including JPMorgan Chase and Bank of America have had discussions with tech companies about systems that monitor worker emotions to boost performance and compliance, according to executives at the banks,” reports Hugh Son in Bloomberg Businessweek. They got the idea from MIT Sloan School prof Andrew Lo, who strapped wristwatch sensors that measure pulse and perspiration on 57 stock and bond traders to monitor their reactions in a simulated trading environment. “Imagine if all your traders were required to wear wristwatches that monitor their physiology, and you had a dashboard that tells you in real time who is freaking out,” Lo said to Son. “The technology exists, as does the motivation—one bad trade can cost $100 million.”

If this suggests that employee monitoring devices will be limited to high-risk occupations, you should read Thomas Heath’s Washington Post article on Boston-based Humanyze. Humanyze makes and monitors employee ID badges that hang around your neck. “Each has two microphones doing real-time voice analysis, and each comes with sensors that follow where you are in the office, with motion detectors to record how much you move,” writes Heath. “The beacons tracking your movements are omitted from bathroom locations, to give you some privacy.” The company’s CEO Ben Waber predicts that “every single” ID badge will be so equipped within three to four years.

As with other means of digitally monitoring and measuring employee activity, companies probably should expect some pushback, including legal challenges relating to privacy and discrimination. But Waber says that you can tell employees that their new IDs are “exactly like a Fitbit for your career.” I think it’s going to be a little harder to explain away their unflattering similarity to Cowlars.

Hiring algorithms gone wild: When you’re done chewing the Cowlar cud, you might want to consider the excerpt published in The Guardian from the new book Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy, by data scientist and mathbabe.org blogger Cathy O’Neil. The book is broad-based, but the excerpt is focused on how algorithms can shortchange employers and potential employees in HR processes, like personality tests used in the hiring process.

“Even putting aside the issues of fairness and legality, research suggests that personality tests are poor predictors of job performance,” explains O’Neil. “Frank Schmidt, a business professor at the University of Iowa, analysed a century of workplace productivity data to measure the predictive value of various selection processes. Personality tests ranked low on the scale – they were only one-third as predictive as cognitive exams, and also far below reference checks.”

The problems lie in the algorithms on which these tests are based. For starters, they contain the biases of the data scientists who created them, and their basis is opaque to everyone else. “What’s worse, after the model is calibrated by technical experts, it receives precious little feedback,” adds O’Neil. “The companies hiring minimum-wage workers… act as if they are managing herds. They slash expenses by replacing human resources professionals with machines, and those machines filter large populations into more manageable groups. Unless something goes haywire in the workforce – an outbreak of kleptomania, say, or plummeting productivity – the company has little reason to tweak the filtering model. It’s doing its job – even if it misses out on potential stars. The company may be satisfied with the status quo, but the victims of its automatic systems suffer.”

There’s lots more on hiring programs in the excerpt. Read it here.

An update from the platform revolution: Speaking of book excerpts, back in March, this column included a chapter from Platform Revolution: How Networked Markets are Transforming the Economy and How to Make Them Work for You by Geoffrey Parker, Marshall Van Alstyne, and Sangeet Choudary. In it, the authors describe how to figure out how vulnerable your industry might be to a new competitor with a platform-based strategy. I have no idea if anyone at Goldman Sachs read the book, but the multinational banking firm is certainly acting as if the powers-that-be took its message to heart.

“Goldman has recently started giving clients the tools that made it a trading powerhouse, for free,” reports Justin Baer in The Wall Street Journal. Among those proprietary tools is something called Securities DataBase (SecDB), which is worth billions of dollars and, says Baer, “remains Goldman’s prime tool for measuring risk and analyzing the prices of securities, and…calculates 23 billion prices across 2.8 million positions daily.”

Why would Goldman do this? Unsurprisingly, it’s not sheer altruism. The software system may not be as much as a competitive advantage as it once because of changes in the trading environment, explains Baer, but it does offer value to Goldman’s clients. It allows them a way to run complex analyzes of the trades they are considering and monitor the risks once the trades are made. “Thus, Goldman’s new gambit: Deploy its technology to win more business from clients,” declares Baer. “Many of those tools are being offered in the form of web-based applications that customers can customize and operate on their own.”

Sounds like a pretty compelling platform for attracting and retaining customers to me.