Why are external accountability and thoughtful integration of algorithms necessary now to ensure fairer labor dynamics across work environments? What’s the puzzling problem that comes with increasing the level of transparency of these algorithms?
Hatim Rahman is an Associate Professor of Management & Organizations at Northwestern University in the Kellogg School of Management, and the author of the new book, Inside the Invisible Cage: How Algorithms Control Workers.
Greg and Hatim discuss Hatim’s book, and his extensive case study of a company matching employers with gig workers, exploring the ways algorithms impact labor dynamics. Hatim draws connections between Max Weber's concept of the 'iron cage' and modern, opaque algorithmic systems, discussing how these systems control worker opportunities and behavior. Their conversation further delves into the evolution and consequences of rating systems, algorithmic transparency, organizational control, and the balance between digital and traditional workforce structures.
Rahman emphasizes the need for external accountability and thoughtful integration of algorithms to ensure fairer labor dynamics.
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Experimenting to find the right balance between regulation and self-regulation
33:36: Finding the right balance between self-regulation—where organizations can figure things out for themselves—and real legislation, regulation that creates societal and broader outcomes that are beneficial is where we are right now. Of course, the tricky thing is that you don't want to get that balance wrong either. But, I do think we're at the stage where we need to experiment, right? We need to figure out those optimal levels of transparency, opacity, regulation, and self-regulation.
Why employers struggle to recognize and value skills badges from lesser-known institutions
39:55: The problem with the skill sets that people develop is that, employers, they didn't understand what it meant. Right? Let's say you have a badge from some smaller university or community college. Employees generally struggle to understand what that means, right? Or they'll pass over it. They'll look for more recognizable, established credentials and proxies for skills. And so, at least when I was studying, many of the workers, employers—like we tried, but it didn't help us because the employer didn't know what it meant or how the passing of that skills test would concretely help them do the job that they required.
Why do digital platforms struggle to balance transparency and risk?
14:17: Organizations and digital platforms want to find the right balance, but they just struggle a lot to do so because many employers are risk-averse and want to limit their liability. I imagine that this is one of the reasons why they have favored opacity, right? If we don't have to reveal or tell, then it limits our ability to get exposure to lawsuits or exposure to gaming, zone, and so forth.
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