Remote work and effort provision in teams

Abstract

Remote work policies remain controversial partly because of productivity concerns, which are potentially exacerbated in team settings. Using experiments, we isolate how location-based beliefs of teammate effort affect the own-effort choices of participants assigned to work with remote and office-based teammates. Participants perform a real effort task and can contribute this effort to an individual account, paying a piece rate wage, or to a team account using a minimum-effort payment scheme. We find that remote workers do not complete fewer tasks than their office-based counterparts. Yet, teams suffer from lower effort due to workers responding to beliefs that remote teammates contribute less effort to the team. In a follow-up treatment, we demonstrate that these location-based beliefs remain salient even under a revenue-sharing team payment scheme where beliefs of free-riding may have dominated. Finally, we provide unique evidence that the COVID-19 pandemic may have shifted beliefs to be more pessimistic about the effort of remote workers but did not alter the actual effort.