Computer Automation, Work Environment, and Employee Satisfaction: A Case Study

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  • Computer Automation, Work Environment, and Employee Satisfaction: A Case StudyAuthor(s): Einar HardinSource: Industrial and Labor Relations Review, Vol. 13, No. 4 (Jul., 1960), pp. 559-567Published by: Cornell University, School of Industrial & Labor RelationsStable URL: .Accessed: 25/06/2014 01:23

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    THE use of electronic computers as data-processing equipment represents

    one of the major innovations in office practices during the past decade. Like other forms of automation it has aroused great interest because of its possible social and economic effects.' The possible impact of automated office equipment on work environment and employee satisfaction has been discussed, and empirical studies con- cerned at least in part with these aspects of automation have been published by Craig,2 the Bureau of Labor Statistics,3'4

    In assessing the impact of automation on workers and their jobs, little systematic atten- tion has been paid to comparing its effects with those of more conventional changes in methods and organization of work. In this study of experience in an insurance company, changes in various job aspects, and workers' attitudes toward these changes, in the departments directly affected by the introduction of an electronic computer were compared with the effects of other types of changes that occurred at the same time in departments whose work was largely unaffected by the computer's intro- duction. In general, the changes in working environment and job satisfaction appear to have been quite similar between the two groups of employees.

    The study on which this article is based is part of the automation research project of the Labor and Industrial Relations Center at Mich- igan State University. The author is indebted to Jack Stieber and William A. Faunce for critical comments on earlier drafts, and to Gerald L. Hershey for his assistance in analyz- ing the data. Einar Hardin is assistant professor of economics and research associate of the Labor and Industrial Relations Center, Michi- gan State University.-EDITOR

    Mann and Williams,5'6 and Jacobson, Trumbo, Cheek, and Nangle.7 It can be argued that computer automation has little practical significance in an office en- vironment long exposed to ordinary mechanization and organizational, pro- cedural, and personnel changes, unless it

    1 See J. Stieber. "Automation and the White- Collar Worker," Personnel, Vol. 34, No. 3 (No- vember-December 1957), pp. 8-17; and G. Cheek, Economic and Social Implications of Automation: A Bibliographic Review (East Lansing, Mich.: Labor and Industrial Rela- tions Center, Michigan State University, 1958), pp. 91-97.

    211. F. Craig. Administering a Conversion to Electronic Accounting, Cambridge, Mass.: Riverside Press, 1955, 224 pp.

    'The Introduction of an Electronic Compu- ter in a Large Insurance Company (Studies in Automatic Technology No. 2, Bureau of Labor Statistics, U. S. Department of Labor, Wash- ington, D.C., October 1955), 16 pp.

    'A Case Study of an Automatic Airline Res- ervation System (Studies in Automatic Tech- nology, Bureau of Labor Statistics Report No. 137, U. S. Department of Labor, Washington, D.C., July 1958), 21 pp.

    'F. C. Mann, "The Impact of Electronic Accounting Equipment on the White Collar Worker in a Public Utility Company," Man and Automation (The Technology Project, Yale University, New Haven, Conn., 1956), pp. 32-39.

    6 F. C. Mann and L. K. Williams, "Organi- zational Impact of White Collar Automation," Proceedings of the 11 th Annual Meeting, (Pub- lication No. 22, Industrial Relations Research Association, Madison, Wisc., 1959), pp. 59-69.

    TE. H. Jacobson, D. Trumbo, G. Cheek, and J. Nangle, "Employee Attitudes toward Tech- nological Change in a Medium Sized Insurance Company," Journal of Applied Psychology. Vol. 43, No. 6 (December 1959), pp. 349-354.

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    entails unusual kinds and rates of change in work environment, job satisfaction, and other relevant variables. The effects of automation have not so far been com- pared with the effects of other kinds of change. The present study attempts to help fill this void. Using primarily the questionnaire data collected by Jacobson and associates, automated and nonauto- mated departments are compared with respect to perceived computer impact on the job, perceived net change in the job (regardless of cause), feelings about per- ceived job change, and satisfaction with the job.


    An IBM 650 electronic data-processing machine of standard type, equipped with card input and output and with only the ordinary magnetic-drum memory, was in- stalled in July 1956, in the statistical de- partment of a medium-sized casualty in- surance company.8 The installation was preceded by studies of procedures, by programming for the computer, and by much preparatory punching of cards. The change-over to automatic renewal of private automobile insurance policies, which was the chief application of the computer, was begun in November, and all renewals of such policies were handled by the new methods as of December 1956. After a new and satisfactory work routine was substituted in January 1957, for one that had been found defective, no further substantial changes in work methods, or- ganization, or personnel assignment oc- curred as a result of the computer instal- lation for at least a year. A 'dry run' rou- tine to spot-check policies prior to issuance

    8 Usually regarded as being of medium or small scale, this machine appears to be the most commonly used computer in this country. See F. Bello, "The War of the Computers," Fortune. Vol. 60, No. 4 (October 1959), p. 128.

    had, however, been made necessary by the high error rate caused by the original de- fective work routine, and this spot check was continued until October 1957.

    The statistical department was very familiar with punched-card methods and conventional IBM equipment, but had no previous experience with the processing and issuance of insurance policies. As soon as automatic renewal was started, the peace of the department, whose sole prod- uct used to consist in statistical and in- ternal accounting reports, was broken by the insistence of other departments and of agents and policyholders that policies be issued promptly and correctly. The in- creased exposure to complaints elicited a number of organizational changes which included the creation of a separate policy- processing division in the department, the setting and enforcement of deadlines for completion of work, and the rotation of personnel within the division to promote flexibility of personnel assignment. Many employees had to learn new procedures, forms, and codes, and the increased need for accuracy was stressed.

    Programming and direct computer op- eration also required adjustments. The de- tailed planning of the conversion, the con- struction and testing of computer pro- grams, and much other preparatory work had been assigned to the head and a few employees of the statistical department long before the computer arrived. Once the conversion was completed, however, programming became a part-time assign- ment for two employees, although a few more employees were taught the basic principles of the task as a safeguard against absenteeism or separations. The mere operation of the computer was found to be a very simple job, comparable to sorting-machine operation, an entry job in the department, and was easily learned by all in the division.

    Statistical department employees out-

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    side the new policy processing division al- so experienced some changes in tasks. These included the operation of the com- puter instead of more conventional equip- ment in compiling statistical and account- ing reports and the use of new forms and codes.

    Outside the statistical department, the installation of the computer noticeably af- fected the automobile underwriting de- partment. Its tasks used to consist of un- derwriting work proper, computation of premiums, typing of policies, and main- tenance of policy files. Although the de- partment also typed policies and main- tained files for casualty insurance under- written in other departments, the bulk of its policies were for private-passenger au- tomobile insurance, usually renewed from year to year with only minor changes. Conversion to the computer meant that the renewal of these latter policies was by and large transferred to the statistical de- partment. This substantially reduced the volume of simple work in the department, but because of voluntary quits and of limited replacement the workloads of in- dividual employees in the department did not fall commensurately. Employees previously engaged either partly or wholly in the renewal of policies were assigned work with different kinds of policies, which in some instances required the ac- quisition of new skills. Many of the under- writing forms and procedures also changed, and increased stress was placed on accuracy in the handling of new poli- cies, since these were later to be renewed mechanically. For several months there was also the periodic task of making dry runs. Nevertheless, many tasks in the de- partment changed very little.

    Some other departments were affected in minor ways. The agency department was given the task of explaining the new renewal procedure to the agents who now no longer initiated the renewal work, who

    occasionally expressed fears of reductions in commissions, and who were disturbed by the errors and delays frequent in the first two months of computer operation. The accounting department and the mail room had to modify their procedures slightly. The tasks of the remaining de- partments, comprising the majority of the approximately 325 employees in the home- office work force, were virtually unaffected by the computer installation.

    Briefly, then, the departments affected by the computer installation were the statistical department and the automobile underwriting department. All remaining departments were essentially unaffected.


    Information on changes in work flow, tasks, and organization caused by the com- puter in various departments was ob- tained in repeated interviews with super- visory personnel before, during, and after the conversion to computer operations. The description of the research site and the classification of departments accord- ing to computer impact were based on this information.

    Data on employee perception of com- puter impact and of net change, on feel- ings about perceived change, and on job satisfaction were collected in a question- naire survey conducted at the end of Feb- ruary 1957, after the conversion was es- sentially completed. The content of the questionnaire and the manner of ad- ministration are described elsewhere.9 About 85 percent of the home-office em-

    9 See Jacobson, et al., op. cit.; and D. A. Trumbo, "An Analysis of Attitudes toward Change among the Employees of an Insurance Company," doctoral dissertation, Michigan State University, 1958. The questionnaire was designed and administered by Jacobson, with the assistance of Cheek, Nangle, Trumbo, the writer, and other members of the Labor and Industrial Relations Center. The interviews with supervisors on the changes caused by the computer were conducted by the writer.

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    ployees participated in the survey. Most of the others were excluded because their work (building maintenance, part-time, or travel) excluded them from the scope of this study. For this paper, only question- naires from nonsupervisory employees were used, because the supervisory ques- tionnaires contained few relevant ques- tions. No information was obtained about the computer experiences of those who left the company before the survey. These persons were mostly young female em- ployees quitting on their own accord. No layoffs were made in the company during the decade preceding the survey.

    The questionnaire items relevant to the present report were:

    (A) What effect did the change-over (to the new computer) have on your job? 1. I was promoted; 2. I was transferred to another job; 3. I kept the same job, but the work was greatly changed; 4. I kept the same job, but the work was notice- ably changed; 5. I kept the same job, and the work was only slightly changed; 6. I kept the same job, and the work was not changed.

    (B) How did you feel about this? 1. I disliked it very much; 2. I disliked it; 3. It made no difference to me: 4. I liked it; 5. I liked it very much.

    (C) Do you think that the computer will affect your job in the next year or two? 1. Very probable; 2. Quite prob- able; 3. Possible, but not very probable; 4. Probably not; 5. Definitely not; 6. I have no idea.

    (D) How do you feel about this? 1. I dislike it very much; 2. I dislike it; 3. It makes no difference to me; 4. I like it; 5. I like it very much.

    The following three questions were in the form of a checklist of eleven job as- pects as shown in Table 2.

    (E) How has this aspect of your job changed in the past year? 1. Much more now; 2. More now; 3. No change; 4. Less now; 5. Much less now.

    (F) How do you feel about this change (or lack of change) in your job? 1. Like a lot; 2. Li...


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