Mr. Eden Profits from Watching His Workers Every Move

Source: Wall Street Journal, December 1, 1994, p. A11

Ron Edens runs a company called Electronic Banking Systems, Inc. Located outside Baltimore, Maryland, EBS provides outsourcing clerical services. It handles the clerical tasks involved in processing donations for groups such as Mothers Against Drunk Driving, Green peace, and the National Organization for Women. Most of Edens’s employees earn $7 an hour or less doing repetitive tasks such as opening envelopes or recording donation data on a computer. Ron Edens is especially proud of the control system he has created to closely monitor his employees.

Walking around EBS, you see long lines of people sitting at spartan desks, slitting open envelopes, sorting contents, and filling out “control cards” that record how many letters they have opened and how long it has taken them. These letter openers must process three envelopes a minute. Nearby, other workers tap keyboards, keeping pace with a quota that demands 8,500 strokes an hour. Jobs are highly specialized and involve extensive repetition. Letter openers only open envelopes and sort contents. Workers in the audit department just compute figures. Data-entry clerks punch in the information that the others have collected.

The workroom is silent. Talking is forbidden. The windows are covered. Coffee mugs, personal photos, and other adornments are barred from the worker’s desks. Edens wants to remove anything that might distract his workers from the job at hand. For example, commenting on the blocked windows, Edens says, “I don’t want them looking out – it’s distracting. They’ll make mistakes.”

In his office upstairs, Edens sits before a TV monitor that flashes images from eight cameras posted throughout the plant. “There’s a little bit of Sneaky Pete to it,” he admits, using a remote control to zoom in on a document atop a worker’s desk. “I can basically read that and figure out how someone’s day is going.” In addition, his system’s software generates daily reports recording the precise number of keystrokes tapped by each data-entry worker and the number of errors made by each worker.

The work floor at EBS resembles an enormous classroom in the throes of exam period. Desks point toward the front, where a manager keeps watch from a raised platform. Other supervisors are positioned toward the back of the room. “If you want to watch someone,” Edens explains, “it’s easier from behind because they don’t know you’re watching.” There’s also a black globe hanging from the ceiling, in which cameras are positioned.

At EBS, workers handle thousands of dollars in checks and cash. That’s one reasons, Edens says, for the cameras. It can help deter would-be thieves. But Edens concedes that tight observation also helps EBS monitor productivity and weed out workers who don’t keep up. “There are multiple uses,” Edens says of surveillance.

Edens is unapologetic about his control system, including the rule that forbids all talk unrelated to the completion of each task. “I’m not paying people to chat. I’m paying them to open envelopes,” he says.

Edens offers considerable insight into his philosophy of management when he says, “We don’t ask these people to think – the machines think for them. They don’t have to make decisions.”

Answer the following questions:

1. What type(s) of control(s) is(are) Mr. Edens using to ensure high worker productivity?  Please use the controls discussed in Figure 11.1 and/or 11.3 in your discussion.  Also, provide specific examples of each of the controls you discuss.

2. What are the advantages of Mr. Edens’ control system?

3. What are the disadvantages of Mr. Edens’ control system, and what will result from those disadvantages?

4. What ethical issues, if any, are you concerned about at EBS and why?