Zoomed Out

In this project, we explore the performance evaluation consequences employees experience when they telecommute. We posit that professional network formation is an important mediator in the relation between telecommuting and performance evaluation, as employees who telecommute build less effective networks, which are, in turn, associated with less favorable evaluation and promotion decisions. Exploiting proprietary data from an e-commerce firm and the first COVID-19 pandemic-led lockdown as an exogenous shock to telecommuting, we derive three important insights. First, we find support for the notion that employees who telecommute build less effective networks and specifically achieve lower centrality in their firm’s social network. Second, we find that when employees have lower network centrality, this is associated with more average (as opposed to extremely positive or extremely negative) performance ratings and a lower likelihood of being rated as “promotion-ready”. Third, we find that employees’ level of network centrality mediates the relation between telecommuting and performance evaluation outcomes. Collectively, our results highlight the challenges that telecommuting as a relatively novel type of work arrangement poses for management control.