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The Virtual Workplace: A Reality Now

Wayne F. Cascio

University of Colorado – Denver

Consider the new paradigm of work—anytime, anywhere, in real space or in cyberspace. For many employers the virtual workplace, in which employees operate remotely from each other and from managers, is a reality now, and all indications are that it will become even more prevalent in the future. In and of itself, this represents a dramatic change in how we work, and it presents new challenges for our profession. The challenges stem from the physical separation of workers and managers wrought by such information-age arrangements as telecommuting and virtual teams. "How can I manage them if I can’t see them?" is a question that many managers ask.

Technology: Enabler of the Virtual Workplace

Where we work, when we work, and how we communicate are being revolutionized, as a "seamless" web of electronic communications media—e-mail, voice mail, cellular telephones, laptops with modems, hand-held organizers, video conferencing, and interactive pagers—makes teamwork and mobility a reality. Not only is work becoming seamless as it moves between home, office, and phone, but it also is becoming endless as it rolls through a 24-hour day (Power Gizmos, 1997). To be viable, virtual offices require four types of information:

Online materials that can be downloaded and printed

Databases on products and customers that are accessible from remote locations

Well-indexed, automated central files that are accessible from remote locations

A way to track the location of mobile workers

When Virtual Work Arrangements Are Appropriate

Virtual workplaces are not appropriate for all jobs. Jobs in sales, marketing, and consulting seem to be suited best, although even in these jobs, virtual work arrangements are not recommended for new employees or those who are new to a position. The key is to work with employees well ahead of planned transitions. Firms such as Lotus, IBM, and Hewlett-Packard have written guidelines, training, and networks of peers to facilitate the transition. For example, Hewlett-Packard’s guidelines for virtual workplaces address topics such as who can participate, family and household issues, remote office setup, and administrative processes.

Assuming that virtual work arrangements are appropriate, and that at least some employees are willing to try them, how should a manager proceed? Two types of virtual work arrangements that are becoming more popular are virtual teams and telecommuting. Let’s consider each of these:

Virtual Teams

In a virtual team, members’ primary interaction is through some combination of electronic communication systems. Members may never "meet" in the traditional sense (Power Gizmos, 1997). Such an arrangement provides several advantages:

It saves time, travel expenses, and eliminates lack of access to experts

Teams can be organized whether or not members are in reasonable proximity to each other

Firms can use outside consultants without incurring expenses for travel, lodging, and downtime

Virtual teams allow firms to expand their potential labor markets, enabling them to hire and retain the best people regardless of their physical location

Employees can accommodate both personal and professional lives

Dynamic team membership allows people to move from one project to another

Employees can be assigned to multiple, concurrent teams

Team communications and work reports are available online to facilitate swift responses to the demands of a global market

Of course the major disadvantages of virtual teams are the lack of physical interaction—with its associate verbal and nonverbal cues—and the synergies that often accompany face-to-face communication. Despite these drawbacks, virtual teams are growing in popularity. "Groupware," computer-based systems explicitly designed to support groups of people working together, enables virtual interactions (Ishii, Kobayashi, & Arita, 1994). Groupware includes components from simple to sophisticated. The simplest forms are E-mail and newsgroups. In the middle are forms routing and document management. Sophisticated groupware includes interactive systems that link employees with one another and with customers. Interactive video conferencing that incorporates document cameras with zoom features using WYSIWIS technology ("what you see is what I see") is an example of this. Corporate intranets afford some of the highest gains now available from groupware. The goal of groupware technology is simple: to promote and improve interaction among individuals (Aannestad & Hoooper, 1997). This is collaborative empowerment.

Training members and managers of virtual teams. A 1996 survey conducted by Dale Carnegie Training found that 90% of American workers spend at least part of their work day in a team situation, yet only about half received any formal teamwork training. Virtual teams add another layer of complexity to any teamwork situation. They have created a rich training agenda, for example:

How to use the software to enhance team performance

How to manage the anonymous environment, and when to use it

How to provide anonymous participation and feedback when ideas or criticism need to be brought out. This is particularly important since the traditional cues of social interaction—body language and hand gestures—may not be available

Social protocol for virtual teams

Since changes in team membership must occur with seamless continuity, it is important to teach common culture values—for example, team membership may change frequently, and it is not personal


Another form of virtual work arrangement is telecommuting—work carried out in a location that is remote from central offices or production facilities, where the worker has no personal contact with coworkers, but is able to communicate with them using electronic means (Gupta, Karimi, & Somers, 1995). As of late 1997, roughly 11 million US workers telecommuted, a 30% increase since 1995, according to a study by AT&T (Jackson, 1997). Two of every three Fortune 500 companies now employ telecommuters.

Company practices with telecommuting. Travelers Insurance provides orientation programs for telecommuters, their managers, and also for their coworkers who do not telecommute. GTE pays for office systems and equipment that does not duplicate what employees use at work. However, Hewlett-Packard employees must buy their own equipment.

When telecommuting does makes sense (right job, right person, right reason, right boss) firms report that people’s strategic planning skills go up dramatically because they have blocks of time to think (Warner, 1997). People themselves say they are as much as 40% more productive while working away from the office, because they have fewer distractions.

They need to send a few more voice mails and e-mails to keep the boss informed, but technology makes this possible—laptops and computer servers that give mobile employees access to company files. "Mix and match" arrangements, in which workers spend one or two days a week at the office, where they can interact with managers and coworkers, seem to work best. In fact, AT&T found in its 1997 survey, that fully one third of telecommuters would look for other work if they were forced back into the office fold. More than 70% reported that they were more satisfied with their jobs than before they started telecommuting, and 75% reported feeling more satisfied with their personal and family lives than before starting work at home, for reasons including better relations with spouses and children, improved morale, and less stress (Jackson, 1997).

Virtual Office Challenges for Managers

By far the biggest challenge is performance management ("If I can’t see employees, how do I know that they are working?"). This is not the same thing as performance appraisal, an exercise that many managers do annually to identify and discuss job-relevant strengths and weaknesses of individuals or teams. In contrast, performance management is part of a continuous process of improvement over time. It demands daily, not annual, attention.

At a general level, the broad process of performance management requires that you do three things well: define performance, facilitate performance, and encourage performance (Cascio, 1996). Like a compass, the role of the manager is to provide orientation, direction, and feedback.

In managing a virtual workplace, a second major challenge is communication. It is important not to over-rely on e-mail, which is one-way communication. In addition to e-mail, managers need to learn how to conduct effective audio meetings, and to balance e-mail, voice mail, video conferencing, and face-to-face communications.

Implications for I-O Psychologists

New business realities, coupled with evolving attitudes about work, suggest that virtual workplaces are here to stay. The challenges of managing a virtual workplace will escalate in scope. What does all of this imply for I-O psychologists? A quote from renowned Canadian hockey player Wayne Gretsky illustrates the essence of the challenge of managing a virtual workplace. When asked for the secret to his goal-scoring success he said: "I don’t skate to where the puck is. I skate to where the puck is going to be." To be a beneficiary, rather than a victim, of these emerging business trends, skate to where the puck is going to be. Develop the performance management systems, information-access capabilities, and training systems to develop skills that will be important in the future. Always look ahead; learn from the past, but don’t live in it. By embracing these emerging changes in the world of work, we in I-O psychology can lead change, not just react to it. This will be the greatest challenge of all.


Aannestad, B., & Hooper, J. (1997, November). The future of groupware in the interactive workplace. HRMagazine, pp. 37–42.

Cascio, W. F. (1996, September). Managing for maximum performance. HRMonthly (Australia), pp. 10–13.

Gupta, Y., Karimi, J., & Somers, T. M. (1995, November). Telecommuting: problems associated with communications technologies and their capabilities. IEEE Transactions on Engineering Management, 42 (4), 305–318.

Ishii, H., Kobayashi, M., & Arita, K. (1994, August). Interactive design of seamless collaboration media. Communications of the ACM, 37 (8), 83–97.

Jackson, M. (1997, November 21). Telecommuters love staying away, new survey shows. The Denver Post, p. 4C.

Power gizmos to power business. (1997, November 24). Business Week, p. 190.

Warner, M. (1997, March 3). Working at home—the right way to be a star in your bunny slippers. Fortune, pp. 165, 166.

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