This story is part of a weekend column featuring translations from respected Chinese media outlets, as selected and edited by Sixth Tone. All are reproduced with the outlets’ permission. A version of this article was first published in Caijing ELaw.

SHANGHAI — As the evening’s frigid winds force pedestrians to tightly wrap their coats, a dozen figures hurriedly swipe their cards to escape the cold and enter their company building.

They laugh and joke, but fall silent once they enter the elevators to go upstairs. A young man in their midst tries to continue an inside joke, but is stopped by a colleague’s stern look.

“The elevator’s camera is connected to the OA (office automation) system, and has recording equipment,” whispers a senior engineer after stepping out of the elevator. “It was supposed to be confidential, but a buddy who used to work at human resources told me.”

The reason this group of people arrived at their architectural engineering company at close to midnight on a cold December night is also due to the same OA system. They didn’t come voluntarily, nor were they told to come by the company’s leadership.

“It’s the deadlines the system gave us,” says the senior engineer, who, like other interviewees in this story, requested anonymity. “It suddenly gave an action item on the 14th, requiring it to be completed by the 16th, so that’s why we have to scramble.” No person was involved in this decision, which the OA system issued directly to employees. A failure to complete the action item on time will mean the performance portion of an employee’s monthly salary “will be reduced by 30% or more,” the senior engineer says.

According to the system’s developer, a Shanghai IT company, it has a powerful machine learning capacity, can automatically assign tasks to groups in accordance with the different stages of a project, and even “improve the efficiency of staff” through a combination of the company’s cameras and punch cards.

However, employees say being managed by the system is not nearly as wonderful as its creators make it sound. The system, they generally say, is “inhumane.”

“Sometimes we’re forced to work overtime when it isn’t necessary, to the point that even when there’s nothing to do we have to come to work on the weekend just to punch the card — otherwise we get a performance deduction,” the senior engineer says. At first, he did not understand this “stupid” algorithm, but later on he believed he’d figured out what was happening: “Maybe management is encouraging us to work overtime? They don’t want to say it directly, so they’re using the machine to tell us.”

Because of such “unreasonable” work assignments, some of the senior engineer’s colleagues approached management to talk about the situation. Their response was that, indeed, the system had issues, but there also wasn’t anything they could immediately do about it. Employees were recommended to complete the assigned tasks. The company’s appeal process is lengthy, and losing it is likely.

This company is far from an exception.

In line with similar trends abroad, management software is increasingly taking over Chinese workplaces. The government, generally a believer in digital solutions, has even provided companies with subsidies to make the switch. Data from market research firm iResearch’s “2020 China Enterprise Procurement Digital Management Research White Paper” shows the Chinese market for digital management tools grew from 7.08 billion yuan (then $1 billion) in 2017 to 11.24 billion yuan in 2019, and it is expected to exceed 20 billion yuan by next year.

Companies normally use such software to monitor employees’ attendance, manage their workloads, and reduce management costs. But these systems rob employees of being able to take their own initiatives. There is often no recourse when they disagree with the system’s decisions. They can either do as they are told, or face salary deductions. With workers having only to answer to a computer system, human relations fray.

“Things we were familiar with are gradually becoming unfamiliar,” one white-collar worker laments.

The Forgotten Supervisor

In traditional business management, when a new task is assigned to a department, the department head breaks it down into individual action items to be completed by employees. In addition, the department head has the final say in hiring, scheduling, and performance reviews. But digital management tools chip away at this authority.

In the past few years, a workshop supervisor at an American-owned electronics manufacturer has seen his career take a strange direction. Employed in a factory in Wuxi, a city in eastern China’s Jiangsu province, he had gotten used to its 12-hour-shift rhythm. His days making sure production goes smoothly and product quality meets standards start at 7:30 in the morning, are broken up by lunch at noon, and end at eight at night when he hands responsibility over to the night shift supervisor. He then takes the company shuttle home, “like clockwork.”

Every year during the recruitment season in April, the supervisor would have the final say on the employees assigned to his workshop. He’d also be responsible for the daily management, guidance, training, and evaluation of workshop staff: “I decided the daily work tasks as well as performance evaluations.”

In the past, he was regularly approached by relatives from his hometown, who begged him to recruit their children into the workshop, as well as by workers and technicians who secretly asked for favors in performance evaluations and leaves of absence. He mostly found ways to accommodate them, giving him “a sense of accomplishment.”

In 2019, the foundation of the workshop supervisor’s standing in the workplace suddenly collapsed: The company began to introduce a “smart” employee management system. “It’s said to be a definite order from the U.S. headquarters, so it has to be executed,” the workshop supervisor says. “The technical department found a Suzhou-based information company, who worked on it for six months, and we started using it when it was installed into the factory.”

The new system includes more than 20 cameras throughout the workshop, an OA system that keeps track of workers’ information, and an electronic time and attendance system. The camera records the presence of all workers, and monitors their work efficiency. For example, each component has a specified processing time, and the cameras can identify the worker’s actions. If the task takes too long, it will be reflected in the worker’s performance evaluation at the end of the month, and there will be a corresponding salary deduction. A timekeeper will also manually review the system’s findings.

The electronic time and attendance system has refined the card punching procedure, relocating it from the company’s main door to the workshop entrance. If a worker leaves the workshop to go to the bathroom, for instance, they must swipe their card. If any absence lasts longer than 15 minutes, a record will be made in the OA system.

The OA system tracks each employee’s work and absences over the month, and it archives camera footage along with these attendance records. Those who exceeded their assigned workload will be rewarded, and those who were absent or inefficient will have their wages deducted at the end of the month. Although the company stipulates that “the workshop supervisor has the final say on performance evaluations,” the workshop supervisor believes he has completely lost control over his staff.

The system has been running for over a year, and fewer and fewer people seem to care about the workshop supervisor. His once close relationship with his workers is starting to fade. Once upon a time, he would always take care of workers with family emergencies, maybe granting them half a day off without going through the normal procedures, to prevent them from using up their leave quota. He’d also reward extra performance evaluation points to resourceful workers who came up with ways to improve the assembly line.

But when everything runs strictly according to algorithmic procedures, the supervisor is no longer the glue holding everything together. “Even if an employee actually appeals the results of an evaluation, superiors will generally adopt the decision of the OA system. They believe machines don’t make mistakes, whereas I might be biased because of my own feelings.”

An incident from the summer of 2019 is still fresh in the workshop supervisor’s mind: A worker went to the restroom for three seconds longer than the allotted time, and the system deducted 50 yuan from his salary at the end of the month. The worker then filed a complaint. The workshop supervisor called the human resources department about it, and received a cold reply: “Even one second late is still late; rules and regulations need to be complied with.”

Word of the incident soon spread through the workshop. The workshop supervisor was eating in the canteen when he heard someone say, “He (the workshop supervisor) isn’t too useful anymore, now that those up top only consult the computer.”

“Everyone is left to their own devices, and working relationships aren’t cultivated,” the workshop supervisor says. He believes that when the supervisor is “useless” to the workers, he and the workers lose their once good collaborative relationship. Destroying the synergy between the upper and lower levels of the workshop for the sake of a few seconds of efficiency, “really doesn’t pay off,” he says.

A deputy head of marketing at a leading fast-moving consumer goods company in southern city Guangzhou shares the workshop supervisor’s laments. She has been working at the company for over a decade, growing from fresh graduate hire to the backbone of the team. Previously, she needed to review and approve every chart and project plan submitted by staff, give suggestions, and develop training plans: “It was all me, teaching them how to cope with different situations.”

That situation changed three years ago, when the company introduced an “automated decision-making system” from Italy to reduce the workloads of frontline managers.

In the system, the work and training of staff is algorithmically set into a number of fixed processes. “Operations, technology, legal — each has its own time frame, so the staff only needs to go from one step to another,” the deputy head of marketing says. Company rules stipulate that department heads still have ultimate decision-making power, but she believes that, in reality, she has little to decide. Her own work has been simplified to support the work of employees, standardize the various documents submitted by them, and organize team-building activities.

The deputy head of marketing recalls that in order to get the best supplier price, one of her employees creatively streamlined the customer interface process and completed the task half a month earlier than originally planned. However, the key project proposal and the customer’s electronic signature hadn’t been uploaded, so according to the system it was “an action item not closed on time,” and hundreds of yuan were to be deducted from the employee’s salary.

The deputy head of marketing went to upper management to talk about it, but they said that in order to modify the algorithm, the digital department management needed to be contacted for a meeting, after which the highest level of management would have to approve their decision, and then finally the system development company could be contacted to modify the system. This whole process would take half a month.

“For a few hundred yuan, it’s not worth it,” the supervisor concluded.

“But she saved the company at least 80,000 yuan,” the deputy head of marketing retorted.

“What’s that compared with the hundreds of thousands spent on modifying the algorithm?” the supervisor spat back.

Eventually, the supervisor agreed to reward the employee with a quarterly bonus to make up for the fine.

After the incident, the deputy head of marketing found that people were more likely to just work on their own. They no longer looked for her when they needed assistance. “Does the system serve us, or do we serve the system?” she wonders.

Yao Jianming, director of China Enterprise Innovation and Development Research Center at Renmin University of China, told Caijing ELaw the algorithm itself is just a tool, and how it manages and constrains people is ultimately decided by people. If the algorithm is unreasonable, the root of the problem is people, not the algorithm itself.

Yao believes there are corporate processes best left untouched by artificial intelligence. “At the operational level, the feasibility of aiding decision-making with the help of machines and algorithms is higher, but if you rise to the strategic level, involving corporate strategy, culture, responsibility, ethics and other issues, the possibility of using machines to make decisions is not great.” He stressed that OA systems need to be used with flexibility, and that, even at the operational level, machine decision-making must be guided by a sound corporate culture and strategic decisions.

Digitization for the Sake of Digitization

But people who work at OA system development companies know all too well how misguided their clients can be.

A marketing director of an OA system development company tells Caijing ELaw various types of enterprises that contact him are often “more concerned about the term ‘digitalization’ because they want to apply for subsidies from the government or a higher level (of the company).” In recent years, governments from the national level down to individual cities have all rolled out action plans on accelerating workplace digitalization across industries. The eastern city of Suzhou, for example, gives companies stipends of up to 100,000 yuan.

But as for whether such digitization moves are beneficial or detrimental to clients’ daily work, “they don’t care,” he says. In one exemplary case, the head of the digitalization department at a large state-owned real estate company got in contact to hire him for a digital upgrade at the company.

The detailed upgrade plan he was sent stunned him. “It was all empty-headed grand theories, layouts, and strategies, with nothing about improving efficiency or streamlining processes,” the director says. “In fact, their own requirements were contradictory — they wanted to standardize the daily work as well as increase innovation and creativity.”

The director asked the head of digitalization out to dinner. During the meal, he repeatedly stressed that the plan “needed to be adjusted,” but the head looked like he was in a tough spot. Saying these were his own leaders’ decisions, it was impossible for him to change them — but they all must be accomplished.

“I told him at the time that it was making it difficult for me,” the director says, “that going fully paperless and algorithmically assigning tasks won’t be very effective, according to the nature of your work.” But the client insisted. In exasperation, the development company completed the upgrade task as requested.

“I can’t forget what I heard during the annual customer feedback,” the director says with a bitter laugh. “As soon as one of their employees heard we were the developers, he asked bluntly, ‘You’re the developers? Do you know anything about your industry? Do you know anything about making a system? If not, get the hell out!’”

Yao, of Renmin University, points out that the reason why many enterprises have had problems in digital transformation is mostly because they think about digital transformation from a purely technical perspective, and ignore the management logic involved. “There is certainly no value in doing digital transformation on such a premise,” he says.

Trouble in a Rice Ball

Recently, a user of social media site Weibo said a technology startup in eastern city Hangzhou required employees to sit on high-tech, sensor-equipped cushions. Employees discovered the cushions monitored their heart rate, breathing, posture, fatigue, and other data, to see whether they were slacking off. This triggered much criticism.

A sales executive at a technology company in Hangzhou that developed a similar program tells Caijing ELaw that buyers of such products are all small- and medium-sized enterprises, and that the companies explicitly ask to have the data instantly uploaded to allow management to monitor employees’ work.

Manufacturers of such products often claim they can help people keep an eye on their personal health, and they’re not intended to be used as monitoring tools by management. “Not for monitoring? That’s bullshit. The only purpose of developing something like this is for monitoring,” the executive says.

It’s not just tech startups and small factories adopting dubious tactics to keep an eye on their personnel.

Caijing ELaw borrowed an employee card from a large state-owned power company in Beijing and entered the business park where the company is located. During the day, the reporter used this card to pass through the gate, take the elevator, punch in at the workstation, dine in the cafeteria, and shop at the store. In the evening, the reporter checked the internal platform used by the company’s HR and found it had recorded the exact time and consumption amount for all the above activities, and all the data was associated with each employee’s OA system profile.

An employee in the company’s Communist Party work group insists all this information is useful: “Our working hours are 8:30-5:00, lunch break 12:00-1:30. If one is found to use working hours to go to the store or to leave, it is recorded as ‘suspicious,’ and the performance evaluation will include this information. If similar phenomena happen over five times a month, a portion of the bonus will be automatically deducted.”

However, most employees are unaware of this policy, even though it has been cutting into their income. “It’s not surprising that the card has this feature. We didn’t know before, but it’s not surprising,” one employee says. “With the technology we have now, it’s completely guaranteed we have no privacy once we enter the office.”

The reason the deductions have been going unnoticed is because they were taken out of people’s year-end bonuses, the work group employee says. “The average person would not notice if the year-end bonus is lacking 80 or 100 yuan. They would just think it was a tax deduction for something.” He says this approach has been used as a cost control “secret” for several years, each year saving the company nearly 1 million yuan. “We learned about this method from our peers. As far as I know, they got it from a listed private company.”

Qiu Lingyun, an associate professor at the Department of Management Science and Information Systems at Peking University’s Guanghua School of Management, tells Caijing ELaw that though algorithms are powerful data analysis tools, their use should be restricted by some basic principles.

“It would certainly be foolish not to use the data; but how to use it most effectively reflects managerial competence,” says Qiu. “As part of the management function, managers have the right to monitor the output of their employees — but it must be done in a way that is both rational and easy for employees to accept.”

When an administrative secretary at a private research company in Shanghai chose to leave her job in August, she discovered her employer did not believe in this “rational” approach. To her surprise, an HR worker said she first had to pay a few hundred yuan in compensation for lost working time: “According to the company, leaving the premises without permission during working hours is considered against the rules.” When the administrative secretary expressed doubt she had ever shirked work, the HR worker pulled a single sheet from the printer which had six months of swiping out during work hours on it, all in red. “Swipe your card during working hours, and the system will automatically generate a red warning record,” they explained.

“I just went to the convenience store to buy a rice ball!” the administrative secretary retorted. HR responded she had read the rules in black and white before she joined the company, and she had knowingly violated them. The monetary deduction was “justified.”

Liu Deliang, a professor at Beijing Normal University Law School, says that “although the ways enterprises manage and control their employees’ behavior can be inhumane, they do not violate personal privacy in the legal sense.” However, he also stressed that overly strict, inhumane management is often not conducive to the motivation and creativity of employees.

According to Yao, “business management involving culture, strategy, and innovative decisions, especially relating to the most critical resource of the enterprise — people — cannot entirely rely on scientific theories and methods.”

He continues: “It is fair to say that there are currently no successful digital transformation companies, and there is unlikely to be one in the future. Digital transformation is a process, and it is always being developed.”

In late December, the Shanghai-based senior engineer received his year-end bonus. On the account for his project team’s performance, it was 7,000 yuan less than the previous year. Afterward, he shared a photo on social media of him and his wife visiting Shanghai Disney Resort, accompanied by the lyrics of the alternative rock band Omnipotent Youth Society:

Under the milky way / an electronic wasteland / billions of peaks and valleys / billions of wallowing people.

Translator: Matt Turner; editors: Ye Ruolin and Kevin Schoenmakers.

(Illustration: A flow chart demonstrates how a digital managing system operates. Sixth Tone)

(Header image: Visual element from prostockstudio, z_wei, and StarLineArts from People Visual, re-edited by Ding Yining/Sixth Tone)