Working Paper
Building on extensive evidence that individuals systematically value non-monetary benefits from organizational membership, the author argues that an organization is human centric to the extent that membership in it is attractive, for a given level of monetary compensation. He illustrates how the non-monetary benefits of membership can be dimensionalized using extensively validated frameworks such as self-determination theory. Further, the author shows that regardless of how non-monetary benefits are valued by employees (individually or in combination with each other and with pay), from the employer’s viewpoint, declines in such offered benefits must be offset by some mix of higher wages, greater supervision costs, and/or lowered ex-pectations of discretionary effort to preserve membership attractiveness.
The author applies this framework to the case of Artificial Intelligence (AI) technology, showing how its adoption can either erode or enhance human-centricity of the adopting organization, depending on its deployment. Because human capital is likely to remain indispensable despite algorithmic advances, the theory developed here implies that there is a business case for AI adoption in a manner that strengthens rather than undermines the human centricity of organizations.
Faculty
Professor of Strategy
