The Market Turn: Are Workers Exposed to the Market Different in Body and Mind?

Our economy and society are currently seeing a big change. Many firms are replacing the traditional management practices of supervision, goals, and managed rewards with a market turn that exposes workers to the risks and rewards of competitive markets. This is seen in many places, from the “contractors” delivering meals or transportation services under app platforms all the way up to investment bankers taking a cut from each deal. Do we know what this does to people?

We do not, which is why research like Alexandra Michel’s recent publication in Administrative Science Quarterly is important. She looked at bankers’ transition into market-exposed roles, which usually happens after 9 years of employment. What she found was remarkable, because it demonstrated that moving from managed rewards to market rewards is a radical change that alters the mind and body of the worker.

Why is that? Think about what life is like for most workers in regular organizations. Their role is defined, their goals are defined, and the work is structured by supervisors or pre-defined organizational processes. It is a predictable life. If they have contingent rewards or incentives, the goals to fulfill have been specified in advance and the resources to reach the goals are in place. At most, things could be unpredictable because managers rank workers, so the rewards to one depend on the others. Still, this is a pretty predictable life.

Market-exposed work is different. The role is to meet demand in whatever form the demand takes. The Uber driver (for example) needs to be in the right place at the right time. The investment banker needs to bring the parties of a potential deal together, so they agree on the terms. This is an unpredictable life. Effort and rewards are no longer connected as well because the market is unpredictable, and there is little reward outside that given by meeting demand. And strangely enough, although highly contingent rewards in conventional organizations make people work hard, the market turn makes people work harder simply because there is always one more potential, but uncertain, reward that seems to be within reach.

The result is overwork. And more importantly, unlike the managed employees, the market-exposed employees mostly blame themselves. After all, they are entrepreneur-like in job description and should be designing work so that they actually meet market demand. Business failure is personal failure, both in their mind and in those of their colleagues, who subscribe to the same belief system.

The solution is obvious. They need to manage their body and their mind in order to be strong enough for the overwork and stress of their role. And this is where it gets scary. The bankers Michel studied read about medical drugs of various kinds and made liberal use of doctors who would give them the medications they asked for. Some of them even found foreign mail-order suppliers of drugs that would enhance the performance of the mind, or conceal fatigue, or handle various medical breakdowns. Because body failure meant business failure, they manipulated their bodies.

Incentives are supposed to be good for organizations, and market incentives especially so because they allow worker and organization to completely agree on what should be done. Only now are we beginning to understand that they can also be exceptionally harmful for the worker.

Michel, Alexandra. 2022. Embodying the Market: The Emergence of the Body Entrepreneur. Administrative Science Quarterly, forthcoming.