Why do people quiet quit? Let's look at the theory

The internet is booming with articles about topics related to the Great Resignation, quiet quitting, returning to the offices, decreasing productivity and remote working. Various sources list many reasons explaining these phenomena, from organizational culture to leadership aspects and compensation schemes. In this blog, I attempt to look at the existential struggles of modern corporate workers through the lenses of organizational theories. It’s important to note before we start diving into theories that we are considering knowledge-intensive industries with very limited possibilities of measuring the efficiency and productivity of individuals.

The modern corporate world in its current state is a result of societal, economic, demographical, and cultural conditions. However, as with any institution, organizations today have a certain degree of inertia when it comes to changing their culture, strategy, or internal processes. The organizational inertia is one of the most critical factors affecting the innovation capabilities of the firm. The degree of inertia is, of course, proportional to the size of the organization.

Many scholars have attempted to explain employee-employer relations in organizational settings. In purely theoretical terms, quiet quitting is an unwillingness to engage in organizational citizenship behavior. In corporate language, organizational citizenship behavior is what is meant when people say that someone goes above and beyond in their work.

Agency theory is one of the most famous economic theories explaining employee and employer relationships. It focuses on the situation where a “principal” (that is, the owner of a company or shareholders) is concerned with avoiding that “agents” (that is, subordinates, workers) engage in undesirable behavior such as, giving a lack of attention to certain aspects of a task, and so on (for example, service quality).

The fundamental assumption is that agents’ self-interest is misaligned with the principal’s objectives; therefore, the principal should adopt a number of mechanisms to align employee and employer interests. Such incentives might include profit sharing, efficiency wages, and commission. However, these mechanisms are complex as they should be aligned with the principal’s interests, tied to the agents’ performance, and often require much supervision. Moreover, having a performance contract that specifies the nature of each task and the standard to which it should be performed is often infeasible. Having such a contract would essentially eliminate the need for the worker to go above and beyond.

Looking at trends like quiet quitting in terms of agency theory means that making a principal more prosperous cannot be of interest to agents as it will not have a direct effect on their compensation, working conditions, and so on.

The non-economic solution to this problem is aligning employee and employer self-interests. Many theories do not assume the divergence of self-interests between employee and employer but list some other factors explaining the unwillingness of agents to go above and beyond. For instance, according to interactional justice theory, a variety of organizational outcomes, such as job satisfaction, organizational commitment, withdrawal, and organizational citizenship behavior depend on the perception of fairness in social interactions. For instance, the absence of clear and honest communication on the corporate level, political games, and unclear decision-making can severely affect employees’ behavior and self-interests.

One of the most valuable capabilities for every company is the ability to avoid cultural lock-in, the situation where there is no flexibility or space for innovations in internal processes, compensation schemes and ways of working. The ability to analyze both financial and non-financial contributors beyond shareholders’ interests and needs is becoming increasingly important for large organizations that have been traditionally driven by external demands and owners’ agendas. The biggest hindrance in this process is the perception of power, which historically resided on the corporate side, but with the emergence of the gig economy and VUCA conditions in the job market, power is gradually shifting toward employees.

From my perspective as a knowledge worker, a number of existential questions were triggered by the COVID-19 pandemic, which played an essential part in forming trends like quiet quitting and the Great Resignation. These include:

• “Why am I working?”
• “Do I enjoy my work?”
• “Would my absence even be noticed by the corporation?”
• “Should I sacrifice time with my family to fulfil corporate goals?”

Moreover, demand for talent far exceeds supply in knowledge-intense industries while corporations are becoming increasingly demanding on employees’ competences and skills. We can add factors such as the increasing gap in earnings between regular workers and executives and the impact of social media (for example, the definition of success, views on work and leisure, and so on).

Concerning quiet quitting, the old image of a typical corporation with a mile-long queue of workers willing to go above and beyond to earn a golden watch no longer holds true for many individuals and companies, which poses a need to rethink and investigate some of the fundamental organizational theories and assumptions.

For me as a Millennial or Generation Y employee, it is becoming more important to embrace flexibility and partnership-type employee-employer relations rather than purely command-and-control with power residing on one side.

We all have certain self-interests when it comes to working; therefore, alignment of employee-employer goals, trust and corporate justice continue to shape work-related trends worldwide. In the end, the old quote which says “Culture eats strategy for breakfast”, is even more relevant today, especially when it comes to things like quiet quitting and the Great Resignation. Even the most genius plans and strategies would not fly without dedicated, loyal and talented workers (and it is not easy to find).

This blog is part of a series on Quiet Quitting

The Meaning of Quiet Quitting by Heraldo Sales-Cavalcante

Why Gen X is quiet quitting in tech by Pascal Potvin

Leading in the Age of Quiet Quitting by Stephen Newman

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