Time-Based Stress and Procedural Justice: Can Transparency Mitigate the Effects of Algorithmic Compensation in Gig Work?

Abstract

The gig economy has led to a new management style, using algorithms to automate managerial decisions. Algorithmic management has aroused the interest of researchers, particularly regarding the prevalence of precarious working conditions and the health issues related to gig work. Despite algorithmically driven remuneration mechanisms' influence on work conditions, few studies have focused on the compensation dimension of algorithmic management. We investigate the effects of algorithmic compensation on gig workers in relation to perceptions of procedural justice and time-based stress, two important predictors of work-related health problems. Also, this study examines the moderating effect of algorithmic transparency in these relationships. Survey data were collected from 962 gig workers via a research panel. The results of hierarchical multiple regression analysis show that the degree of exposure to algorithmic compensation is positively related to time-based stress. However, contrary to our expectations, algorithmic compensation is also positively associated with procedural justice perceptions and our results indicate that this relation is enhanced at higher levels of perceived algorithmic transparency. Furthermore, transparency does not play a role in the relationship between algorithmic compensation and time-based stress. These findings suggest that perceived algorithmic transparency makes algorithmic compensation even fairer but does not appear to make it less stressful.