How does job programmability affect contracts in an organization?

Job programmability refers to the extent to which a job's tasks can be standardized or automated, leading to predictable behaviors and outcomes. When tasks are highly programmable, it becomes easier for organizations to define specific behaviors, outcomes, and performance metrics, which affects the nature of contracts used.

In environments where job tasks are predictable and standardizable, organizations tend to favor contracts that clearly outline expected results and performance metrics rather than focusing on controlling employee behavior. This shift happens because standardized tasks reduce the variability in employee performance, making it unnecessary to emphasize behavior in contracts. Instead, the organization can focus on ensuring that output meets defined standards, leading to performance-based contracts that rely on measurable outcomes rather than on how employees achieve those outcomes.

Contracts that emphasize results rather than behavior can streamline performance management processes, reduce monitoring costs, and enhance alignment between employee objectives and organizational goals. This transformation towards performance-oriented contracts reflects an organizational preference for assessing results over studying individual behaviors in highly predictable roles. Hence, when job programmability is high, behavior-oriented contracts become less likely, as the focus shifts towards measurable performance expectations.