Workplace Automation and Employee Treatment

We study the effects of workplace automation on employee treatment. We show that a firm’s likelihood of workplace automation reduces (1) employee stock option grants, (2) corporate social responsibility (CSR) rating, and (3) employee satisfaction. The reduction of stock option grants is greater for rank-and-file employees than top executives. The CSR rating is particularly affected by reduction in diversity strength and rise of employee relations concern. Our results are not driven by heavy penetration of robots in manufacturing industry. These findings suggest that any benefits to stakeholders from automation comes as the direct expense of employee treatment