Time is Not Money. Money is Money.

Manage your employees to results, not to clocks.

Recently The Economist published an article highlighting the work of John Pencavel and his study of the relationships between working hours and productivity.  This most recent article was a bit of an “I told you so” from the consistently snarky, but always clever, staff at The Economist (following up an article they put out last year).

For those who would prefer the executive summary of Pencavel’s 57 page discussion paper (don’t worry, about half of the pages are graphs and references and it’s well-written), I believe the basic concept can be grasped in this line:

…employees at work for a long time may experience fatigue or stress that not only reduces his or her productivity but also increases the probability of errors, accidents, and sickness that impose costs on the employer.

In addition to finding a significant reduction in marginal output as hours worked per day/week increased, Pencavel also notes that there can be a decrease in operational stability if one is relying on the same employees for an excessive period of time.

This is the same concept the Department of Transportation bases their Hours of Service regulations on, because when you're fatigued and driving an 80,000 lb. machine down the highway, really bad things tend to happen.

Stress Reduction and Employee Output

Anyone who has seen Shawn Achor’s Ted Talk (or read his books) can tell you that there is a “Happiness Advantage” that people who reduce their stress and focus on positives have over neutral or stressed workers.

How much more productive are happy workers, according to Shawn:

• 31% More Productive
• 37% Better at Sales
• 19% More Accurate (study on doctors)
• 300% More Creative

Moving along with the theme of Positive Psychology, Dan Gilbert would suggest that two of the most important factors of perception and feeling are beginnings and endings.  For instance, if you end your employees’ work-week by requiring them to work until 5:00pm precisely on Friday, and then berate them if they arrive after 8:00am Monday, you’re setting up a nice week of disgruntled, sub-par work in which both you, and your employees, are frustrated.

Output is What Matters, Not KPI or Clocks

I’ve never heard a CEO say “all of our employees are on time every day” during an earnings call.  Because nobody gives a shit.

I can almost hear the straw man as I'm writing this, espousing the flaws in my argument about time management: “sure, it’d be nice if we could show up whenever we wanted, but what about call centers or appointment times?  What about the cost of showing up late for meetings or missing sales because you weren’t available?”

I assure you that a relaxed attitude towards punctuality will not spiral into a workplace where nothing gets done.  Again, we should manage to results and the issues mentioned above are negative.  If an employee is not hitting their sales numbers, is inconsiderate of other people’s time, or failing to meet business needs they should be coached or eventually set free to go work somewhere else. 

Moderation in Pursuit of Output

If you’ve hired the right people, they care about getting the job done.  They may be late on occasion or take a long lunch to recharge, but their work will improve because of it.  A reasonable expectation of the employee that leaves at 4:30 on Friday is that they’re occasionally checking their email on Saturday/Sunday to make sure nothing was missed.

Having wireless access to information and communication tools should not be a catalyst for more work hours, but rather a medium to reduce the stress of being glued to our desks from 8:00-5:00.  We should work (diligently and enthusiastically) as needed.  And be judged on our output, not the marks on our time-card. 

One final quote, stolen from The Economist's original article on this subject last year. Adam Smith regarding time management:

[T]he man who works so moderately as to be able to work constantly, not only preserves his health the longest, but in the course of the year, executes the greatest quantity of works.

I’ll probably shut down early today… but if anyone needs me, my iPhone will be in my pocket and I always respond to emails on evenings and weekends.