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Overtime vs Increasing Headcount
Organizations face two options with an increased workload: hiring more hands or making on-board employees work overtime, or working extra hours than the normal working hours. The common choice is instituting a permanent policy of overtime to optimize infrastructure costs and leverage the other benefits of overtime. The International Labor Office estimates the annual number of hours worked per person in the United States is higher than most other developed countries. The effects of overtime on productivity and morale, however, makes this a poor move, especially when the workload increase sustains for an extended period. Productivity is the measure of output, and morale refers to the confidence, enthusiasm, and discipline of the employee. Overtime directly leads to loss of productivity, and morale.
The Fair Labor Standards Act (FLSA) stipulates overtime wages at a minimum of one-and-a-half time normal wages including bonus and leave cash-outs for covered employees working in excess of 40 hours a workweek. Some states have enacted overtime laws that may offer better overtime rates or include more employees in the net. Many companies offer a higher rate of overtime wages and extend the coverage of overtime to employees outside the net of FLSA as part of their benefits plan. Such altruistic considerations prompt many employees to work overtime, but the benefits remain short term in nature.
People who work extended hours face burnout, and lose focus. They also lose their ability to concentrate and start making mistakes, directly hampering productivity. Instead, a good night’s sleep and re-starting work fresh allows for working at a much faster pace, improving output.
Working extended hours continually leaves less than sufficient time for non-work activities such as domestic chores, spending quality time with family, and more, ultimately causing a work life imbalance. Extended hours of work increases stress levels and leads to serious health disorders such as cardiovascular diseases, besides the performance issues resultant from low productivity. The net result is low morale, which causes further depression.
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Parkinson’s Law states that work expands to fill in time available for completion. This manifests the truism that people tend to work at their productive best, concentrating deeply and not wasting time on breaks or distractions when the time to complete the work is short. This explains why people usually meet tight deadlines when they remain unable to complete the same work when no such deadline exists. Overtime extends the time available to complete the work, and by applying Parkinson’s Law, all overtime does is expand the time available to complete work, which by commitment and dedication could be completed during normal work hours.
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Research substantiates the adverse effect of overtime on productivity and morale. A report published by the Center for Diseases Control and Prevention and National Institute of Occupational Safety and Health, under the U. S. Department of Health and Human Services revealed that 16 out of the 22 major studies surveyed associated overtime with poorer general health, increased injury rates, more illnesses, and increased mortality. Following are examples of some of these studies (links can be found in the reference section.)
A 1996 study by Proctor et al. report that working overtime results in loss of cognitive function and erosion in ability to prioritize and plan tasks. Extended work hours also Increase incidences of on the job accidents.
A 1998 study by Rosa et al. reports a direct relationship between longer shifts and fatigue, especially when the extended hours occur during night shifts. The study found highest fatigue levels in 12-hour night shifts.
A 2000 study by Macdonald and Bendak associates a longer workday with deterioration in grammatical reasoning and alertness.
A 2001 research by Van der Hulst and Geurts places an employee performing overtime with increased risk for somatic complaints, burnout, and work-life imbalance, all ultimately leading to loss of morale.
A 2004 Unscheduled Absence Survey by CCH Incorporated revealed a direct association with high overtimes and high absenteeism. Unscheduled absenteeism costs U.S. employers $3,600 per hour owing to loss of productivity and work held up.
Another 1998 study by Smith et al. reports that 12-hour shifts with employers having some flexibility in start times led to better psychological wellbeing and alertness levels among employees, suggesting the ill-effects of overtime may be owing to rigid schedules. Flextime may mitigate some of the ill effects of overtime.
An article by Michelle Rafter, The Yawning of a New Era, published December 2010 in Workforce Management Magazine, documents facts related to the rise of human fatigue in the workplace and illustrates the case of nurses’ work hours at Allegheny General Hospital in Pittsburgh Pennsylvania. The hospital, to cut costs had mandated compulsory overtime for nurses, but it only resulted in increased fatigue levels, and consequently more sick leaves. These sick leaves further increased demand for overtime, causing the formation of a vicious cycle. The loss of productivity and frequent absenteeism led to performance related issues, again causing loss of morale. The hospital finally ended the policy of compulsory overtime and the vicious cycle of low productivity and sick leaves owing to fatigue ended.
Although some studies do not find any association between overtime and productivity, or state that a direct association remains difficult to establish owing to the intervention of many other complex factors, the negative association remains fairly well-established.
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- Susan L. Koen. "Bare-Bones Head Count & High Workforce Fatigue Create a Downward Performance Spiral & Increased Costs." http://timedrivenperformance.com/2011/03/16/bare-bones-headcount-high-workforce-fatigue-create-a-downward-performance-spiral-increased-costs/.%20Retrieved%20June%2019, 2011.
- Circadin. “Absenteeism:The Bottom Line Killer." http://www.workforceinstitute.org/wp-content/themes/revolution/docs/Absenteeism-Bottom-Line.pdf.%20Retrieved%20June%2019, 2011.
- Thomas, Randolph H. "Effects of Scheduled Overtime on Labor Productivity." http://cmdept.unl.edu/drb/Reading/overtime2.htm.%20Retrieved%20June%2022, 2011.
Department of Health Research Studies Link:
U. S. Department of Health and Human Services: Overtime and Extended Work Shifts: Recent Findings on Illnesses, Injuries, and Health Behaviors." http://www.uscg.mil/hq/cg5/cg5211/docs/NIOSH_ShiftWorkStudy.pdf. Retrieved June 19, 2011.
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