Four Day Work Week (USA)

Are We Entering an Era of European Management Leadership?

In recent weeks, I have sat in on several meetings with heads of major European companies in which questions about American leadership have been raised. What's new, at least in my experience, is that the questions aren't confined to political leadership; those are perennial favorites among our European counterparts. Instead, the questions deal with issues of business leadership. They prompt the question of whether the highly-touted American style of management of the 90s is giving way to a new and different European style, just as Americans replaced Japanese management style as the sine qua non among the world's managers just a little more than a decade ago. In a word, the Europeans are acting as if they know something we in the U.S. don't.

What is it they claim to know and practice? Much of it is described in a new book by Will Hutton, titled The World We're In (Little, Brown, 2002), from which excerpts (emailed to me by a U.K. manager) were published in England's Guardian newspaper last month.

First, work less but work smarter. It's well known that the official workweek has been shortened to thirty-five hours. What has happened? Take France, for example. French productivity is up; some would claim it is now higher than the U.S., just as is productivity in The Netherlands, Belgium, and the former West Germany. For example, Volkswagen's market share is climbing even though its highly unionized, highly paid work force puts in an average workweek of 28.8 hours.

To this we could add a second and related practice: Balance work and personal life. Many would claim that the quality of life (bolstered even by traditional measures of standard of living) in Europe is much higher than in the U.S.

Third, to paraphrase Hutton, divert money that would otherwise be paid for management mega-salaries and mega-incentives to investments in technology. Of course, tax laws generally discourage the former in Europe anyway. But they seem to be providing the fuel to help Europeans work smarter.

Fourth, rely more heavily on operational improvements and the contributions of employees rather than mergers and acquisitions to build value. This philosophy seems to be gaining some credence in the U.S. as well, with recent research on the high proportion of U.S. merger and acquisition activity that has actually destroyed value.

Some of Hutton's examples, such as the ascendancy of Airbus vs. Boeing, will rekindle the controversy about the importance of state subsidies to each. But his arguments raise a number of useful questions. Do the Europeans have it right? In the long run, will their management philosophy produce superior results? Combining all this with what is now the world's second currency, the Euro, is the baton being passed from American to European management?

URL = http://www.bettermanagement.com/Library/Library.aspx?LibraryID=3926

 

When I was a manager (many years ago) of 60 people, I did the goal oriented approach. Within the group, the prodoctivity went up - but a few people got very upset, because they were slackers.

Out side the department there was a major problem. Other groups got upset and complained to my boss. So we had to scrap the idea. Every two to three years companies have been laying off at the rate of 10% for the last 15 or more years. Yet the companies tun fine.

When I was the manager, I was told my my boss to keep a rolling list of people I can fire if I get the order. Out of the 60 people, I could have easily fired 15 and still got the job done if they would have let me do it my way - that is "work smart" and keeping the workers happy.

 

A paper on this topic.

I published a paper on this topic last year. Here is an extremely condensed abstract, re-edited and de-footnoted for a less academic press.
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With the proliferation of knowledge-oriented work in the twilight of the Industrial Era, employers began to notice that unlike musclepower, brainpower cannot be pushed to extremes without a disastrous dropoff in both productivity and accuracy. The more enlightened among them quickly acknowledged that it was in their own interest to give their workers more time off. Civil service, always a citadel of knowledge work, led the way toward shorter work weeks. At the time of the American Revolution, most laborers worked 72 hours per week. In 1840, federal employees were granted a 60-hour week. A 48-hour week became standard for all workers in the early twentieth century. The 40-hour week debuted in 1926 and became standard after World War II.

However, this trend then came to an abrupt end. Vice President Richard Nixon’s confident and unchallenged 1956 campaign promise that Americans would soon be working a four-day, 32-hour week never came true. Ironically, during his presidency in the 1970s, he saw the average work week grow to 44 hours. It is now 47 hours, virtually the same as at the turn of the previous century. [All statistics dated 2000.]

Many factors have been cited to explain this, including the union movement’s loss of influence, competition with the three- and four-digit annual incomes of workers in the Third World, and the impotence of the Fair Labor Standards Act as inflation pushed salaries above its threshold of authority and janitors were retitled “sanitation engineers.” More recently and less widely recognized, the dawn of the Computer Age, one of the workplace’s most disruptive developments, marked by business’s wary and arguably inept adaptation to it, is a major cause of the reversal of the work week’s shrinkage. Workers in the huge IT sector and a steadily increasing number of others whose jobs center on the ubiquitous workstation must now be skilled at software development, data entry, hardware and software configuration and support, troubleshooting, data administration, and communications management. While learning these new skills, they are also performing the clerical and administrative tasks dumped on them by an organizational pyramid that has been flattened by the so-called miracles of telecommunication and office automation.

The working class, once feared for battling entire industries over two percent raises and extra holidays, has been strangely acquiescent to this loss of nearly one whole day per week. Although it is often assumed that workers have become team players and consider themselves allies of their managers rather than adversaries, studies reveal far less noble motives for putting in extra hours.

Greed: Hope that management will notice the extra effort and reward it, perhaps with improved job security.
Guilt: Personal atonement for past indiscretions through sacrifice.
Conformity: Social anxiety over not fitting in with one’s coworkers.
Fear: Disloyalty for going home earlier than the boss.

A sociologist’s study of working parents discovered a fifth and even darker reason: some people deliberately stay at work to escape the responsibility of raising their families.

Yet knowledge workers cannot change the biological fact that they are no more capable of maintaining heroic levels of performance indefinitely than their forerunners. The result is a vicious circle of products with high defect rates delivered by stressed-out workers: a net decrease in productivity that guarantees an ever-increasing demand for overtime.

The ravages of an overtime-driven economy are not limited to the economic sector. America’s social problems are often blamed on popular culture, such as television, and government programs, such as welfare. But these causes are now overshadowed by workplace factors, including overwork and the drop in true wages manifested by unpaid overtime. The oft-lamented deterioration of the family unit certainly owes much to the stress of job burnout and the chronic absence of adults from the home. The portion of the population working 50 hours or more has increased by 25 percent since 1980. Employers once complained that their employees’ work suffered because they brought domestic problems to the office, but according to a recent survey, job-to-home problem spillover is now far more prevalent.

An important second-order effect of the expanding work week is the distortion of consumer markets that masks the true dimensions of U.S. workers’ prosperity. Statistics tell families with two wage earners that they constitute the middle class, and the media provide alluring guides to a middle class life. Yet the time pressure of excessive overtime, unmitigated by overtime pay, thwarts attempts to live this life. The long hours of child care that mirror the long hours in the office take a huge bite out of a family’s income. A completely new category of necessities forced on harried breadwinners, such as extra cars and a steady diet of convenience food, takes another. If the family has any disposable income left, they are urged to compress their leisure schedule in lockstep with their work schedule, taking brief, expensive “power vacations,” the salutary effect of which on their emotional health has not been demonstrated. A 1998 poll found that nearly half of the American population believes there is too much emphasis on work in our country, up from just over one-fourth in 1986.

But there is hope.

In April 2001, a three-day selling spree caused a 20-percent drop in the stock price of Cerner Corp. of Kansas City, Missouri, a health care software development firm. The cause was a memo from the CEO that was leaked and posted on the Internet, stating that Cerner’s employees had no right to expect a 40-hour work week and establishing a new schedule of approximately 54 hours. Market analysts saw this decimation of the company’s net worth as evidence that twenty-first century investors have no faith in nineteenth century management practices.

In contrast, an Indiana plastics company (a knowledge-intensive high technology industry) slashed its week to 30 hours in 1997. It soon measured a 72-percent decrease in customer returns as well as a 79-percent drop in the internal cost of parts needing rework. In other words, a 25-percent reduction in working hours boosted quality so high that productivity actually increased. In addition, the company began receiving hundreds of applications from well-qualified candidates for jobs that once remained vacant for months.

It is too soon to tell whether these recent developments signal an end to the aberrant work schedules of the past few decades. But we can be hopeful that the cubicles whose walls are adorned with placards bearing the slogan, “Work Smarter, Not Harder,” may one day not be occupied by employees working during evenings and on weekends for nothing more than free pizza.