Proper Planning as a Measure Against Overtime Problems

By

Ms. Meral TOPRAK

Mr. Serdar TAN

Overtime Itself Is A Problem

The major concern of a Labor Law is to regulate work hours and payments.

Those are the main conflict areas.

The reason is that labor is still considered as a mere production ingredient, instead of the main productive element of competition.

Thus in legislation, overtime is limited and discouraged.

Only the Employees Improve Productivity

Because Losses occur at finite details.

So Employee is expected to work intellectually.

In contracts this issue is defined as “liability and affection”.

However the measure for payments are hours.

Hence hourly payments are not the exact equivalent of the time and effort.

Compensation is done by premiums and benefits.

Unsolved Planning Problems.

Thus companies exploit the overtime potential, overlooking the consequences. The employees with the economic need give up their humanistic needs. Therefore legislation try to impose the best, while limiting the work time of labor, allow a certain overtime flexibility. It is only to compensate for the economic hinders.

Turkish LegislationOvertime, is the worked hours over 45 hour weekIf less hours is contracted, the exceedeing work up to 45 hours are defined as excessive time.Overtime pay is calculated as the average of total hourly payments raised by ½. This raise is ¼ for excessive time.Upon demand, the overtime and excessive time may be returned to employee as raised free time. Scheduled overtime may not exceed 270 hours. Daily worked hours shall not exeed 11 hours while meal and recuperative breaks in between.

Overtime Is Prohibited for

Work-Places with poor health conditions (where law does not permit extended work hours).Jobs requiring night work (daytime work may be performed on nightshifts).Underground or submerged works (eg: mines, cable works, sanitary and tunnel excavations),Child labor below 18 years of age.Workers with unsuitable health conditions (even its their free will to work overtime), Pregnant and newly delivered women labor,Part time labor.

Legislation in Turkey Is Parallel With Other Countries

The elongated working hours are considered to be against human rights and employees are protected.

This shows that the law does not consider extended work hours as a right for both employee and employer.

Problems Associated With Overtime

In spite of the legal discouragement, the practice of scheduled overtime is widespread.Scheduling overtime is sometimes ordered by owners or managers in an effort to accelerate the production, complete an increased order, or compensate for shortages of skilled workers.Overtime sometimes done because it is considered less costly than hiring new employees or to form an additional shift.

No Advantages

The expected advantages of scheduled overtime diminishes with the prolonged working times. Simple arithmetic shows that overtime pay for time and one-half already makes overtime work much more expensive. often-overlooked disadvantages of overtime, may be more significant than premium pay. Premiums affects only overtime hours, but continued overtime hours affects costs of all hours.

Overtime and Productivity Have Reverse Ratio

In the first few weeks total output per employee is greater but not as the additional work hours. After two months the total weekly output is likely to be equal of that attained in a regular hour week. Productivity will continue to diminish as the overtime schedule continues. After another two months the total output will be even less than if no overtime had been worked at all.

Reasons for Declining Productivity

Unbroken Work Pace.

Increased Absenteeism.

High Accident Rates.

Increase In Fatigue.

Deteriorated Motivation.

High Turnover and New Employee.

Supervision Problems.

Unbroken Work Pace

Industrial engineers can show that there is a certain pace in the workplace. The interdependence of workers with others on the same job makes it impossible for an individual to overcome the problem of “running out of work”. Hence when the irregular hours of work increase, there is a tendency to adjust to the new pace to accomplish about the same amount of work.

Increased Absenteeism

Absenteeism is the effects of cumulative fatigue, desires of free time, and the time needed for personal business, combined with economic necessity to work all available hours. Absenteeism of even a few employees seriously disrupts programmed operations and reduces total productivity. Statistics show that “the longer the hours, the more schedule work time loss through absenteeism in extended hours of work”

High Accident Rates

Accidents are the combined results of negligence, under training, fatigue and disinterest, which results in loss of focus on job. As the work hours elongate for employees, fatigue and negligence increase, for the extra labor hired for overtime under training and disinterest is inevitable. On either case, overtime periods are fertile grounds for accidents. “injuries also increase as hours increased, not only in absolute numbers, but also in rate of incidence.”

Increase In Fatigue

Fatique is caused by lack of recuperative time even when the work is no tiring. Physical fatigue build up from excessive hours in jobs where physical effort is the main requirement.Also in machine-paced work, sustained mental alertness is needed, causing mental fatique. “For above 8 hours per day, it usually took 3 hours to produce 2 hours worth output when work is light, and about 2 hours to produce 1 hour worth of output when the work is heavy.”

Deteriorated Motivation

Overtime causes deterioration in morale and attitudes leading to loss of motivation. Deteriorated motivation increases friction, grievances, and jurisdictional disputes. In addition, expensive overtime can result in “Time is more important than cost, so why worry about efficiency?” attitude. Hence the employer and customer will result in lowered productivity and lowered output.

High Turnover of Employee

Frequent turnover of workers is expensive and disruptive. Regardless of the skill and experience of the new workers, a considerable amount of time is needed for training and orientation to the specific needs of the job they will be doing and how it integrates with the work being done by others. As work hours lengthen, the turnover increase because of fatigue, poor motivation, and lack of interest in overtime pay.

Supervision Problems

Pressures resulting from extended overtime cause supervisors to make misjudgments and to become irrational thus adversely effecting the job itself. Loss of a key supervisor in a job can have highly detrimental effects. Obviously, not having experienced supervisors during all overtime hours worked can have serious consequences.Such losses can be expected on a job with prolonged overtime due to illness or resignations.

Proper Planning Versus Overtime

The studies indicate that the decrease in output with the higher wage cost, average value added per wage paid after several weeks of overtime drops to less than 75 % for five 10 hour days, less than 60 % for six 10 hours days, and less than 40 % for seven 12 hour days.

The magnitude of the productivity loss associated with overtime justifies that a proper planning is the only solution.

Abandonment of Overtime Is the Only Effective Remedy

Studies conducted by; The Bureau of Labor Statistics, U.S. Department of Labor, Proctor and Gamble Company, Business Roundtable, National Electrical Contractors Association, Mechanical Contractors Association of America, show that overtime has a strong negative effect on productivity, which increases in magnitude proportional to the amount and duration of overtime. The BLS study shows a dramatic gain in productivity upon overtime is discontinued. The planning practice has to be improved to minimize the need for overtime.

Importance of Planning

Plans are the routes that keep any organization together towards an aim. However, nobody can predict the future, therefore all plans are subject to deviation. The causes of those deviations are the main learning opportunities. So it is well said, “the plans are nothing but planning is everything”. Thus a continuous planning and revising cycles awaits any organization.

Planning Deficiencies

Whenever the plan don’t come out, planning takes the blame. However it is not the planning but the improper planning that cause unexpected overtime. Planning deficiencies attributed to cases from the common Turkish industrial practice. Their names and other relevant information are kept confidential due to the requirements of current consultancy practice.

No Plan

In many companies no central planning activity is observed and the work is managed by approving the proposals from subordinates. The reasons for not planning are multifold. It ranges from personal preferences to ignorance. Here, overtime, and downtime becomes inevitable due to the lack of the central coordination. While shortsighted activities and downtime fill the production period, companies find themselves in excessive overtime need at the end of the term.

Case

A textile confection company oversold its capacity and the production period filled with confusion. Foremen tried to organize the schedule and workers only waited, until it was halfway to the deadline so everybody was expected to work overtime. Premiums couldn’t improve the work pace so some orders had to be turned down and cost conscious operation was neglected. A severe damage occurred for the fiscal position and reputation of the company.

Urgent Issues

When the situations within or outside the company change, plans are influenced and nobody knows what to do.

Therefore so called “crisis conditions” occur.

Instead of revising the plans, they are overridden. In turn much of the work accomplished has to be redone again, raising the need of overtime.

Case

In a well-known company the ever-changing orders are transferred directly to the workshop with “urgent” labeled forms. Employees in production lines deal with the urgent and regular job orders simultaneously and confusion is unavoidable thus the same order is worked twice. The extra time spared for redoing the same order together with the unscheduled changes almost always lead to overtime.

New Management

The new managers try to find undiscovered ways to success. So more or less every new manager tend to change the way things were. Even the most conservative leaders may not find enough data to carry on from the point onwards when they take over. This problem in companies where the manager turnover is high violates the stability; doing and redoing work over and over again increases overtime.

Case

A new general manager was appointed to a companyHowever the former manager felt bitter, and kept some of the vital documents at his possession. This not only caused the new manager and his staff to work overtime to rebuild the archive, the employees were faced with severe downtime periods. But in the days followed most departments had to makeup for, inevitably by more overtime.

Long-term Syndrome

People tend to regard long term as “to be” activities, and they don’t associate them with the present activities.

However the problems that companies face for the moment arouse from not preparing for them in the past.

When the time comes, only solution for the unplanned activities would be redoing things thus increasing the overtime.

Case

Whenever a vision is set, people take the idea as a nice dream and not associate them with solid measures. In a company where the long-term plan clearly indicated that measures had to be taken to coop with the improving demand. However due to disbelief, the company hesitated and faced with capacity problems, They were solved with uncalculated investments and excessive overtime, causing increase in costs.

Unrealistic Plan

Any plan is a vector showing the present situation, a time interval, and the target. Thus to plan any work, time study is needed to determine the time standards of various activities. However in some cases no time standards are available or they are poorly defined. Because of poor standards or sometimes even deliberately the targets are kept higher. So overtime work becomes inevitable.

Case

In a planning session for a company, the owner always wanted to set the limits higher because it was his preference that the target has to be set higher than achievable. His motive was obvious that he did not believe in planning and would not trust his employees. So the vision remained in an exaggerated level and no development was observed. However the owner had already made certain reservations, which were fulfilled by overtime.

Lack of Measurement

Sometimes the plans are not followed up because of the difficulty to measure the progress or the targets are not set in measurable units. If the follow up is neglected, the plan is not worth at all, as all the plans are subject to revision. So measurement is the vital element in any plan. If progress isn’t measured things deviate from their course until it is realized that to put everything on course again extra work is needed most of it being overtime.

Case

In a law office, no measurable objectives could be forwarded for a medium term plan. Thus the plans were prepared on vague ideas. In due time the actions were chaotic and while some of the cases had to be left unattended, some were over cared. Employees were trying to keep pace with the attorneys, so everybody was working overtime. In spite of the efforts they were not making money, so the office had to be closed down.

Not Planning the Resources

In most plans, the resources are inadequately defined or neglected. This may be due to simple negligence or ignorance, however the organizational culture that lays underneath shows that it is more than that. Fiscal issues are frequently left to superiors in most organizations and it turns out that resources are fiscal. Manpower planning is a part of resources and by not planning the manpower, overtime and downtime becomes inevitable.

Case

In a company dealing with farm products the cultural infrastructure was not ready for authority deployment. All release-approval for the fiscal resources were to be sent to board. Thus the plan was prepared without resources and severe deviations and distrust were observed. This attitude ended up in irrational operation. To makeup for the loss, people had to work long hours of overtime.

Forgotten Plan

Mostly the plan is prepared, filed but not revised and even not tended to and forgotten.

The company has a plan but only in the files.

No action is taken and no revisions are made.

It is practically forgotten until the next planning session.

So the plan is a complete failure no matter how delicately it is prepared.

Case

In an integrated textile factory where overtime and downtime was observed simultaneously at an escalated scale. They had a complex and detailed planning system. Plans were prepared, scheduled and distributed. However departments were not complying. The schedules were simply filed and forgotten. To work and redo the work again was usual procedure and allways ended up in overtime.

Broken Plan

Underestimating the planning period tends to lead some managers not to spare their time to coordinate the plan.

But instead let each department make its own plan and then just bind them within a bigger file.

So the implementation period is clustered with coordination and reworking problems and inevitably increasing overtime.

Case

A company prepares yearly plans and distributes them throughout the company. Every department prepared its own activities and transferred it to the planning office where they were filed. Since there were no consolidation sessions, the interrelations were not established. Departments were faced with resistance from their colloquies. Things got worse ending up in overtime.

Secret Plan

Sometimes the plans are not prepared simple enough to communicate them to employees. Centrally developed plans are regarded as classified documents and their circulation is kept restricted or even confidential. People implementing the plans don’t know what to do or make out completely diverse meaning out of the plan. So the plan diversifies from its intended aim, bringing the need of overtime.

Case

Confidentiality in competition could be understood, however not to the extent to block the communication of the planned activities. A company, contracting for Air Force, faces with the disturbances and conflictions. High turnover of the engineers proves that the overstated policy of secrecy is an illusion. Workers did not improve pace and productivity. The overtime work is considered as a part of the business.

Plan As Weapon

Some employers may use the plans as a threat and/or in return employees may use them for defense.

This aspect of deploying plans is totally distracting and can only result in losses for the company.

Time loss is the most important one, which will end up in more overtime.

Case

In order to fire an employee, a continued performance deficiency must be observed and documented. A multinational company builds an assessment system to evaluate the employee performance. With improper work standards, personnel assessment can only be employed to exploit them. Such motive lead to total distrust and ultimately to performance loss, which ended up with high turnover and more overtime.

Planning the Others

The main pitfall of a centrally prepared plan is that the staff members prepare plans for those who will implement.

Mostly the vital parameters are unknown.

Therefore people only have to work overtime to fulfill the plans.

Case

A government owned machine works with 1.500 personnel, practices planning activities, however, production is never on time.

Upon thoroughly questioning, it is found out that supervisors exploit the overtime pay as incentive and/or penalty on employees.

Thus almost no schedule was ever on time during the regular work hours so that some work is always left for overtime.

External Deviations

Unpredicted fluctuations in customer demands discourage company to prepare plans. However a flexible plan may be a solution to the losses from such deviations. Losses occur because orders improve and because they are withdrawn. If orders are improving within the same optional time period, capacity limits are forced and employees are forced to work overtime.

Case

A textile company claim that they are suffering capacity shortages. The company is facing rapid changes in demand. So in order to stay in business, weaving mills is frequently reemployed by different orders canceling the previous ones. The unexpected changes in production slow down the production and company can only force employees overtime to keep up with delivery schedules.

Conclusions

Elongated work hours, particularly scheduled overtime is considered against human rights, it also has an adverse effect on productivity. Economic need leads employees accept the trivial overtime wage increase, while employers, acting intuitively, overlook the productivity decline. Governments pass laws in a social consensus. It is ignorance, if not social crime, to try to find a pitfall among the legislation to impose overtime.

In Turkish Industry

Many GO and NGO are running serious efforts to convert the issue from a chronic confrontation into a case of a technical problem. Hence NPC, a quasi-governmental body, in cooperation with District Industry and Trade Chambers, stress the major losses related with overtime. The fact that by the end of this year 10 major districts will be covered, would show the size of the joint effort.