There's some light and some shadow in this article. I can't tell about southern europe, but most of this does not apply in germany - even the parts that are specifically about germany. There are recommendations about how a work-place should look like but they are mostly common sense [1] and not mandated by law, at least not in the IT Business. There is a law about workplace safety [2] but that's like 12 pages long and enforces very basic limits: You must have toilets, sufficient lighting, sufficient heating and the escape routes must not be blocked. If you feel like you can use your garage or your living room.
Bonus payments are no problem at all either. If you feel like paying a bonus, pay it. If you want to have a written formula, write it down in a contract - but then you need to pay it if the employee qualifies.
If your employee pretends to be sick, send him to the public health officer. If he isn't sick it's an immediate firing offense. Even verbally threatening to go on sick leave is an immediate firing offense.
Severance packages are not mandated. You can have them in a contract, but the default is no severance package. It's still somewhat harder to fire someone than in the USA since you need an actual reason to do so. "She's irresistible" won't do. [3] It's pretty common to have 3-6 month probation period in a contract where both parties can terminate the contract on short notice.
The part where he's right is extra work. The law is pretty strict here: 8 hours a day is the normal maximum, 10 hours a day for a limited time, maximum of 60 hours a week. There must be a 10 hour break between end of work and beginning on the next day. You can break those limits in emergencies, but you need a qualified reason. That sounds pretty harsh, but it's reasonable. It protects the employees on one side, but why would I want them to work more than 8 hours a day on a regular schedule when productivity drops sharp after 8, maximum 10 hours. We can do crunch time for a couple of weeks, but after that it just doesn't pay of. 12 hours a day are neither healthy for the employee nor for the startup. A team of zombies just doesn't perform. So I'm very little bothered by that law. Germany seems to be doing just fine productivity wise.
It protects the employees on one side, but why would I want them to work more than 8 hours a day on a regular schedule when productivity drops sharp after 8, maximum 10 hours.
Do you have any modern (i.e., post 1940) evidence for this? What little empirical evidence I've seen suggests 60 hours is optimal. (But what little evidence there is applies to industrial fields, and likely doesn't generalize to knowledge work.)
The usual model of the effectiveness of overtime in software is described in detail at http://www.stevemcconnell.com/rdvolot.htm . Most of the direct references are not from experiment but based on observations of effective work environments.
You linked to a claim for skepticism, but did not mention the the extensive counter-examples from the first commenter, at least as it applies to some subfields of work. The quote I find most persuasive is: "The best data on sustained intellectual activity comes from financially independent authors. While completing a novel famous authors tend to write only for 4 hr during the morning, leaving the rest of the day for rest and recuperation."
That is a strong suggestion that 4 hours of creative work is about the daily limit. Why is this not a sufficient counter-argument for a broad "60 hour is optimal" recommendation? After all, a self-supporting author has good economic inventive to create more works, but this puts a limit of 28 hours per week on creative work.
Your second link is based on the Nov. 2001 newsletter of "a national firm of Construction Consultants and Claims Specialists, assisting owners and contractors in achieving profitable and trouble-free construction projects", and not, say, a peer-reviewed journal or research organization. The newsletters most recent citation is from 1992, so a bit over 20 years old, instead of a bit over 60 that you are disdainful about.
Can you find anything more recent, and research-oriented, which provides better evidence for your "60 hours is optimal" suggestion? In your analysis, please note, as the newsletter points out, that "The fatigue resulting from a daily two-hour commute is considered similar to a daily increase of two working hours.", so you can't look at a 40 hour work-week in the City of London and assume that that's the only factor to consider, if the commute takes an hour each way. (The newsletter highlights this because in some construction jobs the crew is housed on-site, so there is no commute, which makes the direct interpretation of the chart results difficult.)
Because the overcomingbias.com references didn't include more recent, and more academic/research oriented papers, I suspect both it and you did insufficient research.
In any case, I don't think you understand the math of the evidence that you report. The contracting job numbers say that it's better to hire 1.25x people, who work 40 hours per week, than it is to hire 1x people who work 60 hours per week. Assuming the cost per hour are equal - which it often is for hourly construction work - then the first gives the company more productivity for the same cost.
The only way that 60 hours per week is optimal for the company is if the workers are paid constant rates no matter how much they work per day, or if it wasn't possible to hire 25% more workers (e.g., because of the size of the site, or number of hours available to work). But that's not good incentive to get people to work longer hours, is it.
So I don't understand how you drew your conclusion that 60 hours is optimal.
> Few studies have directly investigated the financial consequences of long working hours. For example, in a study on white-collar jobs, performance decreased by as much as 20% when 60 or more weekly hours are worked (Nevison, 1992). Data from 18 manufacturing industries in the U.S. show that a 10% increase in overtime resulted, on average, in a 2.4% decrease in productivity measured by hourly output ( Shepard and Clifton, 2000). High overtime levels can cause poor employee morale, which can affect productivity and absenteeism. For example, Circadian showed that 31% of extended hours operations that have extremely high overtime hours (25% or greater) also had poor morale, compared to only 13% of companies with low or normal overtime (Kerin, 2003). Long working hours and overtime contribute to increased worker fatigue and safety problems. For example, the average cost of workers compensation claimed per individual at extended hours facilities that reported severe fatigue problems was considerably higher ($4,037) than at facilities that report moderate ($2,240), minor ($981) or no ($276) fatigue problems (Figure 4) (Kerin, 2004).
Note that productivity is only one of the factors. Health costs, impact on family life, and accident claims are others (though the last can be included in the productivity numbers, as they seem to be for the construction numbers).
The Shepard and Clifton paper uses post-1940s data, and would be a better reference than the newsletter. I'm not paying for access to the full paper. You?
Again, don't misinterpret the 2.4% decrease from 40- to 60-hours-per-week to say that working 60 hours is better for the company than 40. If the employees are paid per hour, than it's better to hire more people than it is to have the same people work overtime. (Again, ignoring secondary effects; perhaps the factory isn't large enough for 25% more people.) Plus, the employees will have better morale, and bad morale decreases productivity.
Another, more modern review (and definitely better than a company newsletter) is "Working Long Hours:
A Review of the Evidence, Volume 1" (2003), from the Institute for Employment Studies in the UK ( http://webarchive.nationalarchives.gov.uk/+/http://www.dti.g... ). It references "Bienefeld (1972) who observed that major reductions in hours in British economic history preceded rather than followed peaks of productivity growth", though "this evidence may disputed." Still, I find nothing in there which gives strength to your "60 hours is optimal" suggestion. If anything, most of the research is aimed at determining if 35 is a more optimal number than 40.
Based on your termination of our previous exchange on the similarity of employment to a monopoly, I'm not surprised that your analysis seems weak. Your math seems wrong and your citations poor. (BTW, in that monopoly thread I've cited several economics papers which explore the model I outlined, and the developers of that model received the 2010 Nobel Prize in economics. I've also cited several papers which use the factors that you say you've never seen in economics models. This supports my belief that your analysis seems weak.)
I should have been more clear - I meant for the phrases "what little empirical evidence I've seen" and "likely doesn't generalize to knowledge work" to indicate my lack of confidence in the little data I've seen. (Not to mention the fact that my entire post was just a question, together with links one discussion of a little bit of data.)
I'll take a look at your CDC links and see if they answer my question.
Incidentally, my apologies for not responding to your reply to me - I didn't notice it on Christmas afternoon and I just logged on today. I'll take a glance at what you wrote.
Thats the problem with generalizations about Europe, there has been some progress towards harmonisation but lots of things vary hugely from country to country. For every statement you have to add "except in Belgium", "except in Germany" etc, and he mostly just added the "except in UK" ones.
There are some valid generalizations about europe. There are some mandated minimum holidays for example (4 weeks IIRC) and the tendency to have stronger employee rights. The work ethos is different as well, europeans tend to regard extreme outliers in wealth as extreme outliers, less as role models. The problem is that this article takes some assumptions that might be true for spain and uk and tries to sell them as 'europe'. I'd be interested if the majority of american investors see europe this way or if this is an outlier.
The work ethos is different as well, europeans tend to regard extreme outliers in wealth as extreme outliers, less as role models.
I think part of these stems from the fact that some of the extreme outliers in europe (in terms of wealth or political power) often inherited their wealth. Whereas the USA has the attitude that "This is America, the land of oppertunity, where an illiterate immigrant can step off the boat in ellis island and if he works hard enough, he can own a skyscraper in Manhatten". Whereas, in Europe, there are many people who inherited their wealth. There is also a much more noticable class system.
Strong employee rights comes from blue collar people who, being aware of the class system, do not believe that they will ever be mega rich, and hence fought for more rights & laws for themselves.
(Not to say either 'meme' is correct, I'm just pointing out what people think, which informs what they think.)
I disagree with you, i think it has much more to do with the concept of happiness..
In US where the capitalism is too strong, people tendo to believe that wealthy = happiness
Despite not been a european, but a brazilian, i think europeans understand that happiness its a more tricky and uneasy concept to conquer.. and is made of much more values.. even the simplest ones..
They are far more sophisticated in human relationships and the concept of happiness..
but lets not generalize..i know a lot of sophisticated americans.. but is much harder to get there.. cause it needs one to get free from its own dominating culture..
In Brazil we have similar regulations, and labor parties are stronger and popular..
We try to work and be happy with our work, and make a living, but also we want time to have fun, to be with the family.. even if you have to earn less money..
those are different perspectives from the life quality we all want and spect.. different equations, different answers..
who are right? i think it always depends.. what is good for you may not be good for me.. and this means it cannot be enforced by the stronger part of the relationship..
freedom is based on choice.. on the capacity and possibility of choosing.. if someone stronger, be it a enterpreteneur or a country, enforce someone to take a path, that is just limiting individual freedom.. and that is a real threat..
People are different, and have different life values.. we should protect that.. not enforce the "everyone should fit into this box, please!" behavior
I tend to like more the way europeans live life than our brothers from north.. because its everything about happiness not about (just) money, and i think they(europeans) are more conscious about it.
Life should be driven by passion, making a living, money, wealthy.. should be just a consequence of that.. or not :)
"The work ethos is different as well, europeans tend to regard extreme outliers in wealth as extreme outliers, less as role models.
What does that have to do with work ethos? Do you think there is a strong correlation between working hard and the dream of becoming extremely wealthy? Of the four options, (born poor/rich, working hard/slacking) I agree that (born poor & slacking) is highly unlikely to make you wealthy, but that is about it.
The exaggerated version of my view on workers rights in Europe/the EU (1), compared to the US, is that, in Europe, the class struggle between the Proletariat and the Bourgeoisie (http://en.wikipedia.org/wiki/Proletariat#Usage_in_Marxist_th...) has led to a distribution of power that gives more power to the proletariat.
That is why, for example, consumer laws are stronger in the EU, and that workers have more rights, enforced by the EU, more or less acting for all workers.
In the USA, "workers" and "owners" are more each others enemies than collaborators for a common cause (for an extreme example, see http://www.motherjones.com/politics/2012/02/mac-mcclelland-f...), and workers work hard for two reasons: fear of their employers and the _dream_ of becoming extremely wealthy.
In the EU, on the other hand, bosses respect their employees and give them room for self-development. That makes them work hard (did I say this was the exaggerated version?).
I also thinks similar logic applies to medical insurance and the prison systems in the EU and the USA, but that may be a bit far sought.
Also, some loose remarks on things stated in the article:
- AFAIK, you can start your startup in a garage all you want. Rules about workplace conditions only apply to employees. As long as you don't have employees, you can work wherever and however you want.
- Similarly, you can work as long as you want for your own company.
- Many countries have limited liability companies (http://en.wikipedia.org/wiki/Limited_liability_company) that give you easy protection against losing your house in case your company goes bankrupt. The difficulty of starting one varies by country (Google showed me ads claiming a price of about €400–, or about €3000,– if you want one within four hours for Dutch ones)
- When I learned about it earlier this year, I was surprised that Germans have to have a doctor's approval to report sick. That sounds like bureaucratic waste to me. In the Netherlands, you just report sick.
(1) I know the two are different, but the EU 'exports' its rules outside the EU, too. For example, Switzerland is not in the EU, but it follows many EU directives because it wants to trade easily with its neighbors and even pays towards the EU budget (http://en.wikipedia.org/wiki/Switzerland–European_Union_rela...); Norway is not in the EU, but it is in the Schengen zone of 'no passport check on travel'. To get there, it has to comply with several EU rules (http://en.wikipedia.org/wiki/Norway–European_Union_relations)
On the other hand, there are so many degrees of 'in the EU' that mere mortals cannot keep track of them (http://en.wikipedia.org/wiki/European_Union#Member_states: 27 members, one almost member, 5 candidates, 4 potential candidates, one potential candidate which is not recognized as an independent country by all, some EFTA countries not in the EU, micro states that have the euro, but are not in the EU, overseas areas of European countries (http://en.wikipedia.org/wiki/Special_member_state_territorie...). Nevertheless, I'll treat "Europe" and "the EU" as synonyms. That should do for this rant.
>> "The work ethos is different as well, europeans tend to regard extreme outliers in wealth as extreme outliers, less as role models.
> What does that have to do with work ethos? Do you think there is a strong correlation between working hard and the dream of becoming extremely wealthy? Of the four options, (born poor/rich, working hard/slacking) I agree that (born poor & slacking) is highly unlikely to make you wealthy, but that is about it.
I'm sorry I was unclear. I meant that as a list of items that tend to be different not that the work ethos is different in the issue of rich people as role models.
Two minor nitpick: Studies show that of the 4 options (born poor/rich, working hard/slacking) two are bad: Born poor is highly unlikely to make you wealthy. Slacking will make things worse, but in general the equation "born (modestly) rich -> die rich" and "born poor -> die poor" holds true. [1]
Calling in sick in Germany is a bit more difficult: By default you only need a doctors approval after the third day. The employer can demand a medical certificate on day one if they choose to. Small businesses get most of the wage paid by the health insurance for the period that they have the doctors certificate, so they tend to be stricter about it.
And certainly in the Uk severance packages are not a Q for start ups as.
A The statutory redundancy payment only applies if you have worked for two years (which most failed start-up wont have)
B If a company goes bust badly the state pays the redundancy - some multinationals have abused this by artificially making a subsidiary bankrupt the 100's redundant workers redundancy where paid by the Government when the parent company got of of Scot free.
And don't forget get that IT workers are considered professionals and so don't have the full protection of the working time directive.
Bonus payments are no problem at all either. If you feel like paying a bonus, pay it. If you want to have a written formula, write it down in a contract - but then you need to pay it if the employee qualifies.
If your employee pretends to be sick, send him to the public health officer. If he isn't sick it's an immediate firing offense. Even verbally threatening to go on sick leave is an immediate firing offense.
Severance packages are not mandated. You can have them in a contract, but the default is no severance package. It's still somewhat harder to fire someone than in the USA since you need an actual reason to do so. "She's irresistible" won't do. [3] It's pretty common to have 3-6 month probation period in a contract where both parties can terminate the contract on short notice.
The part where he's right is extra work. The law is pretty strict here: 8 hours a day is the normal maximum, 10 hours a day for a limited time, maximum of 60 hours a week. There must be a 10 hour break between end of work and beginning on the next day. You can break those limits in emergencies, but you need a qualified reason. That sounds pretty harsh, but it's reasonable. It protects the employees on one side, but why would I want them to work more than 8 hours a day on a regular schedule when productivity drops sharp after 8, maximum 10 hours. We can do crunch time for a couple of weeks, but after that it just doesn't pay of. 12 hours a day are neither healthy for the employee nor for the startup. A team of zombies just doesn't perform. So I'm very little bothered by that law. Germany seems to be doing just fine productivity wise.
[1] The monitor should be placed parallel to the window to reduce reflections, the chair and the table must be adjustable in height, ... [2] http://www.gesetze-im-internet.de/bundesrecht/arbst_ttv_2004... [3] http://edition.cnn.com/2012/12/22/us/iowa-irresistible-worke...