Why managers should reject OT work
Credit to Author: REY ELBO| Date: Mon, 13 May 2019 16:17:53 +0000
LAST week, I conducted an informal survey on Facebook on the practices of organizations about mandatory overtime work. It’s not a scientific approach, but it serves the purpose for a real time, quick search on how today’s people managers are doing with one of the most important approach to profitability – cost-cutting.
I posted my one-question survey on the pages of the Philippines HR Group (PHRG) which has an active, dynamic and fast growing membership base of 134,797 members as of this writing. It was an excellent platform to discover the general sentiments of HR professionals on anything related to people management.
My question was simple and succinct: “Do you practice regular paid overtime (OT) schedule where workers are forced to work at least one hour extra every day?” The answers came in quick and easy in less than two days with 56 ‘No’ votes and 14 ‘Yes’ votes. The total number of respondents was 70 – a small fraction of PHRG’s growing population. But that’s OK.
The minority ‘Yes’ votes gave me an insight on how some managers could be so frank and honest on the things they’re doing wrong without knowing it, and yet they appear proud of it.
If you were born yesterday, I must tell you there’s no such thing as regularly mandated OT work. My dear managers, if you know what you’re doing, you should accomplish your task and that of your workers, during regular work hours. If your company is doing regularly mandated OT work, then you have a problem you don’t know or, worse, you’re ignoring.
I’ve yet to appreciate the benefits of an OT work because there’s none. The only thing where OT work matters is in case of an emergency or to meet service or production exigency. Otherwise, a regularly-mandated OT is pure and simple reflection of poor management.
There are many disadvantages of a mandated OT work. Number one on my list is its unnecessary cost implications on the part of the company, not to mention that many employees abhor it because it ruins their family and social life. Besides, not so many people care about receiving OT premium at 1.25% for ordinary days.
Let’s do a conservative estimate using 1.25%. Suppose the daily wage rate is P500, then that’s equivalent to P62.50 per hour. If a worker performs OT on ordinary days, then he must be paid P78.13 per hour. This is not much for ordinary workers. But wait until you see how much an organization is spending in actual figures multiplied by the number of workers times the number of months in a year.
The survey respondents for the yes vote were required to explain briefly why they’re doing “forced” overtime work. However, no one from the yes voters gave their reason except for Outlier X who said his company is doing a 15-minute paid OT work. Note that I was asking for at least an hour of mandatory OT work but Outlier X appears proud telling the whole world that theirs is a dynamic management strategy:
“It’s needed. We are required to clock in 15 minutes every start of shift for the endorsement meeting. That 15 minutes are counted as automatic overtime. Co-workers just need to clock in at least 10 minutes and they will be paid for 15 minutes. Lower than 10 minutes will not be counted. So the outgoing shift need not to extend and can go home right away.”
I pressed on: “Why can’t you do all the things you mentioned during regular working hours and eliminate 15-minute OT work? Or why can’t you do paper endorsement to eliminate face-to-face interaction?” Outlier X mutters a mouthful without answering the questions.
Using a conservative estimate of P500 daily wage of say, 100 workers, I calculated that his company is probably spending about P39,060 a month or P468,720 a year for the OT premium. If you’re in management, would that be enough reason for you to review it?
What’s revolting about Outlier X’s claim is that his company is paying OT premium for 15 minutes even if the worker clocks in at 10 minutes. What a generous management we got here. Or shall we say, we have stupid managers out there composed of HR, operations and accounting. But wait. Did you know that Outlier X has
responded to my survey on Facebook during office hours?
I’ve to take a brisk walk at a nearby park to suppress my irritation about Outlier X’s false bravado. After one hour, I came back to my desk as I reflect on my own question:
Why should a company, even if it’s earning a lot of money, bother itself with a ‘small’ thing like OT?
Why not? Why would you spend money, no matter how small it is for something not necessary in the first place? So, what’s the solution? Spend much on training employees on how to spot unnecessary wastes and eliminate them, like the stupid 15-minute OT policy. If you’re in top management, you can issue a decree forcing managers to reduce at least 20 percent of every department’s administrative costs.
Ninety percent of the time, you’ll be surprised to know that your managers could exceed your expectations. That’s assuming they’re not busy updating their profiles on social media.
Rey Elbo is a business consultant specializing in human resources and total quality management as a fused interest. Send feedback to elbonomics@gmail.com or via https://reyelbo.consulting
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