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Pr oper Pla nning a s a

Me asu r e Ag ain st
Ov er time Pr oble ms

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 Legislation
Overtime, is the worked hours over 45 hour week
If 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.
Un broken Work Pa ce

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.
Increase d Ab se nteeism

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 Ac cident Ra tes

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 I n F atig ue

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.”
Dete rio rated Motiva tio n

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 Turnove r of
Emp lo ye e
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.
Su pervi sio n Pr oble ms

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.
Pr oper Pla nnin g Ve rsu s
Ove rtim e
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.
Pla nnin g De fic iencie s

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 Pla n

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.
Ur gent I ssues

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 Ma nagement

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


company
However 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-t erm Syn drome

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.
Unreali st ic Pl an

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 Me asu re ment

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 Plannin g the
Re sources
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.
Forg otte n Pla n

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.
Br oken Pla n

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.
Se cret Pla n

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.
Pla n As We apon

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.
Pla nnin g t he Ot hers

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.
Ex tern al De via tio ns

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.
Co nclusio ns

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.