Thursday, February 26, 2009

Hard Work: Not Smart

“Work smarter, not harder.” I’m sure you’ve heard that new age management advice often enough to be irritated by it. But that cliché has some truth in it.

A Finnish study of British workers published in the American Journal of Epidemiology, then written up in BBC News (how international can you get?) found that just 55 hours of work a week was enough to reduce a worker’s intelligence.

Specifically, the workers who put in 55 hours a week or more scored lower on reasoning and vocabulary. The more hours they put in, the lower the scores got.

Traditional economic theory suggests that putting in extra hours of work in a week, beyond a certain point, will not produce any additional value. This new study suggests that the point of diminishing returns is lower than most people have imagined.

The people who run business startups commonly average 10 hours a day or more as they struggle to hold the new business together. And they often burn out, running out of energy and ideas after two years or so of hard work. This approach may be a bigger mistake than it appears. Instead of saying, “Well, I’ll work harder,” when problems come up, these managers may need to be more ruthless in simplifying and structuring the business so that it is more easily managed.

This line of thinking has implications for employers too. Employers sometimes think they are saving money on health benefits by having fewer employers and working them longer hours. But that conclusion is usually based on an accounting analysis that assumes workers are equally productive regardless of how many hours they work, and perhaps also that extended work hours do not increase the health care costs of workers. We can now say that neither assumption is true, and in recent years, some employers that have been taking steps to rein in overtime say they have been getting good results with that change in policy.