Overtime happens. There are times in the corporate cycles of things when the business is being pressed, either by a bad economy, stiff competition, or by high demand (good times can be just as tough as bad times, if not tougher). This can bring the need for overtime, which is generally a great way to get more out of your employees for next to nothing. That is, the cost of hiring someone new is always far greater than the cost of getting your existing employees to put in extra hours, so maximizing overtime is a generally good thing for you. How can you avoid paying a bunch of money for it, though?
Overtime cost can be controlled. Make up confusing rules around overtime. Set overtime compensation to start after significant overtime has already been accrued, such as “overtime compensation will begin after ten hours of voluntary overtime have been worked.” That way, before anyone gets paid for their overtime, they will have already exceeded 10% overtime for which you won’t have to pay them. Few, and especially those with families, will be able to exceed 50 hours on any regular basis, and you can always challenge the supervisors of those who do and ask why they can’t manage the work better.
Authorize overtime only for emergencies, and only when preapproved. Since it is, by definition, almost impossible to predict emergencies, people will be generally unable to predict overtime requirements in advance, thereby further protecting your budget, and the work they do to cope with emergencies will be generally unpaid. You may ignore your subordinates when they beg for overtime compensation for their employees. They will probably say they fear the employee in question might be demoralized and leave the firm, but they are really just trying to stay on the employees’ good sides. Avoid approving such ad hoc requests unless you are pretty sure the employee is serious about leaving and you know they are truly critical to the organization’s (and your) success. Never let the employee know that they have any special importance to the organization, however, as there is no reason to give up any of your power or advantage over them.
Use metrics to focus the organization on controlling overtime. Have one of your subordinates track overtime closely and maintain charts, and make sure the charts are reviewed at your staff meetings. Monitor labor hours, highlight any overtime you have to pay for as excessive and ignore the rest that you get for free. High visibility in this area will lend more power to you as you closely manage the business of your direct reports.
Pay attention to overtime forecasts. If employees wind up working more than they forecast, focus on the unexpectedly high cost as a bad thing. If employees work less than forecast they will probably think they did well and saved the company money, but you can keep them at a disadvantage by suggesting they didn’t do a good job of forecasting, or that they were inflating their forecasts as a hedge. If they hit their forecast exactly, you can suggest that there might have been some padding in the figures, or suggest they must be lying because “nobody’s that good.”
Effective management of overtime is another step up the ladder for you. Correct management of overtime and related business issues can bolster your power as a manager, control your costs, keep your subordinates at a disadvantage, and enhance your appearance to your superiors, showing them what a savvy and cost-focused manager you are. The employees you lose in the process are probably slackers anyway, and, when they’re gone they can’t say anything bad about you, which is a good thing.
copyright 1998, 2008, Timothy F. Prosser, This line must be included in all copies
Tags: bad management, business humor, cost control, humor, management secrets
