How can I discourage employees from working voluntary overtime?

Question

I run a small company (5 salaried employees). We have recently expanded from 3 to 5 staff, and while we are comfortable financially, there is not much spare money available. However there is a lot of work to do because the new staff are undergoing a significant amount of training.

A couple of employees are being overly persistent in working overtime to help meet the workload. I have asked them not to on numerous occasions but they insist! Or they say they won't, but go ahead and do it anyway.

If we could afford to pay them to for this overtime it would be great. But we can't, so I'm unhappy having them work extra hours for no pay. I'm extremely grateful to have such committed individuals on the team. But it makes me feel uncomfortable - for example, if things took a down turn and somebody had to leave, it could cause bad feeling if one of the 'overtimers' were dismissed.

I'm wondering what might be the best way of demonstrating my appreciation to these staff whilst firmly disallowing this type of behaviour?

Update:

Wow so many answers! Thank you. I marked MJ6's as the answer because this is the approach I actually used. There was some very useful stuff in the comments of that, unfortunately somebody has seen fit to remove these :(

You can see from the votes how many other great answers there are. And though it only has 2 votes (so far), I rate Adam Davies' answer highly because it addresses the core of the issue - how to be appreciative but firm.

Answer 1

Assuming you are in the US...

If non-exempt employees work overtime, and you know they work overtime and do not pay them time-and-a-half for it, you are breaking the law. Employees cannot volunteer. You need to instruct your employees that when they do this, it is not they who break the law but you. As kindly as their work is intentioned, it is putting your business at a serious risk. If you cannot impress this upon them and get them to voluntarily comply, it becomes a disciplinary issue.

Here's a nice explanation of the law. (The Fair Labor Standards Act says employees must be paid overtime rates when they work over 40 hours per week. Employees who are executive, administrative, professional, computer, or outside sales may be exempt from this law due to the nature of their work and the professional level of pay. Employees who are covered by the law are referred to as non-exempt.)

Additional note: Apparently in the UK, you are not required to pay overtime as long as the unpaid hours do not take the rate of pay below minimum wage. You would need to track all the hours they work, and divide their total pay by those hours to determine if you are within the law. They should not be working hours that are not tracked.

Answer 2

How can I discourage employees from working voluntary overtime?

By telling them, in person, at 5 PM, to go home.

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This sounds simple (and it is), but it goes a long way.

Early in my career, my boss told me to go home at 5 PM, and I never forgot it. He told me that there is plenty of work remaining for tomorrow, and that now is not the time to "burn the midnight oil."

In return, I became more punctual, and I seldom took a long lunch. Emphasis: I rewarded his kindness and his recognition of my work/life balance with increased efficiency and effort. My morale rose, and I believe that I became a more valuable employee.

If you do the same, you may expect a similar return on investment from your employees.

Answer 3

A very powerful, but often overlooked way of discouraging excessive overtime is to offer people flexible working hours.

If you have a system in place for flexi-time, then people are both careful to accurately record their working hours, so that they don't lose out on accumulating flexi hours, and mindful of the hours they are working.

An example flexi-time system might have core hours of 10:00 to 16:00, allow an employee to accumulate up to 3 days (24 hours) of flexi-time, or go into one days flexi-time debt, but require that they take no more than 2 days (or 4 half days) of flexi-leave (time off within core hours) per month without taking annual leave.

It may seem counter-intuitive, but psychologically, if you are getting close to the upper limit on the hours you can accumulate, you start thinking "if I work too many more hours, I'll lose them at the end of the month", so you start to cut down.

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In the European Union, you have to be careful that employees do not end up working longer hours than is allowed by the European Working Time Directive. Except in the UK (where you can agree to waive, in writing, your rights under the WTD) member states must ensure weekly working time is limited by law, or collective agreement and average working time should not exceed 48 hours for each 7 day period during the reference period of 4 months.

Incidentally, in order to comply with this directive, employers in Europe are effectively forced to keep track of employee working hours. In the UK, I have known business to request that employees opt out of the WTD not so they can work longer hours, but to remove the requirement for hours to be tracked, reducing the administrative burden on both the employee and the company.

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The only other thing I would say is that while working hours are a significant part of your situation, managing people such that they don't feel the need to spend excessive hours of over time is another.

You should try to identify if there are other impediments to these employees work.

It is possible, for instance, that they are spending so much time during the day helping the newcomers that they hang around late just to get some peace and quiet and allow themselves to get into flow. One way to avoid this might be to have one established team member at a time available to help newcomers, leaving the other established team members to concentrate on their work. This could switch every day/week, so that people at least get a day/week block of time to concentrate of their tasks (depending of course on their business needs).

Having 1 person working at 50% and two working at 100%, but only putting in 100% of their hours might work out better than having three people working at 70% (because of the task switching), but working 120% of their hours to make up the time.

Answer 4

You could try something my old boss did. He sent out an email saying something to the effect of

In order to conserve energy, lighting and HVAC will be turned off everyday at 6:15. If you need to keep working, please work remotely from home. Thanks for making the office more eco-friendly

I reality, I think he just wanted everyone there from 9-5 so he wouldn't have to work late, and so he wouldn't get called when he was with his family. All the programmers (including the nocturnal ones) actually adjusted their schedule to fit when the lights were on, and very rarely did anyone work after 6:15, as they had to move everything and re-setup at home.

Answer 5

You provided the answer yourself:

Be straight. Tell them that they efforts have gained them your gratitude. Tell them that, at the same time, if business necessity requires you to lay them off, that you would have to do what business necessity requires and lay them off. Because paying them in thanks and notes of appreciation won't go far with their landlords.

Maybe you could arrange to give some time off for those who put in the overtime. That, plus extra severance if you ever have to let them go. Or, you could say that you are running a professional environment, stock up the fridge and let them have at it :)

Answer 6

The simplest method which shouldn't find any legal problem in the US or UK is to require that any overtime be pre-approved. You can also emphasize other cultural aspects of the organization that this change would improve if you don't want the focus to be solely on the financial issue. Consider a notice similar to this:

We appreciate the enthusiasm for our organization shown by employees who go above and beyond the call of duty. While we appreciate this effort there are a few things that worry us. We are a family oriented company, and thus don't want to take you away from your family more than is necessary. We also worry that when most people work overtime, the environment may make everyone feel like they need to commit to overtime, even when they have other responsibilities they need to attend to. Lastly, as overtime is only discovered when time sheets are turned in it occasionally causes more difficult accounting issues we would like to avoid.

Therefore, starting on July 14th, all overtime must be approved in advance in writing or via email by your direct supervisor. Generally overtime will not be permitted except for very urgent work that cannot wait until the next work day. Your supervisor will be able to help you make this determination if you are unsure of the priority of your work.

Thank you for your valuable time and effort!

You can later instruct them that phone calls are ok as long as they are immediately followed by email for a paper trail of sorts. Depending on the laws in your country, you may also inform them that unapproved overtime will not be paid, but that would probably lower morale. You might, instead, tell those who insist on working overtime without notice that you expect them to leave work an equal time the following pay period so it doesn't affect accounting as much, and that if they continue to work overtime without notice you may be forced to let them go for violating company policy. In most places employees can't force employers to pay for work the employer didn't authorize, but there can be some difficult details to understand when communicating this to employees.

Again, consult with a lawyer familiar with employment law in your region.

Answer 7

I'm not sure what your business is, but as a software developer, I have regularly worked late without being asked or paid to.

This is usually because unforeseen work pops up - whether it be tidying up code that is difficult to understand, or having to re-write a previously delivered feature in order to deliver the next feature.

Essentially, it's always an investment of time today to make life easier tomorrow.

If I don't want to work late, the only option I have is to ask my manager for more time at the 11th hour - this doesn't look good, and is difficult to explain when the manager does not understand the nature of the technical issues you are facing.

Politically, the safest thing to do is get on with it.

If you really don't want your workers to work late, you need to get a grasp of the amount of time they really need to get the work done during work hours. Try the following:

1. If the work is broken down into tasks which are estimated in hours, get them to record how many hours they actually spend completing the task. You'll then get an average of how off the estimates are and be able to plan accordingly.
2. Find out if there's any bottle necks in their workload. There may be technical issues that are resolvable with a bit of effort that will pay back dividends in increased efficiency. Sometimes workers in the lower ranks won't say unless they are asked!

If you really can't speed things up or allow more time, you're only other option is to deliver less work. Your employees might have some really good ideas of how to deliver fewer features, but still deliver the same value to the end customer. It would be worth asking the question.

Good luck

Answer 8

You didn't say weather they were exempt or non-exempt. For non-exempt (typically hourly) employees, I think MJ6's answer is great. I am going to address exempt employees (typically salary).

In this case, you presumably don't want them working overtime because you don't want them burning out. It's not necessarily a bad thing in this case for them to work extra, but the effects on their personal lives and happiness can make it a problem.

The best wording I've found to address this is "I want you to remember that we need to work as a team at a sustainable pace. I appreciate the extra effort, but if you keep putting in that many hours you are conditioning people to expect that level of effort from you in the future and I'm concerned you will burn out." Employees will typically appreciate the concern for their feelings.

Also, I really encourage you to not provide any type of monetary reward for this behavior. Yes they gave extra time, but you don't want to encourage a culture where that is expected, required, or rewarded. Verbal appreciation for their effort (with the understanding that it won't continue indefinitely) is fine. You can take a softer line in this exempt case though since some people just enjoy working 60 or 80 hour weeks for no extra pay.

Oh, and you are lucky to have such committed employees. Now you just have to work to keep them happy and committed.

Answer 9

I did exactly that years and years ago in a very small company, but I was the one working overtime, almost 20 hours a day, and I actually never even informed anyone, I honestly just wanted to make things work and was very enthusiastic about the whole thing.

The then owner realized that and gave me shares of the company, something like 1%, and let me free to do what I want and take care of things.

The company grew to thousands of employees over time and neither me or the owner regret anything.

If you are lucky enough to have that kind of people working for you, which I can assure you it's VERY RARE, consider talking to your lawyer and making them become part of the business, even if its for 1%.

Give some time and even start giving shares as yearly bonuses.

You found some real good people that want to take care of a business that's not even theirs, give them what they are worth and let them become part of it.

Worked for me.

Answer 10

If you're using a time clock mobile you can send them a reminder as a push notfication to clock out when they reach, what you have set to be, their maximum daily limit of hours. You should be able to receive a notification yourself. Finally, there are some systems that prevent them from continuing to log in hours and basically asks them to call it a day.

Answer 11

You can, and should, tell them.

You can also lead by example, by leaving on time yourself. If necessary, return after they have gone home. In some cultures (Japanese comes to mind) it's considered slacking to leave before your supervisor.

Answer 12

Since these employees are so enthusiastic, I would consider somehow making them partners in the business, on some terms that are mutually acceptable, with respect to you retaining an amount of control that you are comfortable with and such.

Then they have a very good reason to be doing the extra work.

In a sense, they are behaving like partners already: people who have a personal stake in making the business succeed and put in the time, the way business owners do.