Management and Organization – Midterm Exam

MSc in Marketing - Salome Sakhvadze

Content:
- Introduction
- Shorter workweek and its impact
- Universal basic income (UBI) and its impact
- Conclusion
- References
Nowadays we encounter mixed views about what kind of impacts could a shorter workweek and
the universal basic income have on people, their job types and organizations' products/services.
Would they improve peoples wellbeing? In the case of a shorter workweek, would people be more
productive? If people will be more productive, would it have an effect on organizations'
service/products? What kind of effect will universal basic income have – would it be advantageous
for people and disadvantageous for organizations? Would universal basic income be additional
motivation for people with high salary and would the demand for "bad working positions"
decrease? When we are talking about job types people choose and organizations’ product/service
we should not examine these two completely independently from each other. Let's look at the
definition of an organization: “All organizations have some function to perform. They exist in
order to achieve objectives and to provide satisfaction for their members. Organizations enable
objectives to be achieved that could not be achieved by the effort of individuals on their own. It
must be remembered that organizations are structures of people“ (Mullins 2013, 78).

The shorter workweek

Shorter workweek should have different impacts on types of jobs people choose and
product/services organization provides. I will discuss the main implication a shorter workweek in
what follows: Shorter workweek will increase the peoples’ productivity which automatically
increases the quality of provided products and services by organizations.

Increased Productivity. If we use simple math, we will see that people have a very little time to
live with their lives. Usually, people work 8-9 hours a day, from 10:00 am to 19:00 pm, the whole
day. Plus, they need min 1 hour to go to their office from home and return back home from the
office. People need to sleep as well, while sleep requirements may vary slightly from person to
person, the most healthy people need between 7 to 8 hours of sleep per night to function at their
best. That means that in the best scenario, people have 6 hours for other activities (parenting,
studying, doing sports, etc). But, we have to take into account people's basic needs (e.g. eating).
As a result of overtime working and feeling of being extremely tired after the working day,
either physically or mentally, people do not have time at all. They even do not have enough time
for sleep. Thus, their productivity starts to decrease. The author - Lonnie Golden points out the
same point of view in his article that: “(1) Excessive work hours are a cause of symptoms of
“overwork”—a high risk of detrimental effects to mental or physical health. The perceived value
of sacrificed time may be underestimated; both workers and managers discount the long-term risk
(or benefits) to well-being and/or sustainable productivity when contemplating excessive
hours”(Golden 2010, 1184–85).There are companies and governments around the world which
experiment cutting working days during a week (for instance, in New Zealand and the United
Kingdometc) The idea of experimenting is to improve employees’ work-life balance. Why do they
need it? Because they need people with high productivity to offer consumers better products and
services and each employee who creates value for the organization is important for a company. A
good example is a firm in New Zealand that experimented removing an entire day from a working
week. For two weeks in May, the company asked its 240 office workers to work four eight-hour
days instead of five (The workers were paid for five days). As a result, 24% said their work-life
balance had improved, and 7% experienced the reduced level of stress. Meanwhile, the company
leadership reported no drop in productivity. Customer service even improved. Lonnie Golden
talks about the effects of working time on productivity and firm performance in his article and
indicates that: “Most of the literature examining reduced hour (or workload) arrangements, which
involve a reduction in workload or hours with a commensurate pay reduction, focus on employer
interest in retaining human capital, in particular, top talent. A more recent case in point is research
showing that, while organizations adopt reduced hour arrangements for their (largely professional)
employees, mainly in order to retain talent, they also found that reduced hours improved workers’
self-reported performance on the job. This buttresses findings that employer provision of better
work/life balance practices such as job flexibility is associated with significantly higher
productivity and self-assessed performance. Much research has focused on flexibility practices
(such as flextime and shortened workweeks) as a human resource benefit to attract and retain talent
(Barnett and Hall, 2001). Too few studies consider the motivation and coordination consequences
on individual and group performance, especially in terms of life/work consequences. Nevertheless,
even if, or when, there is no effect on employees’ work/life conflict, work/life balance practices
such as flextime are often associated with improved organizational performance “(Golden 2012,
7).

Everything that was mentioned above, I can discuss based on my own experience too – how
important is to have a flexible working schedule and to have a feeling that you can control your
working time – and how these things have impacts on your productivity and service/product what
organizations provide. I worked for 5 years in the Marketing industry, Advertising and Consulting
company. In this industry, your productivity is even more important because a companies', as well
as clients' success, depends on your ideas and solutions that you offer. You have clients from
different industries, with diverse needs. During a day, you have to deal with various briefs. In this
industry "overtime" is very often and not an unusual thing. But your brain has a limit, for example,
when you think 10 hours a day and that happens again and again, after some time your productivity
starts to decrease – you just cannot think about anything, especially about a creative idea. You
often have futile creative meetings, when you spend your time scrolling social media, start to offer
a pizza or start to make coffee – because you cannot concentrate on this meeting – and you spend
your working hours to do nothing –because you need relaxation. Because of overtime, you don’t
have enough time to sleep, spend time with your family, friends and you miss an opportunity to
receive positive energies. Even though we received bonuses for our overtime working –
satisfaction for the short-term was high, but in the long-term, you analyze that you prefer to have
less salary, less working hours to spend time for other needs. In my case, I have a daughter, and
there were days when I spent only 20 minutes with her. Consequently, I became indifference to
my job. I preferred to go home soon and spent my free time with my child than receive additional
bonuses for working overtime. On the other hand, what happens with an organization? You know
that you have a deadline, you offer to a client an idea which is not perfect and you have a feeling
of dissatisfaction. As a result, the company offers to a client an idea with low quality that increases
a chance to lose the client. To avoid all these problems, the company started to think solutions,
and one main solution for this situation was that CEO gave us an opportunity to control our time.
That means that it was not mandatory to work from 10 am to 7 pm. We knew that we had our
individual KPI – (sold ideas during the month). And we had the opportunity to schedule our
working hours based on our productivity. If we did not have crucial deadlines or tasks, we had a
chance to take day offs or we had the opportunity to work from home. (In case of women who had
a child it was a really good opportunity). Additionally, the company hired additional employees to
reduce overemployment, which gave us the opportunity to start work sharing. And the result was
shown in implemented KPI. We felt as freelancers with more responsibilities, while our work was
a full-time job.
In the same situation, if the company will not change the work times or will not offer solutions to
employee, the number of people who starts to work as freelancers, or choose part-time jobs will
increase. It is very common nowadays to work as a freelancer in the marketing industry, and not
only in the marketing industry. Why people choose this kind of jobs? For part-time workers,
flexibility is a key advantage. Because they work less than a full-time day, they still have time to
attend schools (if they are students), recover from an illness, care for family members and etc.
Those working less than half a day have the choice to work mornings, afternoons or evenings hours
when they are more predictive. In the case of freelancers, they have flexible hours, control over
jobs and clients. For organizations, it means that because of over-employment employees start to
quit the job. And there is a big possibility to lose employees with high skills.

It is not easy to adopt a shorter workweek in every industry. Different industry needs different
approach. But if we are talking about productivity, there are different solutions to cut the working
times: shorter workweek, shorter daily working hours. For example: in case of the food industry,
when you have a restaurant – you can not close it at 4 pm, because you have different competitors
who work until the end of a day 10:00 pm – in this case, part-time jobs can be a solution. If a
restaurant works from 10 am to 10 pm, 12 hours a day, the organization should hire two employees,
and each one will work 6 hours only. On the one hand, it will increase the productivity of each
employee and on the other hand employment will increase. People who want to work more to
receive more wages, part-time jobs will give them an opportunity to find a second job.

Universal Basic Income (UBI) and its impact

“What is universal basic income? A universal basic income is a particular utopian proposal which
refers to the income paid by a political community to every member of society on an individual
basis without any requirements” (Hudáková 2015, 1). In simple words, that means that the
government gives a certain minimum income to everyone, no matter whether they are rich or poor.
A basic income is paid regardless of who lives with whom, how much income a person has earned
in the past or earns at the moment, what her or his work performance is, and whether a person has
any incentive to work at all. It is a lump-sum transfer, which is universal and unconditional. When
we discuss universal basic income from the economic perspective, implications will not be the
same for different countries. It depends on a country, social classes, people's behavior, the level of
poverty etc.

What about people's job type, UBI will have different implications for people who have low and
high income. To be more precise, In Georgia (Georgia is my country of origin), there are a lot of
people, who work in companies where physical work is necessary and salaries are very low. They
work because they need to have money to satisfy primary living needs. For example, for people
who work on construction as a worker, the average monthly salary is 139 Euro. The salary is very
low and the job is very risky for health. Also, of course, they do not have intrinsic motivation. In
this case, if they receive universal basic income, without any work the demand for this kind of jobs
(with a low salary) will start to decrease and peoples’ decision to work with lower salaries will
become more voluntary. The total hours that workers wish to work at a given real wage rate will
decrease. They will prefer to rest because with the help of UBI they will already have a minimum
salary. In this case, if an organization will need employees for physical works, or for unpleasant
positions, it will be hard to hire people for the same salary what they had before the universal basic
income. They will be forced to increase salaries for unpleasant works and give additional
incentives (for example health insurance) to people to encourage them to start working again. The
implication of the increase in wages for unpleasant work could be the speed-up of technological
advancements. It would give a rise to a technology that could act as a substitute for humans when
it comes to unpleasant and unpopular work. The authors Howard Reed and Stewart Lansley point
out in their article that UBI is the way it would help prepare us for a world in which the new
technological revolution, driven by AI and robotics, will, over time, change the nature of work and
the type and number of jobs. (Howard Reed 2016, 8)

In the case of people who work in high positions and their salary is high, universal basic income
might have a different impact. On the one hand, people who have high salaries additionally will
have an opportunity to receive universal basic income without any working hours, they might start
to think to reduce their working hours to have more time for leisure and relaxation. And they will
have the desire to have a shorter workweek. And if their salaries will be decreased because of
reduced hours, this loss will be filled with Universal basic income. On the other hand, the
organization will be forced to increase intrinsic motivations for employees to reduce the number
of employees who quit the job or want to change full-time job with a part-time one. In the case of
organizations it will be hard and expensive to keep up their employees.

Conclusion

In 21 century, when the rate of life is very fast, everyone should try to use time correctly. People
should balance their stress and positive energies to be more productive and to create more valuable
things. The success of organizations is based on those people who work there. An organization
should start to try to adopt shorter workweek – they have to give employees control on their own
time – organizations should use people's time correctly, they need productive people. For me, who
has a child, it is most important to use time correctly. If the organization will not give me flexible
time for work, I will try to be a freelancer, I will try to find a part-time job and I will try everything
until I find the job which will be comfortable for me. Successful companies, like Google, Facebook
try to create a comfortable environment and workweeks for people because they know how
important it is to use time productively. Regarding Universal basic income, this may be a push for
organizations to use technologies instead of human labor. Especially in those cases that are tedious
and do not require any creative thinking. The reason for it will be people's decreased desire to work
on low unpleasant positions. When we are talking about UBI, I strongly believe that it will have
different implications for different countries. In the case of Georgia, if people receive UBI they
will just reject to work on low salaries positions, in the same time organizations do not have money
to increase salaries or offer people additional incentives to work. Also, they may not have money
to start using technologies instead of people. And as a result, we will see an increased number of
unemployed people.
References

Golden, Lonnie. 2010. “A Purpose for Every Time? The Timing and Length of the Work Week
and Implications for Worker Well-Being.” CONNECTICUT LAW REVIEW 42 (4): 1181–
1202.

Golden, Lonnie 2012. “The Effects of Working Time on Productivity and Firm Performance,
Research Synthesis Paper.” SSRN Scholarly Paper ID 2149325. Rochester, NY: Social
Science Research Network. https://papers.ssrn.com/abstract=2149325.

Howard Reed, Stewart Lansley. 2016. “Universal Basic Income: An Idea Whose Time Has
Come?” Compass. https://www.compassonline.org.uk/wp-
content/uploads/2016/05/UniversalBasicIncomeByCompass-Spreads.pdf.

Hudáková, Veronika. 2015. The Impact of a Basic Income on Labour Supply and Work
Performance: Evidence Based on Student Experiment.

Mullins, Laurie J. 2013. “Chapter 3: THE NATURE AND CONTEXT OF ORGANISATIONS.”