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C2 Fair distribution of gainful employment

Goal of the indicator

Gainful employment is a valuable good and an important element of participation in society. And yet some people currently work too much (“live to work”), while others do not work at all (“are unemployed”). Thus, the primary goal of this indicator is to ensure just distribution of work volume among all persons who are able to work. Enterprises make mutual efforts to ensure that all human beings are given a fair proportion of the gainful work available, with no one having too little or too much. To this end they successfully eliminate overtime and then even build up “undertime,” promoting further reduction of the legal core working hours in this way.

Surveys show that people all over Europe wish to spend only 26 to 39 hours a week engaging in gainful employment.[1] The British Think Tank “nef” (new economics foundation) goes even further. In a report it sketches out the vision of a 21-hour week. The authors believe that a step-by-step transition to a new “standard” would solve a series of urgent and connected problems, among them overtime and unemployment, mass consumption and CO2 emissions, a poor sense of well-being and inequality. This would offer more time for a sustainable lifestyle and social exchange while offering possibilities for participating in the diversity of life.[2]

Prompt questions

  • How is working time / time off work defined in the company (specifically in sole proprietorships)?
  • Does the company provide transparency or possible working hour models?
  • What notion do employees have of meaningful use of working hours? In your view, how could working hours be best organized in the future?
  • Does the formula “working time = lifetime” predominate the mindset of your company?
  • Are trainings on self management and time management offered?
  • Do you trust your employees to manage their working hours self-reliantly?
  • Do you employee temporary workers. If yes, how is this justified?
  • What value do you place on non-remunerated work?

Relevant data

  • Quota of all-inclusive work contracts
  • Amount of overtime per employee
  • Quota of temporary employment
  • New hires
  • Employee surveys on working hours and working hour models

 

Evaluation table

Sub-indicator

First steps

(0 - 10 %)

Advanced

(11 - 30 %)

Experienced

(31 - 60 %)

Exemplary

(61 - 100 %)

Reduction of normal working hours

 

Relevance: high

 

Proportion of contracts with lump sum overtime payment reduced by approx. 50%;

 

Average annual  overtime: a maximum of 10 hours of overtime per month per employee

 

First new hires due to reduction of overtime

Proportion of contracts with lump sum overtime payment reduced by approx. 75%;

 

Annual average overtime: a maximum of 5 hours of overtime per month per employee

 

New hires equivalent to reduction of overtime

No more contracts with lump sum overtime payment;

 

 

 

Annual average overtime: 0% per  employee

 

New hires correspond to reduction of overtime

Average working time per employees is approx. 10% lower than sectoral average or a maximum of 38.5 hrs

 

 

 

New hires made due to general reduction of working time

Increase in proportion of part-time work models and use of temporary employment (with adequate pay)

 

Relevance: moderate

 

Up to 10% of employees can work part-time

 

Temporary employment only for equal pay; proportion < 10% of all employees for one year at most

Up to 25% of employees can work part-time

 

Temporary employment only for equal pay; proportion < 5% of all employees for one year at most

Up to 50% of employees can work part-time

 

Temporary employment only for equal pay; proportion < 2.5% of all employees for half a year at most

More than 50% of employees can work part-time

 

Temporary employment only for equal pay and justified by operating conditions  for half a year at most

Conscious approach towards (life-) working time

 

Relevance: moderate

 

Training and advanced training offers in self- and time management on a regular basis

Employee survey on “optimal” working hours and working (hour) models on a regular basis

4-day week (with full pay) upon reasonable request possible

Employees determine working hour models self-reliantly

 

Special aspects for the assessment

This indicator applies for all sectors and sizes of companies; no further categorization is involved.

Exception: for sole-proprietorships not all criteria apply in full (cf. guidelines for sole proprietorships).

For newly founded enterprises (start-ups) and those with seasonal business (tourism, construction sector), please note special instructions.

Restrictions for sole proprietorships

Here the criterion “Reduction of normal working hours” (62.5%) refers exclusively to the weekly working hours (incl. overtime) put in by self-employed persons. Those are exemplary whose average working hours are 10% lower than what is standard for the the sector, or a maximum of 38.5 hours. Special attention should be paid to recording working hours/overtime. Should working hours exceed the desirable limits, new employees should be hired or commissions should be passed on to others. This criterion also offers sole proprietorships a tool for identifying cases of self-exploitation (risk of burnout).

The criterion “increase in proportion of part-time work models” does not apply. The assessment (25%) is divided up into two percentages of 12.5% and entered under the other two criteria.

The criterion “Sensible approach to (lifetime) working time” (37.5%) applies in accordance with the self-understanding (given conceptualization?) of the self-employed person.

Remarks concerning seasonally dependent companies

(for ex. catering and hotel industry, construction sector)

If a company is seasonally dependent, the seasonal employees get classified as part- or full-time employees according to their work volume rather than being classified as temporary workers. Moreover, the quota of service and temporary staff which is independently “employed” (works on their own account) must be calculated and declared.

Remarks concerning newly founded companies

(for ex. start-ups, self-employed persons)

The founding phase can be considered a special event in the history of a company. Should this lead to a temporary additional burden over a relative period of time (not exceeding 3 years) for the start-up company or its employees (agreed upon by mutual consent), this will lead to a temporarily lower rating of the company concerning the criterion “Reduction of normal working hours.” The need to make excess efforts during the founding phase of a company is natural (cf. activation energy = initial energy needed to set a chemical reaction in motion). There is no compensation (better evaluation) for this, however, as it is important to emphasize the importance of regulated working hours long-term. Should extensive advanced trainings for self management and time management take place, this is an indication that the newly founded company is addressing the underlying issue intensively.

 

Differentiation from other indicators

This indicator is closely connected to Indicator C1 (Quality of workplace) and C4 (Fair distribution of income). Neither Indicator C1 nor C4 can be considered separate from C2.

Indicators C2 and C4 take two different perspectives in approaching the problem as to how fair “payment per time unit” should evaluated. C2 lays the focus on the way working hours are managed, whereas C4 focuses on remuneration for work done. Sole proprietorships constitute a special case here since low income can be compensated for by increased expenditure of time. In such cases one would have to assess whether payment is fair (hourly rate vs. overall remuneration). Solutions depend in part on a person’s individual sensibility and set of values (for ex. free time has priority over time spent on gainful employment), which can either lead to an adjusted lifestyle or to higher income (need-oriented discussions with customers are a possible approach). Should neither prove possible, the business model must be analyzed honestly – if need be with the help of external appraisal – and adjusted accordingly.

Indicators C2 and C1 overlap in terms of life balance, which depends to a great extent on the working hours specified by the work contract. Indicator C2 does not assess this in detail (like C1 does); instead, it merely considers the aspect of time spent on gainful employment.

Definitions + Background

Work in general and gainful employment in particular fulfils various human needs. For one it enables us to realize ideas and thus make a direct contribution to our own well-being (sense of self-value, recognition, success). Moreover, it serves our fellow human beings, whom we help by satisfying some of their needs with the goods we produce or the services we provide. Last but not least, work is an important communication tool (a means of social exchange) and it helps us participate in economic life (gives us scope for action) as well as in society in general.

When the focus lies completely on one’s working life, gainful employment can also lead to/perpetuate an imbalance between various areas of life and impede societal and social participation. In such cases, functions in areas of life not affected by the business world are neglected or dealt with under enormous time pressure. These are tasks which sometimes have high societal relevance and help co-workers develop their personality, consequently allowing them to make use of skills, experiences and qualifications in the company sphere which they have acquired outside their place of employment.

This indicator pertains to a person’s current work situation. It strives to promote a sensible approach to life time/work time. In Austria, 330 million hours of overtime are put in annually, which amounts to 8.2 hours of overtime per week for person. If this overtime were converted into additional workplaces, this would create 200,000 additional full-time jobs.[3]

At present, the “systemic compulsion to grow” is justified in part by the role which growth plays in creating new jobs.

From an ecological perspective, the fact that non-reduction of working hours coupled with constantly increasing macroeconomic productivity (technical progress, improved organizational structures, improved quality of work...) manifests itself in the form of further economic growth. Statistical evaluations show that by reducing working hours to an optimum one can achieve higher productivity on the part of the workers (partial compensation for losses in productivity), whereas macroeconomic production decreases (reduced hours of operation...).[4] Longer working hours rarely lead to better results; often time is wasted instead.[5] 

In order to preserve jobs in cases of stagnating economic performance and simultaneously rising productivity (assuming this is still even regarded as the prime goal), it is only logical that working hours must be reduced. As early as the 1970s, ventures in this direction were made by the IAB (Institute for Labour Market and Employment Research) which envisioned a productivity-oriented reduction of working hours.[6]

A crucial and often discussed question is how optimal working time should be defined. Various studies show that reduction of working hours to an optimum leads to improvement of (productive) performance, whereas increases in working hours lead to poorer (unproductive) performance due to the increased burden. Biologists use so-called optimum curves (also called tolerance curves) which define the area in which a species or an (eco-) system is able to survive. Important factors which need to be considered in determining an operational optimum are age, gender, family situation and societal commitment.

In the context of organizing working hours, little attention has been paid so far to the impact which increased work loads have on health (increase in productivity at the cost of employees’ health and consequential costs for the health care sector).[7] 

Evaluation of temporary employment

Temporary employment is an enticing tool for many enterprises, allowing them to bridge over seasonal/temporary effects more easily without having the long-term disadvantages of making commitments to employees (to ensure flexibility). This advantage is usually not remunerated accordingly, however. Thus, remuneration of temporary employees should at least equal that of other employees with comparable circumstances (and include compensation for risks, social security and profit participation). If temporary employees are employed for longer than one year or the proportion exceeds 10%, they should be given a permanent work contract.

Definition of “sensible approach to lifetime/worktime”

This point is partially covered by C1 but it is specified in terms of the aspect of time in C2.

  • Self management and time management helps employees deal with time resources better and more self-reliantly.
  • Employee surveys facilitate actual state analyses and make it possible to develop attractive long-term solutions for and with employees.
  • The 4-day week is a possibility for reducing working hours (with equal pay) which is relatively easy to implement. It requires increased organizational efforts (initially). A first step can be to honour increased, unremunerated work loads which are performed outside the work world (child rearing, voluntary work). Employees could apply to their superiors for such remuneration after furnishing proof of it. This also provides the possibility for bringing part-time and full-time employment closer together.
  • Employees define the working hours they require to perform their tasks and reach their project goals self-reliantly.
  • Direct involvement of employees and employee representatives regarding organization of working hours. (They themselves know best how much time individual activities take).
  • Self management and time management trainings (inspiration and vigour; effectiveness and efficiency)
  • Employee surveys concerning working hours and working hour models on a regular basis
  • Creation of optimum curves for working hours for each individual employee and the company as a whole (influential factors: age, gender, family situation, social involvement)
  • How do you want to deal with increases in productivity? (reduction of working hours, wage increases, enhancement of product and service quality (investments), reduction of costs, winnings paid out)

Facilitation of implementation in companies

Best practices

To date we only have a few examples of how companies are perceived as role models regarding this issue. A frequently cited (and thus in part problematic) example is the Brazilian firm SEMCO, which entrusts its employees with managing their time responsibly and performing their tasks with an equal measure of responsibility.

Bibliography/Articles/Links

[1] Böckler Impuls. 03/2011: Gleichstellung. Eltern in der Traditionalisierungsfalle. http://www.boeckler.de/pdf/impuls_2011_03_4-5.pdf

[2] nef (new economics foundation): 21 Hours. Why a shorter working week can help us all to flourish in the 21st century. London 2010. http://www.neweconomics.org/publications/entry/21-hours

[3] Der Standard (10/11/2011): "Eine völlig entgleisende Arbeitszeitkultur." http://derstandard.at/1304554218427/Zeit-fuer-Familie-Eine-voellig-entgleisende-Arbeitszeitkultur

[4] Böckler Impuls 17/2007: Arbeitszeiten. Kurze Arbeitszeit, hohe Produktivität. http://www.boeckler.de/pdf/impuls_2007_17_6.pdf

[5] Lehndorff, Steffen: Wie lang sind die Arbeitszeiten in Deutschland? IAT Report. Wuppertal 2003. http://iat-info.iatge.de/iat-report/2003/report2003-07.pdf

[6] Kunz, Dieter u. Müller, Wolfgang G.: Produktivitätsorientierte Arbeitszeitverkürzung als beschäftigungspolitisches Instrument. Mitteilungen aus der Arbeitsmarkt- und Berufsforschung. IAB. Nürnberg 1977. http://doku.iab.de/mittab/1977/1977_4_MittAB_Kunz_Mueller.pdf

[7] Wirtz, Anna: Gesundheitliche und soziale Auswirkungen langer Arbeitszeiten. Bundesanstalt für Arbeitsschutz und Arbeitsmedizin. Dortmund 2010. http://www.baua.de/de/Publikationen/Fachbeitraege/Gd59.pdf;jsessionid=B737F2202A66E01C5616230FC8A861E7.1_cid253?__blob=publicationFile&v=4

 

Haug, Frigga : Die Vier-in-einem-Perspektive. http://www.friggahaug.inkrit.de/documents/DA291_fh.pdf

Kretschmer, Tobias et al.: Wachstum und Produktivität. Ein Gutachten im Auftrag der Enquete-Kommission “Wachstum, Wohlstand, Lebensqualität,” Projektgruppe 1. Munich 2011. http://www.bundestag.de/bundestag/gremien/enquete/wachstum/gutachten/m17-26-14.pdf

Seifert, Hartmut: Konfliktfeld Arbeitszeitpolitik. Friedrich Ebert Stiftung. Düsseldorf 2006. http://library.fes.de/pdf-files/asfo/04303.pdf

The Proudfoot Report. Produktivitätsstudie 2006. Eine internationale Untersuchung der Produktivität auf Unternehmensebene. http://www.optimal-office-management.de/downloads/Productivity_Report_Proudfoot_06.pdf


Editor: Dominik Sennes, dominik.sennes@gemeinwohl-oekonomie.org