How a 4-Day Workweek Story Went Viral

What a Small New Zealand Company Tells Us About Our Work Lives

Jul 31, 2018
Accounting
Management

SMITH BRAIN TRUST – A recent four-day workweek trial program at a small New Zealand company drew a disproportionately large amount of outside interest. 

For two months, this 240-worker firm, Perpetual Guardian, allowed its staff to work four eight-hour days, while being paid for five. During the limited trial period, there didn’t appear to be a reduction in overall productivity, despite the shorter workweek. But after two months, employees reported lower stress levels, better work/life balance, and an increase in overall life satisfaction.

Articles about the trial crisscrossed the globe, appearing in the Guardian newspaper, Australia’s News.com, India Times, CNN, the New York Times and elsewhere. It seemed like a holy grail of work solutions.

“It’s easy to see why the story got so much attention,” explains Gilad Chen, the Robert H. Smith Chair in Organizational Behavior at the University of Maryland’s Robert H. Smith School of Business. “It’s one of those ideas that’s cool and provocative.”

However, the scope of the experiment was limited, and ultimately, it didn’t offer concrete, verifiable evidence. Nonetheless, it does speak to some larger truths about productivity, work stress and job satisfaction.

“What we know to be effective in the workplace, based on years of solid academic research, is giving employees control over when and how to get their work done, to the greatest extent possible,” Chen says.

That might mean requiring that employees or work teams complete a certain number of hours or tasks per month, but allowing flexibility over when those hours or tasks are completed and how many of them are performed in-house or by telecommuting.

“Some people might decide to work three days a week for 13-hour days. Other people might prefer 6- or 7-hour days, six days a week,” Chen says. “But if you give them the choice of deciding how they are going to get the work done, that is much more motivating than just saying, ‘You are all going to work four days or five days.’”

The idea of a four-day workweek clearly does resonate with a lot of people. Just do a Google news search of the term “Four-Day Workweek” and see how many articles were written about this one, small New Zealand experiment. 

But it’s not the only motivator that people want from their workplaces. Employees today, in many cases, are looking for a challenge, a special project or assignment that affords them opportunities to grow and improve, Chen says. Those things bring stress, he adds, but it’s positive stress, the kind that has the power to drive people.

Doing less, he adds, or doing it over fewer days isn’t always motivating for people. “Having choices in what you do and how you do it, that is motivating for most people,” he says.

Recent research from Emanuel Zur, assistant professor of accounting and information assurance at the Smith school, shows that companies can improve productivity and employee retention by offering better workplace benefits.

In the research, Zur, along with recent Smith Ph.D. graduate Heedong Kim and Baruch College’s Masako Darrough, examined changes in state unemployment benefits programs and how the benefits correlated with firms’ productivity. They also measured how firms’ other employee benefits affected productivity.

They found that better benefits makes employees happier, less likely to leave, and more productive in their current jobs. Good work/life balance benefits — such as flexible work schedules, longer maternity leave and telecommuting policies — provided the biggest boost to employee productivity and a company’s bottom line.

Perpetual Guardian’s experiment, in giving its employees a four-day workweek at five-day salaries, resulted in an immediate improvement in employee happiness, Chen explains. “And of course people were happy with it; they work fewer hours for the same pay. But if the company surveyed employees a year later, they may find a return to a lower level of satisfaction with the work and possibly a lower productivity level.”

Of course, the four-day workweek might not work in all industries as well as it worked for trustee and estate planning firm Perpetual Guardian.

“The broader idea, for all companies, is to focus on what you are trying to accomplish with your work rules,” Chen says. “We know that giving people a sense of control over their work lives has been shown to add to job satisfaction and overall productivity. But for employers, it all must be balanced against the need of what people do to be effective.”

GET SMITH BRAIN TRUST DELIVERED
TO YOUR INBOX EVERY WEEK

SUBSCRIBE NOW

About the Expert(s)

ChenGilad

Dr. Gilad Chen is the Robert H. Smith Chair in Organization Behavior, at the University of Maryland's Robert H. Smith School of Business. He received his bachelor degree in Psychology from the Pennsylvania State University in 1996, and his doctoral degree in Industrial/Organizational Psychology from George Mason University in 2001. Prior to joining the Smith School, Dr. Chen was on the faculty at the Georgia Institute of Technology and Texas A&M University, and a visiting scholar at the Hong Kong University of Science and Technology, Technion, and Tel-Aviv University.

Emanuel Zur

Emanuel Zur, PhD, Assistant Professor of Accounting and Information Assurance, joined the faculty this fall 2013. Prior to joining Maryland's AIA faculty, Emanuel was an assistant professor of accounting at Baruch College and a visiting assistant professor at MIT's Sloan School of Management. He holds an LLB in law and a BA in economics from Tel-Aviv University in Israel, as well as an MPhil in management, and a PhD in business administration (accounting) from New York University's Stern School of Business. Before entering academia, Emanuel worked as a consultant for EY and as a lawyer for one of the leading law firms in Israel.