10 Keys to a Sensible Overtime Policy

By Staff Report

Jan. 27, 2010

Developing a sensible overtime policy for your operation is essential and will result in a safer and more productive workforce.

Overtime is a common product of shift work and extended-hours operations, in part because small amounts of overtime are often built into shift schedules. However, if your operation uses additional overtime — that is, over and above regularly scheduled hours — you run the risk of increased costs, fatigue-related accidents and production errors. Developing a sensible overtime policy for your operation is essential and will result in a safer and more productive workforce.

Here are 10 tips for developing an overtime policy that will reduce the likelihood of safety, health and production problems.

1) Beware of the “excessive overtime cycle.” When overtime levels are too high, a counterproductive cycle quickly sets in. Shift workers always feel tired, making them prone to sickness or the need to take a mental health day. Consequently, absenteeism rises, which leads to more overtime and starts a vicious cycle that leads to productivity losses and increased accident risk.

2) Set an annual cap. To prevent an “excessive overtime cycle,” many operations set an annual or monthly cap on overtime hours. A cap benefits employee health and safety and also helps distribute overtime more evenly among the employee population.

3) Account for the “time of day” effect. An annual overtime cap is a good starting point, but it overlooks the effect circadian rhythms have on human performance. Because the human body experiences a low ebb in energy between 3 a.m. and 6 a.m., working during the overnight hours is much harder than working during the day time. Owing to this “time of day” effect, it’s advisable to track overtime hours by night-shift hours and day-shift hours. If you use fixed shifts, you might want to have a lower annual cap for night crews than day crews. If you use rotating shifts, you should make sure that no more than half of an individual’s overtime hours accrue during night shifts.

4) Restrict overtime to days off on 12-hour schedules. With 12-hour schedules, it’s prudent to have a policy restricting overtime on workdays except in emergencies, and even then to have a strictly enforced limit. It may be necessary at times to hold over a person for an hour or two while waiting for a relief worker to arrive, but prohibit shifts that last 14 hours or more. Overtime on 12-hour shifts, then, means the worker comes in to work on a day off. This is the trade-off for the 91 extra days off available with 12-hour shifts. In general, individuals should not work more than one additional shift per week and two additional shifts per month. The simple truth is that when you regularly bring in workers on their days (or nights) off, you forfeit the prime benefit of a 12-hour schedule—giving people more days off to rest and recover.

5) Avoid double shifts on eight-hour schedules. Double shifts, making for 16-hour days, are a bad practice, regardless of the hours they encompass. Except in emergencies, overtime on eight-hour schedules should be limited to an additional four hours.

6) Use caution when holding workers beyond eight hours. Even when you set the maximum work shift at 12 hours, you need to be wary of safety concerns, both during the final hours of the shift and on the drive home. Employees on eight-hour shifts are at risk because:

• They may be unaccustomed to working 12 straight hours.

• They don’t get the days off for recuperation that a full-fledged 12-hour schedule provides.

• Four hours tacked onto an evening shift leaves a person driving home at 3 or 4 in the morning, a high-risk time to be on the road.

7) Watch out for “overtime hogs.” Even if all the overtime at your plant is voluntary, you need to keep an eye out for individuals who work excessive amounts. It’s not uncommon for companies to have 20 percent of their employees working 80 percent of the overtime. Such a disparity should raise a red flag because people who routinely log 60- or 70-hour weeks are candidates for fatigue-related errors. Don’t try to solve the overtime-hog problem overnight. People who work a lot of overtime quickly become accustomed to the larger paychecks they receive and often adjust their lifestyles accordingly. Make sure workers understand the basis for policy changes, and build in steps that reduce overtime gradually.

8) Establish a formal rotation to distribute the overtime. If overtime is a regular feature of your operation, you should have some type of formal distribution system. This reduces the likelihood that you’ll be left shorthanded on any given day and prevents workers from feeling that a supervisor is playing favorites. With most overtime systems, workers’ names are placed on a relief list in order of seniority (or service time). When a worker’s name reaches the top, she has the first opportunity to work overtime. To distribute the number of overtime opportunities across the workforce, move workers to the bottom of the list whether they accept or decline the chance for overtime.

9) Emphasize cross-training. Some companies get into a bind because only a small percentage of the workforce is capable of handling certain types of jobs and tasks. Thus a few workers end up getting phenomenal amounts of overtime—whether they want it or not. When you train employees to handle jobs other than their own, it becomes easier to distribute overtime evenly. It may also reduce the need to call people in for overtime, maximize plant flexibility and reduce the number of people you need to provide relief coverage

10) Match staffing levels to work demand. For many companies, inefficient shift schedules lead to excessive overtime levels. For example, many operations with fluctuating work demands have antiquated work schedules that leave some employees idle and others with too much work. By re-examining how other companies deploy and schedule their workforces, it’s possible to dramatically reduce overtime and improve the efficiency, productivity and safety of your employees.

Source: Circadian

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