Perhaps the first company on the planet to think about the effects on employee turnover was the Ford Motor Company. Early 1900s were a turbulent time and employee turnover was killing the company. At around $2.25 a day, each worker was expected to work for around 9 hours. The attrition rate was nearly 300% and they had to hire 52000 employees to maintain a steady workforce of 14000 on the assembly line. It was then Henry Ford, took the unprecedented step of doubling the wage from $2.25 to $5 a day. The wage rate increase was not just about giving more money but it was a sort of first ever profit sharing plan.

Working overtime is dangerous, I feel work related stress may be the #1 reason of attrition is software companies and meaningless overtime is the #1 cause of stress. However, still it’s not very hard to find instances of scheduled overtime when the project plan deliberately requires the team members to slog more-than-required hours each day on the project. Here is what you should know about overtime:

1. Programming is a mental work. The more time you spend doing it, the more tired you become. The more fatigued you are, the lesser you will be to concentrate. As the concentration down, the more bugs the system will contain. The more bugs the system contain, more money will be spent fixing it. So, the project will end up costing more.

2. People have a life outside work too. They talk to friends, pay their bills, eat out, do their laundry, sleep and do host of other things when they are not working. The more time they spend in office, the more overlap you will notice between their work life and social life. Now, you surely want people to keep out their social lives when they come for work, but at the same time you want them to work longer. That’s an amazing contradiction.

3. It’s not unheard of that top executives or entrepreneurs spend 80 hours work week. However, there is an important difference between motivations of executives and programmers. As expectancy theory states, there should be a positive correlation between effort (hours spent) and performance (output) and moreover, improved performance should lead to desirable reward.  So, although long hours of work will not stress the executive because they can link effort with rewards, but if the people in production workforce cannot find that link, overwork will simply stress them more. So, if you want to encourage voluntary overtime, then the employees must feel that it will reward them in desirable ways. 

4. Finally, overtime reduces employment. If 4 people are doing 2 hours of overtime every day, it means they are doing one extra person’s job. Given the point is made about more defects and social life, there is no point in saving that cost of one more person because you are not saving it anyway.