Our blog about the 2014 Characteristics of Home Workers report suggested that casual home working (people being able to work from home from time to time) can be good for employers and employees if some basic rules are followed. A Working Paper from the Kiel Institute for the World Economy in Germany, recently published online, supports our view and gives a wider perspective. Interestingly this is against a background of political muttering in Germany about home working – the former German Minister for Labour, Ms Ursula von der Leyen, called for a halt of work practices that “blur the boundaries between the workplace and home”.
Taking advantage of the flexibility of the German language, the authors use one word – “Vertrauensarbeitszeit” (“VAZ”) – to describe what they are talking about. We need four for the translation – trust based working hours. The concept covers a range of working arrangements under which the employer gives up control over where and how its employees work. At one extreme the employer only gives up a limited amount of control – purely over working time – by allowing employees to decide about their starting and finishing times. In return, employees agree to work for a predefined number of hours each day. This is essentially the familiar flexitime arrangement.
At the other extreme, the employer allows a complete shift away from the classic five-day, 9 to 5, 40-hour week and lets employees adjust their time schedule and place of work as they wish. In these cases, the freedom is subject to the employee’s work function being covered in their absence or subject to them achieving a predetermined output. The paper finds that roughly half the businesses in Germany use VAZ in one form or another.
The authors of the paper relate the practice particularly to Germany’s large number of internationally competitive export oriented firms which rely heavily on product design and the novelty and quality of their products. Their research (using published national data and previous academic studies) was aimed at establishing whether the freedom offered by VAZ encouraged employees to be more innovative. Innovation was defined as the introduction of new products or the improvement of existing products, and the results were adjusted to take account of the underlying characteristics of the businesses studied.
The results showed VAZ did indeed encourage innovation. Businesses which adopted VAZ tended to be between 9 to 13% more likely to report innovative activity. The paper concludes that “the positive relationship between the adoption of trust based working hours and innovation seems to be driven by the degree of control and self-management over working days that are transferred to employees, rather than by merely allowing time flexibility”. So it is the sense that they are trusted which encourages employees to think creatively. We have talked in a number of recent blogs about the difference between processes and systems in the employment world and culture. In this case, at least in the best examples, the two things come together.
The first and key requirement for VAZ to work is a culture of trust in which employees are trusted and feel trusted. If that is not present, introducing it will almost certainly be doomed to failure – good employees will not take it up and bad ones will abuse it.
The second requirement is processes and systems. VAZ in its most creative forms involves a completely new deal between employer and employee. In the traditional model, the employer buys an agreed number of hours from the employee and, during those hours, the right to manage the employee’s performance to secure the best return. In a creative VAZ model, the employer buys agreed results and leaves it to the employee to work out how, when and where to achieve them. This has profound implications for the contract and for the ongoing management relationship.
VAZ in its most extreme form will not be for everyone but the glimpse the Working Paper gives of the power of trust in the employer/employee relationship provides food for thought for all employers.