Case study: Perpetual Guardian

Read the case study below, then answer the following questions.

Andrew Barnes founded Perpetual Guardian, New Zealands largest statutory trust company. By his own description, hes a grey, white male who worked his way up the ranks through hard work and graft. So far, so standard. But what sets Barnes apart from other businessmen of his generation, is that hes changing the world. He's making the four-day working week a real thing.

Barnes sees himself as the next in a long line of heretics.

Im quite sure about a hundred years ago or more, there were a couple of greybeards sitting around a table and one said Ive got this terribly radical idea, I think well drop the working week from seven days a week to six, and everybody around the table looked aghast and said Thats not going to work and somebody else said Hey! Lets drop the working day from 12 hours to 10 hours and again, everybody said thats not going to work.

Today, hes suggesting we get back around that drawing board and question the standard working hours.

We have ended up on five days, eight hours, but there is no reason we have ended up on five days, eight hours, its just that weve sort of got there.

Barnes wants us to stop thinking about work in terms of hours and start thinking about our days in terms of productivity targets. So, one day, just over a year ago, he said this to his staff.

Im paying you for an agreed amount of productivity, I dont care if you can deliver that over five days or you can deliver it over four days - Im not paying you to warm the seat, Im paying you for the output.

And so the four-day working week began at Perpetual Guardian. Staff were paid for five days a week but could opt to take one day off so long as they got their tasks done. Not only were staff happier having achieved a better work/ life balance, but they were actually more productive.

Kirsten Taylor, a single mum and manager of the Perpetual Guardian Foundation, used her day off as a mental health day - whether that meant spending more quality time with her son or simply catching up on chores or a day on the sofa with a book. She says that its difficult to overstate the benefits of the four-day week for staff morale:

There are some people in this organisation who I have heard say that it has changed their life so, its no small thing.

Now, for any hard-nosed business people out there thinking that this all sounds nice and fluffy, but I dont want to fund staff rest days youre not alone.

Andrew Barnes himself once felt the same.

Im of the generation that was conditioned to think that working longer equated to working harder and smarter... so I think what we are trying to do here is to change the conversation... a lot of times when people talk about a four-day week or work/life balance the conversation starts with work/life balance. And the problem there is that us old fogies are going to sit there and go thats going to impact on productivity, therefore Im not going to do it. By addressing the problem from the end of productivity, Im saying, actually your productivity wont go down, in fact, if anything it will go up.

So how has reducing the number of staff hours in the office increased productivity?

Kirk Hope from Business New Zealand says that the success of the four-day week at Perpetual Guardian was in the trial making sure people really understood how they could work within a four- day work week. He says the introduction of a four-day week offers an opportunity for employers and staff to question the way they work and make improvements.

Its really critical to enable people and support them to figure out smarter and better ways to do things. But he warns that cutting down on hours without improving efficiency and productivity would essentially lead to giving up 20% of time to your competitors. As Kirsten Taylor says, you really do have to be extremely focused on your four days.

The challenge to get the weeks tasks done in four days can be too much, and some employees at Perpetual Guardian have chosen to opt-out of the scheme, deciding instead to work the full forty hours a week. Barnes says he understands that different employees have different needs. Some like to work at a less intense pace and others enjoy five days of social interaction at work.

To those, he says. I dont care, if you want to have social interaction and deliver productivity Ive agreed over five days, thats okay by me. If you want to work five days but compressed hours but deliver the productivity, fine by me. If you can do it in four days, fine by me.

1. Based on the case study, discuss three examples of how Perpetual Guardian is applying the principles of scientific management to their work methods.

2. In his Hawthorne studies, Elton Mayo discussed the Hawthorne Effect as theory of motivation in the workplace.

a) Based on the case study, identify two examples of the Hawthorne Effect at Perpetual Guardian.

b) Considering the Hawthorne Effect, identify and discuss further, two strategies that could be adopted by Perpetual Guardian to increase employee productivity.