• New research shows offering employees more time off can actually improve their work performance
• Employees preferred additional time off over money as an incentive to improve performance
• Unproductiveness can cause significant losses for companies – is this a potential solution?

How do we get the most out of people? This question has long been at the core of business and industry, and rightly so – the ability and efforts of a workforce can be the main cause of an organisation’s success or failure.

Steve Jobs knew that the value of a company could be found in its people, being quotes as saying, “It’s not the tools you have faith in – tools are just tools – they work, or they don’t work. It’s the people you have faith in or not.”

As long as we have had leaders and followers, we’ve had questions around productivity, and how to inspire people to put their best into their work. But people, commonly, are unlikely to do something for nothing. Simply demanding better results, or attempting to strike fear into employees’ hearts does not guarantee success (and is not a tactic we’d recommend!). To encourage greater effort from staff, the common consensus for leaders is that they must dangle a carrot – provide an incentive to take on more or do better.

Of course, salary provides the most basic motivation for work. And, commonly, financial incentives such as bonuses have been assumed to be the best motivator for staff to put their best foot forward. Theoretically, on paper, the more money you offer someone the more effort they should put in. However “on paper” is very different to real-life. Often money does not have the desired effect. Research has shows that remuneration and recognition can take many forms – so how else can we incentivise employees?

Could increasing praise and respect be the way? Promoting healthy competition between staff, or awarding promotions? Perhaps leaders should be providing office perks and prizes?

Or… perhaps bosses should be considering giving their staff more time away from their work.

One way to significantly boost employee output, suggested by researchers from Frankfurt School of Finance and Management, is to allow employees more time off.

Whilst it might seem counterproductive to get more work out of your employees by giving them less time to complete it, the research findings appear to back this theory up.

Timo Vogelsang, Assistant Professor of Controlling and Managerial Accounting at Frankfurt School of Finance & Management, investigated the impact of both cash and free-time bonuses on work performance and focus. To do so, he gathered a number of participants, asking them to complete a task on a computer with internet access which involved moving sliders to randomly predetermined positions.

During the experiment, participants could click a “time-out” button to access the internet. Subjects were free to choose how to spend their time and could minimise the internet browser at any time to continue working. In the main experiment, participants were involved in two working periods lasting 30 minutes each.

The study used three groups: one group received €4 for each period, another received €4 for each period and the opportunity to gain an extra €6 for their efforts, and the last group received €4 for each period with an extra 25 minutes to use the internet.

Those given an extra 25 minutes leisure time as a bonus exhibited 60% less on-the-job internet consumption compared to those given extra cash. Also, those given extra leisure time showed increased work performance in terms of completed tasks.

The findings of Prof Vogelsang’s study clearly show that cash bonus do little to affect employees’ on-the-job leisure time nor their work performance. However, gifting employees more off-the-job leisure time does reduce the time employees spend distracting themselves and increases their performance while working.

With the most frequent time-waster at work being employees spending time browsing the internet for private use, managers would do well to sit up and take notice here. Gifting employees more off-the-job leisure time in order to reduce problems caused by employees using too many of their working hours on non-work activities, might just help them to boost employee output.

“Clearly ‘time is not money’ when using a gift of more off-the-job leisure as a form of management control.”, says Prof Vogelsang. “Compared to money, time has certain favourable characteristics and affects employees’ behaviour at work. Leisure time is a noteworthy alternative to cash bonuses and the various forms of non-cash bonuses currently in use.”

How can this work in practice? Prof Vogelsang suggests that off-the-job leisure bonuses should be implemented by informing employees in advance that they have the opportunity to leave work early on certain days or that they will be gifted extra holiday days, so they can set their working attitudes accordingly.

Affording such flexibilities and promoting a better work-life balance within an organisation ultimately might provide other benefits to an organisation too. Previous research has shown how happiness and employee satisfaction can boost company performance, potentially even more than salary increases. With industry becoming ever more competitive, global costs rising and organisations facing the prospect of having to do more with less, managers would do well to look beyond the chequebook.