Late Hours - Moral Hazard

Through my career developing software, I have noticed a behavior that can be perceived as a sign of commitment but is a tactic that has negative consequences for the whole organization. To be more specific, I will describe a moral hazard found in many teams: working additional hours at the office to create an illusion of dedication.

At the beginning of my professional career, as an intern working for a large financial organization in Brazil, I observed my colleagues staying past 6 pm at the office because that contributed favorably to the performance evaluation. That led my peers to engage in busy work to create a false perception of dedication. This situation ended up creating a toxic culture and work-life unbalance. The managers played the game to attempt to extract most of their employees, which helped to institutionalize the behavior.

At that time, there was an essential factor that added to the situation: the company offered higher salaries and great perks such as a luxury car for personal use, five weeks of paid vacation per year, and therapeutical messages during the day. Other employers unmatched those benefits; the company was a very desirable place to work in a country with rampant poverty and many people willing to work in a toxic culture.

In more recent working engagements, I have observed that this behavior is still pervasive, although more subtly, due to organizations efforts to create sustainable environments and retain/attract talent. A few weeks ago, at my current position, a co-worker commented to me after waiting for the boss to leave the office for the day, “Now that the boss left I can leave too.”

Even though it is possible to argue that this behavior can be used by managers to foster dedication and lead others by example, I believe that the adverse side effects outweigh the positive ones, this creates a slippery slope that can ruin the organization culture. To motivate their employees, managers should engage in more benign strategies such as increasing the employees’ autonomy, creating a sense of purpose and providing an environment where people can develop their skills.