De Gruyter, Germany: Towards a balanced flexibility
In 2004, De Gruyter – a German publishing company – introduced a new, voluntary working-time model in its Berlin office: rather than requiring that working hours be recorded, and checked by line managers, the system is based on trust. Employees within sections collectively organise their working hours to ensure continuity of service. Both management and the company works council feel that the new system permits a better work–life balance, while management link it to greater productivity and reduced absenteeism.
Founded by Walter de Gruyter in 1919 and based in Berlin and New York, Walter de Gruyter GmbH & Co. KG has a long tradition of publishing scientific works in the social sciences, linguistics (English language), ancient history, philosophy, medicine and law. Today, de Gruyter publishes over 250 new books a year and over 60 academic journals. The emergence of the internet and the general reduction in university budgets forced de Gryuter into a period of consolidation in the late 1990s; a further challenge came after German unification in 1990, when the loss of tax incentives compromised the company’s finances. A small family company competing on the world market, de Gryuter installed a managing director to oversee the restructuring process in 1998.
With the support and supervision of its works council, de Gryuter’s consolidation strategy has involved outsourcing some tasks. This has led to the closure of its print, distribution and warehouse departments. Today, the company employs around 200 workers in Germany, 60% of whom are women. Altogether, around 30% of employees are on part-time contracts; around 20% of employees are members of the trade union Verdi.
Description of the initiative
A key element of de Gruyter’s business strategy was the introduction of a working time model that met the needs of both the firm and the workforce at its Berlin office. The then managing director felt that the existing working time agreement, dating from 1971, rewarded an employee’s presence rather than their effort; the works council felt that even the modified 1971 agreement imposed time restrictions on the workforce that were not suited to the current situation.
Prior to 2004, a flexitime model existed: employees were required to arrive at work between 07.00 and 09.00, and to finish no earlier than 15.30. Two problems were associated with this working time pattern: employees’ late arrival at work and high overtime levels ).
Still operating from the perspective of the old system, management found themselves in the difficult position of having to discipline employees for poor time-keeping, even though the individuals in question may have worked more than 100 hours that week and demonstrated excellent performance. Another feature of the old agreement was a working time account, in which any extra hours not reclaimed as free days after two months were lost. From both the perspective of management and the works council, this rigid working time model threatened to undermine the morale of the workforce and to lead to employee burnout.
In 2004, management and works council undertook a joint seminar on working time trust, with a view to controlling the level of overtime worked, matching production to market needs, and improving the morale of the workforce. As a result of the seminar, key actors came to support the introduction of the ‘working time trust system’. Initially, a two-year agreement was signed at the end of 2003; this was subsequently renewed in December 2005.
The original agreement contained a number of important provisions. These were included primarily to help overcome reservations about the new model among some sections of the workforce. The key provision was that the working time trust model was voluntary. Secondly, the agreement was fixed for a two-year period; this meant that those employees who agreed to test the model could go back to the old model if they chose. As the new working time structure meant that line managers lost their influence over when other employees arrived and left work, this test period also gave these personnel time to adapt.
Because the new working time option was voluntary, the works council and management agreed to offer employees a choice between two systems – Model A and B – which would run parallel to each other. The two models shared some common elements, including a 37.5 hour week and core working hours of 07.00–20.00, Monday to Friday.
In Model A the employee has a working time account of around 50 hours. They continue to record when they arrive at and leave work, by means of a clock-in form. The employee’s line manger checks this form at the end of the month. Both the line manager and the employee are responsible for allocating the hours to be worked in the case of a surplus.
In Model B (the new system), all forms of managerial control over working time are rescinded. Employees covered by Model B have only the legal requirement to record any hours worked that exceed 9.5 hours on a working day, or any hours worked on holidays or weekends. Employee sovereignty over working time, however, does require some form of organisational structure: for this reason, the agreement requires that each individual section set a so-called ‘service time’, during which the particular services of the section are guaranteed. For example, in the case of the production/commissioning department, the service time runs from 09.30 to 15.30. Therefore, each department is required as a group to organise who will be present on which day and at what time.
Just 70% of the Berlin workforce chose Model B when it was first introduced. A large proportion of the workforce distrusted the proposed lack of any documentation of the hours they worked. However, by 2005, when the new agreement was signed, more than 90% of the workforce had signed up to the new model. From the perspective of both works council and management, the new working-time practice allows employees the chance to better balance the often conflicting demands of working and private life.
In addition, management notes a number of business improvements brought about by Model B. Because employees have greater autonomy over when they complete their tasks, they are less stressed and more motivated. As a consequence, according to management, productivity has increased and absenteeism decreased.
A further benefit of Model B is an improvement in the firm’s organisation in the form of service times, so important to the success of the working time trust model at de Gryuter. According to the firm’s personnel manager, the joint self-regulation of departments by employees has improved team working, allowed individual employees to raisetheir skills levels and increased transparency within the firm.
Exemplary and contextual factors
In the face of a contracting and highly competitive market, de Gruyter has implemented a working time model that protects employees’ job security without, apparently, demanding major sacrifices as a way to remain competitive. With the recent acquisition of two publishing houses, K.G. Saur and Niemeyersverlages, de Gruyter hopes to convince these new employees of the benefits of such a working time model. Clearly, the success of the initiative lies in the willingness of both management and the works council to find mutually agreeable solutions. This is demonstrated by the voluntary nature of Model B, as well as by the fact that both sides saw the need to include a two-year probation period, during which any fears on the part of employees and line mangers could be addressed.