MOP

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All questions are based on the following case study.

Perpetual Guardian and the Four-

Day work week

On 5 March 2018, estate planning and investment firm, Perpetual Guardian embarked on what it

believes is a world-first among privately held companies anywhere in the world: it started an eight-

week trial that involved all 240 staff around New Zealand and sought to test productivity, motivation

and output by changing the work model to give every staff member a paid day off each week. All other

employment conditions, including remuneration, remained unchanged – so staff worked 30 hours but

were paid for 37.5, and were asked only to deliver the same amount of output as in a standard week.

Perpetual Guardian’s founder Andrew Barnes decided on the trial after reading several global reports

on productivity, for which New Zealand is one of the lowest-ranked OECD countries. Barnes said the

decision to test the new way of working was “the right thing to do. We want people to be the best

they can be while they’re in the office, but also at home. It’s the natural solution.”

Barnes introduced the concept of the four-day work week at an informal meeting with staff telling

them, “We’ve decided to try something reasonably radical. We’re going to do a trial where you will be

working four days a week.” Wearing a headset and microphone he met face-to-face with the Auckland

office and communicated his message to all Perpetual Guardian staff nationwide. Barnes said to staff,

“I’ve no idea how we’re going to do this but I need you team-by-team to tell me how you’re going to

deliver the same level of productivity in four days as opposed to five.” Teams were given a month to

prepare with regular meetings held so teams could plan for the change and choose which day they

would have off. On the staff intranet staff shared their thoughts and came up with best ideas as to

how they could manage and save time. This proved a valuable interactive way for staff to share and

collaborate on ideas. As far as branch teams were concerned each team determined their own style

and established the best process to enable ongoing cohesion and engagement. The once a fortnight

staff newsletter from CEO Mark Jephson also kept staff regularly informed about developments.

Head of People and Capability (HR) Christine Brotherton said of the productivity trial, "If employees

are engaged with their job and employer, they are more productive. The trial was a valuable and timely

way to test our theory that efficiencies will come with more staff focus and motivation.” Brotherton

said for some clients, getting the message out was easiest with a phone call, but many clients received

hard copy letters outlining the proposed trial. Continual communication with clients was maintained,

sometimes on a weekly basis, this involved email and phone calls.

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The company embarked on the trial with the expectation that it might not provide all the answers but

could be a big step towards making business work better for people and the bottom line. In order to

make the trial useful on a local and global economic and productivity scale, Perpetual Guardian

engaged academic partners The University of Auckland and Auckland University of Technology (AUT)

to measure the outcomes of the company’s employee engagement and publish the results. Based on

the outcomes, Perpetual Guardian initiated the Four-Day Week on a long-term, opt-in basis across its

business from 1 November 2018. Brotherton says that traditionally the company has not been seen

as upbeat or trendy, but as ‘old school’, however since the trial a new demographic of worker has

begun to join the company with younger staff attracted by the more ‘funky’ image as branches moved

to new buildings fitted out with modern colour schemes, and original New Zealand art on the walls.

Viewpoint of the Managing Director: Andrew Barnes

Andrew Barnes, owner of Perpetual Guardian, concedes he’s “more a leader

than a manager” He describes his personal management and leadership style

as “open, collegial and delegation-driven.” He communicates constantly to get

his management message across the organisation. “I walk the talk. I do not

just lecture, I do the stuff. I immerse myself in the business to get into people’s

hearts and build a collegiate culture,” he says. “And I have no time for

organisational politics.”

“I lead. I make the rounds of the offices, meet clients and hold large and small staff briefings and

morning teas. I talk constantly about our collective mission, about my vision of the future and about

what we can accomplish. Hearing peoples’ stories may be considered a small behaviour but it has big

consequences.” Perpetual Guardian’s mostly mature staff enjoy the contact and Barnes felt ‘topped

up’ and energised by the communication at grass roots level. One staff member from a provincial town

commented that he’d been with the company for 17 years but had never met a CEO or owner.

Barnes adds “I deliberately wear jeans and casual clothes to the office because I am trying to convey

the message that we are traditional but also modern and new. I am the face, the change agent and

the leader of the organisation.” His mantra is “Leadership is about effective communication, if you

can’t communicate effectively you can’t lead.”

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Viewpoint of the Head of HR: Christine Brotherton

“When it came to leadership, we were very successful in

empowering our staff to find their own solutions as to how

they were going to continue to support our clients, while at

the same time coming up with their own productivity

measures.”

The starting point for our Four-Day Week trial was the desire to have a conversation about productivity

and to get people thinking about how they were working and ways in which they could work smarter.

We wanted to establish if there was a connection between employee engagement and productivity

so there was a big focus on looking at the sorts of things we do every day at work and the types of

roles we have. One of the most pleasing parts of the trial was that it did indeed kick off a conversation

about productivity and almost immediately had teams thinking consciously about what they were

doing and how they were doing it. Another key success for us was raising employee engagement by

40% when comparing pre- and post-trial results. AUT Professor Jarrod Haar stated this was an

unprecedented indicator of success and shows the power of trusting and empowering employees –

but also of rewarding them to focus on work in work time and recover outside of work time (through

the extra day off).

The aim of the trial was to determine whether the ‘carrot’ of having one day off per week at full pay

was sufficient to encourage staff to think quite differently about how they were working. While it

didn’t come as a surprise that people felt good about having an extra day off per week, we certainly

weren’t expecting the extremely positive results we received from both the quantitative surveying

and also the qualitative surveying of the focus groups. These measures were a key factor in deciding

to roll out the policy full-time across the company. The trial engendered a lot of goodwill and energy,

and staff enjoyed the policy being rolled out over the summer months. There was also a strong sense

of responsibility among staff to work with their clients and customers and to make sure everything

continues to work as well as it did during the trial. The feedback from external clients, both corporate

and individual, was very positive.

It’s important to be collaborative in designing a flexibility trial or policy. Leadership is crucial to success,

and the guidance of Andrew Barnes and senior managers was important in demonstrating how the

Four-Day Week could work in practice; but a flexibility policy is unlikely to work as a top-down or

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authoritarian construct. The success of the trial came from empowering staff to come to their own

decisions and to trust them to make the right call with regards to their customers and team members.

We created a policy that could flex so that depending on workloads, projects or customer

requirements, there were times when staff didn’t take the ‘rest’ day. But we empowered staff to make

that decision themselves as to whether it was the right thing to do or not. It’s important that leaders

and managers take a coaching and supporting role as opposed to being directive.

Another critical aspect of the policy is coming up with productivity measures that are individualised

for different people and parts of the business. For many staff this wasn’t something they’d ever

thought about, so even beginning the conversation and encouraging them to think consciously about

productivity measures was valuable. The trial enabled us to have a deep conversation with each staff

member so that they could understand what their value was in terms of output. It helped everyone

to become conscious and deliberate about what they were doing and why they were doing it.

From the beginning of the trial it was important to ensure staff didn’t extend the work hours of their

four days of work and that they stuck with their normal contracted hours. The policy was about

focussing on work efficiencies in order to get an extra day off and not working different hours. This

meant that staff still accrued annual leave at the same rate they were contracted under their

employment agreements.

“The trial immediately kicked off a conversation about productivity and had teams

thinking consciously about what they were doing and how they were doing it.”

What the trial showed us is that traditional ways of working and regulated hours of work are becoming

less relevant in today’s society and will become even less relevant in the future. Initiatives like the

Four-Day Week give workers the gift of time and the gift of being able to look after themselves and

reconnect with families, and we know policies like this are starting to make a difference in people’s

lives.

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The CEOs viewpoint: Mark Jephson

My initial reaction when I first heard the company was trialling the Four-

Day Week was that it was an interesting concept but one that did raise a

few questions, especially from a shareholders’ perspective. If everyone’s

working full-time, five days a week, then why would you reduce the

number of hours worked? Yet, in every workplace there is some excess

capacity and that for every worker, there is a part of your workday where

you’re not as productive as you could be.

The first thing we did before implementing the trial was give our clients a heads-up as to what was

happening and give an assurance that they would continue to receive the high client service they’ve

come to expect. We did a lot of pre-planning to make sure there was always coverage during our

standard business hours in terms of relationship managers and analysts. This meant making sure staff

took different ‘rest days’, never put their out-of-offices on and always ensured urgent emails were

forwarded on to someone who could deal with it. The belief was that clients should never be affected

or have to wait because of the Four-Day Week. It’s important that the introduction of a policy like this

must benefit both the shareholders and the employees. The best way of getting the best out of your

people is to not be too prescriptive; let your team come up with a way of making it work. Of course,

they have to stick within the parameters of your company’s values and vision, but really there is no

rule other than you’ve got to be accountable; it’s really is up to you to make it work.

We’ve learned about other ‘better’ ways to work besides the traditional nine-to-five work week, that’s

not necessarily the most productive way. If you don’t accept that concept it’s probably not worth

trying to roll out a similar policy because you’ve got to be open-minded to start with. One of the best

things for me as a manager is that it really made me think about the expectations I have of my team,

what it is that we want to achieve and how we can know that we’re actually achieving it. You need to

be consistent in your message that this is a ‘carrot and stick’ policy in that it does come with an

expectation from management that employees will meet, if not exceed, performance expectations. It

needs to be clear that if performance expectations aren’t met, there might be other people out there

that would be better suited to this type of flexible work policy. The benefit of a flexible work policy is

that you’ll know people will want to work for your organisation because you’ve created a high-

performing at-work culture which also offers a really good work-life balance. From a business

perspective this means you’ll retain good talent and you’ll give existing people an opportunity to

improve and get better – so long as they’re willing to turn up and really do a great job.

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A Branch Manager’s viewpoint: Tammy Barker

“Most employees are struggling to achieve a successful work-life balance,

and to have one ‘rest day’ per week really helps people perform to the best

of their ability at work while having a fulfilling life outside of work.”

When I first heard about the Four-Day Week I was a bit suspicious; I wondered what the catch was.

But as we were taken through the proposal, I realised that there wasn’t a catch at all, it was a win-win.

My experience of the trial was two-fold: how things changed at work and how they changed at home.

At work, the introduction of the Four-Day Week trial represented a new approach to work in that I

constantly challenged myself to do things differently. I found, rather than multi-tasking, I would focus

on one task from beginning to end rather than just jumping from one thing to the next. As a result, I

actually finished projects before moving on to the next one, so that at the end of the day I had

accomplished more. My productivity increased simply by being more aware of my work processes and

thinking about why and how I was doing things. Yet, I didn’t feel more stressed at work because I really

focused on the tasks at hand and, I had the extra day off to compensate for the increased work rate.

From a personal perspective it was great. I took Wednesdays off, which meant I had two days of real

focus on work, then a day off, then another two days. This worked well. I’ve got two small kids so to

have an extra day to do home stuff was incredibly useful. I used my ‘rest day’ for catching up on home

admin rather than doing anything new. I did things like grocery shopping without the kids and

attended personal appointments that I normally do at the weekend. The advantage was that it freed

up my weekend to spend with my family. There wasn’t really any downside to the Four-Day Week.

Most employees are struggling to achieve work-life balance and to have one ‘rest day’ per week helps

people perform to the best of their ability at work while still having a fulfilling life outside of work.

It’s a privilege to be part of the four-day workweek and its implementation has certainly raised morale

across my team and the whole workforce. From an employer point of view, the biggest concern is that

in time people’s productivity will slip back. To guard against this we’ve spent a lot of time making sure

every person in every team has their own plan as to how they’re going to maintain and improve their

productivity, how people will be held accountable to those plans and how we measure productivity

using real outcomes. What we’ve seen is that if you bring people in from the beginning, you get better

buy-in and a lot less ‘us and them’ with everyone working together as a team. We’ve been treated like

adults and I think as a result everyone is behaving like adults and is prepared to overcome any

challenges that might occur.