Wall Street investment banks have found the key to getting employees to work longer and harder: Give them the power to set their own hours and time off.
Highly educated employees given autonomy over their own schedules end up working harder because they want to prove who can put in the most time at the office, University of Pennsylvania professor Alexandra Michel found (PDF) after spending 12 years studying the work habits of young executives at two large investment banks. Bankers, software engineers, and lawyers—so-called knowledge-based workers—often work more than 100 hours per week to the detriment of their health, even when nothing urgent demands their attention, she says.
When employees feel they are required to work more, it motivates them to work less. When given more power to set their own pace, young bankers choose to work longer hours, take less vacation time, and sacrifice personal needs, Michel said in a study published in the summer issue of The Sociological Quarterly. Quoting one of her study subjects, Michel wrote: “When someone left before midnight, you’d hear comments like ‘half a day today?’”
Some bankers train themselves to sleep in spurts a couple times a day to maximize their time awake. The long hours and lack of sleep lead to early burnout rates in investment banking; the average banker lasts seven to nine years and typically leaves by age 35, said Michel, who began her career at Goldman Sachs Group (GS).
“Starting in year four, bankers started to experience sometimes debilitating physical and psychological breakdowns,” Michel said. Many suffered from chronic exhaustion, insomnia, back and body pain, autoimmune diseases, heart arrhythmias, addictions, and eating disorders, she found. The brutal work schedule also began to impair judgment, creativity, and ethical sensitivity, she said.
Even when bankers eventually left to pursue a better work/life balance in other industries, they couldn’t seem to leave their brutal work schedules behind, she found. And they made life miserable for their new colleagues.
They implemented practices, Michel said, that sometimes had the “unintended consequence of causing people to work excessively hard.”