Taking Employee Morale to the Next Level

The Chicago-based web-application company 37signals just announced in a blog post that they are conducting a set of Workplace Experiments in an attempt to make their company “one of the best places in the world to work, learn, and generally be happy.” So far they’ve implemented three new policies:

  1. Four-day work week: after a summer of Monday-through-Thursday work, they realized that they were getting roughly the same amount of work done as they had when they were working five days a week. So why not enjoy three-day weekends?
  2. Funding employees’ passions: If people want to pursue a hobby or interest or whatever, 37signals will help them for it, as long as they blog about what they’ve learned.
  3. Discretionary spending accounts: All employees are getting a credit card so they can buy books or software or attend a conference without having to ask first.

They are a small company, with only 10 employees. They’ve been hugely successful over the past few years, and their small size is intentional. They’ve repeatedly spurned offers of corporate buyouts and huge sums of venture capital. Their main tenet is keeping things simple — from the software they produce to the way they run their company. Their outspoken, rebellious attitudes have garnered them a huge devoted following as well as quite a few critics.

I’m wondering what my friends and family — and others who happen to read this blog — think about what 37signals is trying to do. Are they being too idealistic? Are they on to something big here? Are their “workplace experiments” applicable to other companies, or is there something unique about 37signals that lets them get away with this? Is this kind of thing a luxury that very few companies can afford, or is it something that companies can’t afford not to do if they want to be successful to the extent that 37signals has been?

By the way, my last few entries haven’t generated any comments, so I’m not even sure if anyone is reading this anymore. I know my writing has been sparse lately. I’m hoping to post a bit more frequently now, since I’ve freed up a little time for myself.


Turns out my self-pity about not receiving comments was premature. A recent surge in “comment spam” forced me to tighten the moderation controls, which resulted in a few perfectly legitimate comments being labeled as “junk.” I’ve restored those comments and changed the controls again to what I hope is a better level.

Also, Kevin mentioned the problem of customer service in a comment below. I failed to mention this in my post, but the 37signals folks have a customer service rep who has not yet shifted to the four-day work week. They’re looking to hire another rep so the two can stagger their on-call days. You can read more about this situation from the current customer service rep herself.

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8 Responses to Taking Employee Morale to the Next Level

  1. Drew MacDougall says:

    Sounds great as long as you work for that company. What happens when you switch jobs and work for another more traditional company? Incidentally, I did submit comments for your Cornel West posting but for some reason they were not posted….

  2. Kevin says:

    I’m totally in favor of the 4-day work week and I do think that could be a great recruiting tool. The hobby and credit card ideas, while generous, are much of the same that is already available.
    The shortened work week, however, does seem.. infeasible. In most (if not all) businesses don’t we demand enhanced access? I called my bank last week at midnight on the off-chance they were open to order new checks – not only were they open, their vendor, Deluxe, was also open and taking calls. Clearely 37signals doesn’t have to go that degree, but if I was their customer I’d get pretty annoyed, I think, if I could never, ever get a hold of someone during 8-5 on Friday.
    With that being said, I think that perhaps the arrogance (boldness?) they display in creating such a schedule holds their ultimate work product to a significantly higher standard. In other words, “yeah, they’re never there on Friday, but they are so much better than everybody else so I still work with them.”

  3. As an employer, I would hope that by paying my employees a wage I would already be helping to fund their passions. Take your paycheck and buy that bonsai you’ve always wanted! Take that trip to Branson! Learn that language!
    Seriously, the reason I liked 37signals the moment I visited their site is that their product names have only one capital letter each. Seriously. The fact that they didn’t name them BaseCamp, BackPack, CampFire and HighRise makes me way more favorably disposed toward them. I just hope they’ll work on my NetWork…

  4. Karl says:

    Drew, very interesting point about employees moving to a different employer. I suspect it would be pretty rough.
    Kevin, the access you mention would definitely be a concern, but it looks like they have that covered. Please see my update to this post above.
    Andrew, I know what you mean about the superfluous capitalization thing. Actually, though, I prefer all my compound words to be lowerCamelCased, now that I’ve oUtGRoWn sTUdlyCaPS.

  5. Dad says:

    Over 30 years ago, Norgren Company in Littleton, Colorado instituted a 4-day, 37-1/2 hour work week on their manufacturing side, but found they needed to maintain 5-day customer service. They used it as a recruiting tool, and it was very popular with their employees. As far as I know, they still do it. This was not without its problems, since they had no way to respond to emergency shipment requirements from their distributors.
    Someone indicated that 37signals was using those other perks for their PR value, and I tend to agree. How about simply paying people generously and letting them dispose of the income however they want? Also, how about asking people to put in 40 hours per week, on a schedule of their choice. 10 hours a day X 4 still gives everyone who wants it a 4-day work week, right? Flex time is a great tool, I can say from experience.
    By the way, I hope that selfless, workaholic customer service person stays well.

  6. dean says:

    This sounds great. It reminds me how it use to be a long long time ago when businesses use to be closed on Sundays and some of them on Saturdays. Banks hours were 9am – 3pm Monday – Thursday and 9am – 6pm Fridays. The way customers are now, they want you open 24/7. I could work for that company. Wait a minute I like my job better, come and go as I please, work when I want to work, I just wish the pay was better.

  7. jen says:

    Sounds like the perfect business model for structure to follow.

  8. Scott says:

    These sound like they would work only for a company of 10 employees. The atmosphere in such a place would be more “small-townish.” For example: an employee at a small company where everyone knows each other well would be less likely to abuse the 3rd item listed (discretionary spending accounts). If a large corporation tried this, they might see people spending way too much because they feel they are lost in the corporate mind trap, commonly expressed by the statement, “I feel like I am just a number rather than a person.”

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