Get ready for net loss of productivity

Brooke Pfautz realizes that sales at his Hunt Valley, Md., mortgage banking company could plunge during the NCAA basketball tournament that begins today.

But for the second year in a row, he plans to show the games on his office’s big-screen TVs and give a prize to the employee who picks the winning team.

“I want to have a good, fun, upbeat atmosphere,” he said. “You spend more of your waking hours at work, so you might as well enjoy it.”

His attitude is catching on, workplace experts say.

Recognizing that workers are toiling longer hours, while seeking to accommodate their most talented producers, many employers are becoming more tolerant of employees who use work time for play time or personal tasks.

Some employers like Pfautz are using the three-week NCAA tournament — one of the year’s biggest workplace diversions — as an opportunity to boost employee morale. Some firms have launched office pools themselves around such major sports events instead of leaving that to their employees.

Some bosses say they look the other way as employees peruse Nordstrom.com or book concert tickets so long as their work gets done and the company’s computer system is not threatened. Some firms make office equipment, including computers, available for employees to use for personal tasks during breaks. One public relations company encourages employees to write their personal blogs during the day, convinced the online journals will generate new clients.

These and other employers say that work time lost to Web-surfing, e-mail and phone calls is a small price to pay for stronger office morale, less turnover and higher productivity.

Companies are becoming more flexible and tolerant “because you’re not going to attract talent if you manage with an iron fist,” said Brandi Britton, senior vice president of OfficeTeam, a Menlo Park, Calif.-based staffing company. “And talent is so hard to come by.”

More employers also recognize that trying to stop personal tasks during office hours is almost futile — and possibly counterproductive.

“We don’t think it would be realistic to try to enforce a policy against personal use” of the company’s computers, said Angela Genaro, human resources director for Aliso Viejo, Calif.-based Merit Cos., a property management company that allows workers to use company computers for personal matters during breaks. “It is becoming more apparent that people need to get a few things done while they’re at work,” adding “we don’t have major abuse.”

Many employees say the trade-off works for them too.

“More and people are saying, without apology, that if you are going to be reaching me at 8 p.m., (then) if it’s 1 p.m. and I have to get something done that matters to me, I’m going to do it,” said Peter Rose, a partner with the marketing research company Yankelovich Inc. in Los Angeles.

With 24/7 e-mail and Internet access fuzzing the line between home and office, employees are spending as much as 36 minutes per day, or three hours a week, checking bank balances, arranging child care, watching TV and cyber-shopping from their desks, according a survey last month from OfficeTeam.

Thirty percent of Americans say they use the Internet at work to take care of personal business, according to a Yankelovich survey last year. But with workers fudging, “the percentage is probably higher,” Rose said.

Jean Washington, a legal secretary in a downtown Los Angeles law firm, says she makes doctors’ appointments and e-mails friends and relatives from work when she has a few minutes. She’s certain her attorney bosses do the same.

Some workers will spend as long as two hours a day tracking the NCAA tournament games, causing an estimated $1.2-billion loss of productivity nationwide, according to John Challenger, president of outplacement company Challenger, Gray & Christmas Inc.

But Challenger thinks bosses like Pfautz, who indulge their employees’ sports mania, are making a smart investment.

When employees had lifetime tenure, he said, co-workers came to know each other over time.

Now employees change jobs more frequently and companies increasingly rely on consultants and independent contractors — factors that work against building the personal ties that make a company successful.

Employers need to take advantage of opportunities to create those relationships, Challenger said, “and here’s a ready-made event.

“Why not embrace this event and use it?” he said.

In recent years, Pfautz watched as some of his 60 employees ducked out of the office to catch the basketball action on the local bar’s big-screen TV. They were “slow to return,” he noticed.

Last year, he decided to make the tournament into an office event, ordering in pizza and tuning the four plasma televisions in the office to the games along with the conference room’s projection screen. The winner of the office pool got a weekend trip to a nearby resort.

His employees, mostly young men, loved it, Pfautz said, and although sales still dropped during the tournament, his staff stayed in the office.

Other employers also use the tournament as a vehicle for building ties and morale. The Towson, Md., law firm of Hodes, Pessin & Katz screens the games in the office and provides snacks. The firm office pool, featuring cash prizes, now draws 70 percent of the firm’s 100 employees and is more popular than the annual summer picnic, according to partner Kevin Bress, who organizes the event.

“We kid about the fact that our retention rate remains high during March Madness because you have to be employed by the firm to collect the prize,” he said.

“I get to meet some of the people I didn’t know because they’re suddenly in my office door giving me their selections.”

But employers also say there are limits to their tolerance.

Six months ago, Bress said his firm installed software to block Web shopping and gambling, concluding that employees were out of control. Employers also worry when Web-surfing employees visit sites that can damage company servers or steal data.

Hackers often target major sporting events, said Cas Purdy, spokesman for San Diego-based Websense Inc., which makes software that can block security threats.

A couple of days before the Super Bowl, a Web site visited by many Miami Dolphins fans had data on it that could steal data from other companies, Purdy said. Another site launched around last year’s World Cup soccer tournament also wreaked havoc with companies, he said.