Mike Malatesta

Entrepreneur | Author | Coach

Entrepreneur | Author | Coach

The Coffee Break (333)

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In this episode, I talk about the origins of the Coffee Break – it’s probably nothing that you would expect – how it was initially an experiment that ended up going wrong.  

You won’t want to miss this episode. Enjoy!

To connect with Mike:
Website: https://mikemalatesta.com
LinkedIn: https://www.linkedin.com/in/mikemalatesta

Full transcript below.

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Transcript

The Coffee Break (Episode 333)

Thu, Oct 20, 2022 10:13AM • 15:11

SUMMARY KEYWORDS

breaks, paid, coffee breaks, weavers, coffee, people, goal, phil, podcast, modern day, labor, bonus, company, expectation, goal setting, employee benefit, convoluted, story, article, guess

SPEAKERS

Mike Malatesta

Mike Malatesta  00:24

Hey, it’s Mike. And welcome back to the How’d It Happen Podcast, the solo series. This is a solo series. This is my Friday solo episode. Every Friday, I do a solo, where I talk about something that interests me, either an idea that I’ve had or I’ve been exposed to, a person I’ve met, something I’ve run across, or something that just made me think. And I hope you enjoy these sort of short, usually less-than-10-minute episodes. Because I think that if something interests me, it will probably interest a lot of other people too, especially people who listen to this podcast. So I hope that’s the case with today’s episode. And the name of today’s episode is “the Coffee Break.” The Coffee Break. 

So in full disclosure, I don’t drink coffee very often. It’s actually rare that I will drink coffee. I will drink it, if it’s the only choice that I have. Or I may not, yeah, if it’s the only choice that I have. I’m going to stay, I’m going to stick with it right there. And I’ve always wondered about coffee too, because even though this story is gonna go back to the origin of the coffee break, coffee breaks now are sort of so ubiquitous, it’s like, you have coffee breaks all the time, right? People are drinking coffee all the time. and to a lesser extent now, but still, you know, smokers have more, you know, they have breaks, you know, yet because you can’t smoke inside, you have to go outside to smoke. So this leads to coffee drinkers haven’t been shipped outside yet, like the smokers have. But there’s still a lot of breaks. But like I said, it wasn’t like that forever. In fact, there was no such thing as a coffee break up until, you know, maybe the 1940s, from what I understand. 

So do you know how coffee breaks came to be? And if not, you’re going to because I am going to share it with you today. And it’s kind of a kind of an interesting little history lesson. And then I’m going to pull it into a modern day example of employee benefits. So that’s really what the coffee break was started as, an employee benefit. And according to a Time Magazine article from 1955, from October 1,0 1955, called “Business-the Unpaid Coffee Break.” This is how it began, a fella named Phil Greinetz owned a time making and weaving business in Denver, Colorado. And during World War Two, he lost some of his best Weaver’s to the war effort. And you replace them with the only labor that was available at the time. And that labor as it turned out, were mostly elderly women, older women. And the women were really great weavers, which made them very happy, but they tired easily. According to the article’s writer, this isn’t me saying that. Although I’m assuming it’s true. And that the ladies’ suggestion, Phil experimented with providing 15-minute morning and afternoon rest breaks, during which he provided, wait for it — Coffee. And here’s what happened, at least according to the article, production went up, and so did the ladyies’ wages. In fact, they went up by an average of $1.02 an hour, which is the equivalent of about $11 an hour in 2022. So that’s how they’re being paid. That’s how their wages went up. As a result, because they were paid by production, they were paid by the tie or whatever it was they were making, and not by the hour. However, this mutual Nirvana that both the company and the weavers thought they’d achieved from the coffee breaks, proved to be short-lived. And what happened was because the breaks were unpaid, technically, but really, I mean, you saw the increase in the pay. The US Department of Labor came along, maybe they got a complaint or whatever, and they paid a visit to Phil. And they told him he was breaking the rules, and that he had to pay the weavers for their breaks. Because I guess the, I guess the thinking was, they were being shortchanged on their wages by not paying them for the breaks, but of course, the increase in wages was a result of having the breaks was significant. So it was really beneficial to the ladies on the weaving team. And in what might sound like a very short-sighted response, Phil said, No, I’m not going to do that. He refused to pay for the breaks, and instead, he eliminated them. No more coffee breaks, no more rest breaks, no more production increases. No more wage increases for the ladies that were doing the weaving. 

And so you think about like, who won that? It seems like nobody won. And I’ll give a caveat before I bring a modern-day story into this. So the caveat is, that whole story is what was in the article. So I wasn’t there myself. There’s probably other circumstance circumstances or situations or extenuating this, that or the other that may have played a role in that story. But the interesting thing, I think, remains that the coffee break was an experiment. That was the workforce, the workers, this was the women’s idea, according to the article and, and something that really benefited them and the company. And as I mentioned at the beginning, there’s still coffee breaks, but it seems like people are drinking coffee all the time, no matter where they are, no matter where they’re working. But here’s a modern-day twist to that Department of Labor thing that happened to me. 

At one point, in the mid-2000s, or late, maybe mid-2000s, we designed a bonus program. And the bonus program was really predicated as a goal-setting and goal-achieving program. And it was something we designed to be available to everyone in the company. So maybe we had 120. Or let’s say we had 120 people at the time. And we did this quarterly bonus program where we would set goals every quarter for every single person in the company. And then we would make progress towards achieving those goals. And some were personal goals. A lot were goals were intended to support the overall goals of the company. So we did this and every quarter we do a review, we’d see how everybody did individually, these were individual reviews. And we would award people who had made progress with some money. And I felt like it was the best thing we ever did. Although it was a lot of work to do this every quarter. And I did get some pushback from some people that there was too much. But I felt like it was the very best thing we could be doing for people, that is helping them become goal-setters and goal-achievers. So this went on for a few years. And then we got a letter or a visit, I don’t remember from the Department Labor or I think was the Department of Labor made had been a State Department of Labor. And I guess, long story short, they determined that this bonus, which we had called a discretionary bonus because it was discretionary, it was not guaranteed, it was the result of of progress made on goal-setting and goal-achievement for each person. And not everybody got it and not everybody got the same because it was based on individual performance. But the government made the determination that since most people got it, it wasn’t really a bonus. But instead it was an expectation. And there’s a big significance to that. We were told that because it’s an expectation or a sense of expectation, at least as they define it, we owe them all the people who are getting the bonuses, or the bonus had to be applied to their hourly wage rate. And we didn’t pay overtime, properly based on that addition. It’s probably too complicated to get into, I’m just a podcast host, but the basics are, this was a program that I think almost everybody liked, they certainly liked the extra income they could earn. But I think more than that, they enjoyed the process of building their own capabilities through goal-setting and goal-achieving. And it was a benefit. And now we were being told that we did it wrong. Can’t just give people money, you have to calculate this and you have to calculate that and, ultimately, you know, what you’re doing is not discretionary. It’s creating an expectation for people and it really bummed me out because we had to pay a fine or make it right, quote, unquote, right with everybody, and then it just soured me on the whole thing. Sort of like Phil got soured on it, too. You know, it just soured me on the whole thing. And ultimately, we still maintained the goal-setting and goal-achievement, but we weren’t able to reward people with money anymore because of it. And I often think to myself, did someone complain about not getting this overtime calculation, right, even though they were getting the other money or, and I’ll take responsibility for not, you know, administering it, I guess, to the letter of the law, but it really seems silly. That a benefit that put more money into people’s pockets and had no impact on how they’re being paid hourly, if they were paid hourly, or their overtime based on their hours worked or anything got completely tripped up by this convoluted calculation. And ultimately, it ended up eliminating the financial reward of the goal-setting. I always thought that was a bummer. 

So I guess the lesson here is, you know, it all depends on who’s looking at something. Like, in Phil’s case, his weavers and his company, were doing great as a result of giving this experiment with a coffee break a try. Then someone else came in and said, No. It’s not, you know, it’s not right. And the same thing kind of happened with us. And I just wonder who’s right. You know? Who’s right? And what’s the point, I guess? Who’s right? And what’s the point of correcting it? Like, what’s the point of, but I guess everybody has their role to play and their job to do and so I appreciate that. And yeah, just something to think about. Anyway, the coffee break. 

That’s the episode. Thanks so much for listening. I hope you got some value out of this and I hope I didn’t go too convoluted on you. And if you’ve got a story like this, or you liked this episode, you know, share it, let me know. I’d be interested. If you’re not a subscriber to the podcast, please consider going to your podcast app, Apple, Spotify, wherever you listen, hit the follow or subscribe button. I’d love to have you every here every Friday and every Monday where I do a longer form podcast and have a conversation with, you know, really successful people about how it happened for them, and more importantly, why it matters to you. And visit my website, Mikemalatesta.com, Sign up for my newsletter and you’ll get something every Thursday from me as well. Until next time, please maximize your greatness.

Mike Malatesta

Mike Malatesta

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I help entrepreneurs get unstuck, take back their power, achieve their life objectives, and create the futures they want.

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