Factors Contributing to Decreased Productivity
A number of factors can contribute to decreased productivity in overworked employees.
Sleep Deprivation and Fatigue
Overwork and sleep deprivation tend to go hand in hand, and it is well known that sustained reduced sleep can have serious detrimental effects on cognitive and motor capabilities. The National Institute of Health reports a study performed by researchers at the University of Pennsylvania in which it was shown that subjects who went with only 4 to 6 hours of sleep for 14 consecutive days showed cognitive performance deficits equivalent to going entirely without sleep for 3 consecutive days. That is to say, their ability to perform normal cognitive tasks such as paying attention and reacting to stimuli, much less to solve difficult problems or think creatively, were decreased substantially. The study notes, interestingly, that its subjects "reported feeling only slightly sleepy and were unaware of how impaired they were." This is a possible explanation for the fact that overworked employees often help to perpetuate long hours, weekend work, and so on. Further studies have shown substantial sleep deprivation to have effects comparable to legal drunkenness. Thus, while employers do not allow their employees to come to work drunk, they often perpetuate working conditions like crunch mode that yield the same net effect.
Stress and Depression
It is also very common for overwork to lead to increased stress and depression among workers. Whenever more time must be devoted to one activity, it must be taken from some other activity. In the case of extended work hours, time that would have been spent sleeping, cultivating interpersonal relationships, and engaging in recreation is diverted to work. Decreases in the time spent on these activities have been strongly correlated to increasing incidence of stress and depression. Stressed and depressed workers tend to be both less motivated to perform their job functions and less able to perform them. A recent study published in the journal Medical Care has shown that, as would be expected, workers are substantially less productive when depressed than when not.
Necessary Tasks and Recreation
Certain tasks in life are necessary regardless of whether one has time outside of work to do them or not. For example, most people regularly need to perform tasks such as grocery shopping, running errands, paying bills, picking up children from school, shopping for gifts, and so on. Normally, people will find time outside of work to perform these tasks. However, overworked employees often have very little time outside of work, especially if they are required to work on weekends. As the number of work hours goes up, it becomes increasingly infeasible to perform these tasks outside of work. As a result, employees often attempt to fit these activities into their extended work hours. They will often take extended lunch breaks to run errands, leave sporadically during the day, and spend extended periods of time at work performing necessary tasks over the phone or on the Internet. Many overworked employees even spend time at work eating multiple daily meals. It is clear that such behavior will result in lower productivity.
Although we would guess that this sort of activity is not as much of a problem in industrial jobs, it is a huge problem in software development. People also seem to have a basic need to spend some time engaged in recreation activities on a regular basis. If they cannot take part in these activities outside of work, it is very common for them to try to fit them into work hours. It is extremely common in video game production studios, for example, for employees to spend a significant portion of every day engaged in recreational activities such as television and movie watching, video game playing, and extended casual conversation (reference).