Hours are a poor measure of productivity for knowledge workers

Mike and Matt have the same title at the same company. Mike comes in at 7am and doesn’t leave til 9pm. Matt strolls in at 11am, takes a two hour lunch, and leaves at 4 pm.

Who is perceived as the better worker?

Answer: Mike. He gives up his social life to be at work the whole time. This must signal he’s dedicated.

Here’s the real question though, who is the better worker?

….

The correct answer is: you don’t know, there’s not enough information. Matt can get more done in 5 hours of focused work than Mike can do in 14 hours. Matt might also be working from home, or thinking about how to solve a problem when he’s not at the office. Hours worked and face time do not equal effectiveness or efficiency.

Imagine that both you and your grandfather are given the assignment of finding out the daily operating hours for 5 major museums throughout the country, and your grandfather doesn’t know how to use the Internet. Chances are, you’d be done in 15 minutes and it would take Grandpa 1-2 hours.

In a team or large organizational setting, what’s a better measure of productivity than hours?

  • Piecemeal work – Every 100 insurance claims (or whatever) that you process pays you x dollars. For longer, more project based work, perhaps completing the project with detailed requirements, on time, or ahead of schedule results in different payments. Hours can still be used as an estimate.
  • Payment as a percent of value added – If you bring in $10 million of business for your company, you receive a certain percentage of this amount. This might be harder to do at lower job levels as more menial things don’t necessarily add value but are still required…
  • Competition based – For tasks that are repetitive (i.e. accounts payable, etc) the person who does the most piecemeal based work (with the least amount of errors) gets paid the most money. The second most productive gets the second most money. These stats could reset every pay period, etc. It would be a tournament style environment.

What other ways of measuring value can you think of?