Accounting hours worked: pros and cons
When in conversations with IT people it comes to accounting for work hours, the holivor ignites instantly. And it doesn’t matter with whom to talk about this: the topic affects ordinary developers, team leaders and top managers. We offer for discussion our vision of the subject, taking into account the hours - maybe we will advance a bit in search of truth in the discussion process.
Where do the legs grow from?
As usual, it all starts with the structure of the person and the characteristics of his behavior. In psychology, there is a phenomenon called “CD gap”, where “C” is “competence”, “D” is “difficulty”, and “gap” is “gap”. When a person has a gap between his competencies and the complexity of the task before him - this is a big problem for him. As a rule, in such a situation, the brain tries to quickly come up with or take from the outside a set of simple rules to create the illusion of control chaos. The word "illusion" is written specifically, because a set of rules does not fill the lack of competencies, otherwise everyone in the world would have long been super-successful.
We apply science to a specific situation
Some IT company is growing, and suddenly its profitability starts to fall. Based on our practice of communicating with dozens of CEOs from different sectors of the economy, the most common reasons for almost all are the same, and there is no “suddenly”:
- the company is behind the market and does not update products;
- lack of marketing and positioning;
- the company has overgrown with not very useful employees;
- tops forget to count and plan profits;
- internal conflicts between key individuals;
- the company simply lost course.
Yes, sometimes there are subtleties, but the main reasons are given above.
So, the profit is falling, the shareholders are shocked, what to do is not clear. This is where the “CD gap” phenomenon is included: many begin to “patch up holes” and turn on the mechanism of repression - introduce restrictions, bureaucracy and other emergency measures (for details, see Prokhorov’s book “Russian Management Model”). Locally, this can give a small increase in profit, but in the long run it will lead to the departure of adequate people from the company.
Among the panic measures usually is tracking man-hours. Management wants to calculate inefficient employees using mathematics or simply implement it to make it like others do. But if you think about it - it makes no sense. Everyone knows who works well and who works poorly. And if they don’t know, there is a lack of competence.
Necessary and sufficient minimum
We do not claim that accounting for hours is not necessary at all, we believe that it simply should not distract people from work.
Yes, if you work in an agent structure (integrator, advertising agency, web studio), you will have to consider the budget for the project and, accordingly, the hours. There are only two reasons:
- in case of disputes with customers, reports on the time spent can be an argument in your favor;
- You can roughly understand the profitability of the projects.
The word “about” about the profitability of projects in agencies was written on purpose. Based on experience, it is possible to accurately calculate the profitability of a project only if the project team is completely isolated. For these purposes, it is best to separate it into a separate legal entity. Otherwise, any system of distribution of total costs will introduce its own error.
In our practice, we use four gradations of project profitability: “failure”, “soon failure”, “good” and “excellent”. This is quite enough to solve the management problem of choice: to abandon the project, just continue to work or actively develop relationships with the client.
To provide such a gradation, it is enough to introduce simple rules:
- based on the results of the working day, the employee distributes his 8 hours according to tasks;
- distribution quantum - 1 hour;
- no fines and bonuses to logging the actual time are not tied.
The most important thing is to convey the reason for introducing accounting to all employees and make sure that they understand it. We are all people, we can agree with everyone if the goal is good. Beginners just need to immediately be accustomed to the fact that there is a record and this is a regular simple procedure on how to brush your teeth 2 times a day - as a rule, there are no problems with beginners.
In my opinion, there are two viable methods of doing business in IT:
- creation of long-term expensive projects on order (it does not matter, the customer is internal or external);
- line production of cheap unified projects.
In both cases, the problem of accounting for actual time is not worth it for obvious reasons. In the case of an expensive long project, the team simply works entirely on one project. Calculating the consumption in this case is a trivial task. In the case of the stream, most tasks should be automated or described in detail by instructions, as in the kitchen in network pizzerias. The share of probabilistic creativity is minimized, and KPI for employees becomes simple - how many tens or hundreds of nuts he screwed in a month. Profitability in this option will be provided by two indicators: the speed of the process, the volume of incoming applications and the smooth coordination of their growth.
All intermediate options of the organization, as a rule, are unstable due to the need to constantly juggle resources and difficulties in planning the workload of employees. If your IT company is in such a state, this is an alarming sign and it is time to think about positioning and strategy.
Yes, sometimes hours are needed, but if it’s already implemented, do not tighten the nuts too tight.
But, in a good way, with the normal organization of the business, there is no special need for logging hours.
I’m sorry, I forgot to tell you what smart enough tops do when profitability drops and a “CD gap” arises. It's simple - they make up for the lack of competencies so that they are enough to solve current problems. Those. either hire cool specialists in the staff, or involve external consultants.