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I'm trying to change the way we do things at our company of 10 people. We can't afford, or better we don't need a full time HR person. Most of our company comprises of developers, and historically every salaried employee was required to log their hours on a daily basis.

There is some work we do that is directly billed to clients, both other tasks that are not. We even track things like time spent on email, meetings, documentation, etc. Trivial tasks that I think shouldn't be tracked as they don't offer much value to us.

It turns out that every employee absolutely hates doing this as it's a time suck in and of itself. Even the owner of the company doesn't like it, and he came up with the policy.

I'm looking to completely change the way everyone thinks about this, but I need help.

Other than tracking time spent on billable client work, I think we can get rid of tracking other trivial tasks. In my mind, it doesn't make sense for salaried employees. It's implied that you're working 40 hour weeks anyways. It gets a little ridiculous, especial for non-developers to enter in hours every day. Imagine a sales, marketing, or support person having to log hours every day. It makes zero sense to me.

The main issue we have is you get paid for 86.67 hours every 2 weeks. If you work less than that, historically we were asked to make it up. If you work more, you bank that time.

I'm just wondering how other small HR free companies handle tracking vacation, sick days, and overtime.

ADDENDUM:

Our development and testing teams usually telecommute, and usually don't work a 9-5 day. Developers often work late at night without access to other teams.

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@Chad does StackOverflow go into that bucket? :-) –  enderland Feb 1 '13 at 20:07
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You need to be extremely careful with statements like "The main issue we have is you get paid for 86.67 hours every 2 weeks. If you work less than that, historically we were asked to make it up. If you work more, you bank that time.". If you track salaried employees this way in some cases they can be ruled as hourly employees and you'd be forced to pay any and all 'overtime' they may have worked in the past. –  Stephen Feb 1 '13 at 21:39
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um salaried employee with fixed hours of work does sound unusual - as stephen says are you not risking problem with exempt/nonexempt. Why do you need to track time so tightly for professionals especialy for such a tiny company. –  Neuro Feb 1 '13 at 22:26

3 Answers 3

Really if it takes anyone more than five minutes a day you are doing it wrong. Just what are you doing right now that makes this take so long?

Do you track projects in some kind of Project management system? Most of those have a time tracker feature. Then you only put in time against a project you worked in and leave the rest alone. Then just create a project for other work and let people put it in in one lump sum if you don't need details. So 3 hours against project 1, 2 hours against project b and 3 hours of other. Takes five minutes once you have a good PM system. You need this by project not only for billing but to able to forecast how well you are doing at estimating vice executing. You need to think about what are your needs as you grow as you design your system. Set up a report to id anyone who is under hours for the pay period. If you don't want a full blown PM system, use a bug tracker and enter each major project as a bug (we did this one place where I worked)

It is important to make this a required daily input because it becomes a time sink (and a PM nightmare because you have no idea how you are tracking on projected vice expended hours) when people delay doing it and then have to put into a whole month at once to be able to bill the client). I track my time in 15 minute increments and work up to 10 projects in a day (I'm a cross function kind of person who also does some production support) and it still never takes more than 5 minutes to do on a daily basis.

While people might not like time tracking, it is a necessary step especially as you grow eventually you may get people who won't put in the time and because they are working from home, it may take quite sometime to find this out without time tracking. The time sheet is your first clue. It is also proof when something is wrong.

Plus if they are supposed to be working project A and not much was accomplished and you see that they were working on project b or on other stuff, you can then get the priorities refocused fairly quickly with daily time tracking. If you find that someone put 30 hours against other and he worked from home all week and project A that he is assigned to is running late, then it is useful to have the numbers to have a talk with him. Even if all your employees are not slackers now, you have to have systems in place to be able to identify and deal with the slackers who may eventually get hired. You can't always tell who will be a slacker in advance.

People will whine that it isn't the hours I put in but what I accomplish but that is BS so don't accept that as an excuse to not track time. If you accomplish X,Y,Z and work 20 hours and I pay you for forty (yes even salaried people are supposed to work 40 hours), then you should have accomplished X,Y,Z AND A,B,C and yes you are a slacker who should be fired.

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FYI - (applies to US only) The text of the Fair Labor Standards Act (FLSA) in regards to salaried employees says "The normal work week for a full-time employee is considered to be a minimum of forty hours, however, greater emphasis is placed on meeting the responsibilities assigned to the position rather than on working a specified number of hours." –  Dunk Feb 11 '13 at 22:01

The most efficient way is to stop doing it. It's a silly, meaningless concept.

The fact that you require people to work 86.67 hours per pay period is an excellent example of that. Why is the number of hours they are sitting in a chair some how a meaningful metric?

Are clients hiring you to act busy for periods of time, or to accomplish a task? My guess is the latter.

As such, start billing that way. At the very least, stop billing at the micro-level .

I attended a talk by Clement Mok many, many years ago where someone asked him how he billed his firm's time. He said they bill in 4 hour increments, and even then, he'd prefer 8 hour increments.

He stated that "you can't do anything of any worth for a client in less than 4 hours" and I tend to believe that.

Granted, it all depends on your business. If your business is support and clients insist on paying only for time worked, then things get tricky.

But, in general, I think the best solution is to try and get out of the rather silly habit of equating value with time spent on something.

As for tracking vacation and such, again, don't. Trust employees to get stuff they need to get done, and trust them to take vacation when they need it.

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Even if you are billing clients a fixed price for a piece of work, tracking time spent is still important. You're basing your fixed price on an estimate of effort required, and you need to know how accurate your estimates are. If you're underestimating wildly, your fixed price quotes are going to send you broke. –  Carson63000 Feb 2 '13 at 7:55

To keep it simple, I would probably just make a blank Excel spreadsheet for each person to fill out and send back; it would just have Monday-Friday along the top and each of your projects and other tasks along the sides.

Simplify tasks as much as possible - just have one line for "other" to keep track of things like breaks, email, documentation; track vacation/sick days as one line as well. Let everyone know your expectations ("Keep track of things to the nearest hour/half-hour; I won't complain as long as you're tracking 40 hours a week", etc.).

The point to make with everyone is that this is to help out with accounting, and it should take up no more than 5-10 minutes each day. Stress that you're not trying to catch anyone with this (you're not going to call someone in if their "other" category is 2 hours one day), but that you need the data to be as accurate as they can make it.

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