The Problem with "Man Hours"

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I've never been comfortable with the concept of "Man Hours," not that it's a gender issue, but rather it implies ignorance of how time is used in the work place and fumbles away some simple management concepts needed to run any business, namely accountability and commitment.  Actually, I thought the "Man Hour" concept disappeared with the passing of the 20th century, but it appears to be making a comeback.

The fallacy of the "Man Hour" concept is that it assumes a person is working productively 100% of the time.  This, of course, is hardly the case in any company.  Workers are either working on their assignments, be they what they may, or there are interferences keeping them from their work, such as meetings, phone calls, e-mails, reading, breaks, etc. Time spent on work assignments is referred to as "Direct," and time spent on interferences is referred to as "Indirect."  The relationship of Direct to Indirect time is referred to as an "Effectiveness Rate" delineating the use of time during the work day.  For example, in an office environment, 5.6 hours are typically spent on Direct work, and 2.4 hours are typically spent on Indirect interferences (assuming an eight hour business day), or an Effectiveness Rate of approximately 70%.  In no way should Effectiveness Rate be confused as an efficiency rating; the two are NOT synonymous.  Whereas an efficiency rating measures how well someone performs a task in a given time, Effectiveness Rate simply measures the use of time during the work day.

Effectiveness Rate teaches us that a person cannot be 100% effective all the time, which is at the crux of the problem with "Man Hours."  Let's go beyond this though and show how this simple concept should be applied in the work place.  For example, Direct time is the responsibility of the individual worker to manage, and Indirect time is the responsibility of the manager to manage.  Both Direct and Indirect time should be recorded either using computer software (such as a Project Management system) or with a paper time sheet.  To make this work, the individual must participate in the estimating process of an assignment.  Instead of an estimate being forced on to a worker, as in a micromanagement scenario, the worker is asked to consider the complexity of the assignment and make a personal commitment in terms of the Direct Hours needed to complete the task.  As work progresses, the worker posts his/her time to the time sheet/screen and updates the amount of time remaining on a given task, not in terms of "percent complete" but by the number of Direct hours remaining (aka, "Estimate to Do").  This emphasis on estimating and reporting Direct Hours means the individual must supervise him/herself, thereby the manager spends less time supervising the worker.  In other words, workers are treated like professionals and are expected to act as such in return.

Because the manager is responsible for managing the work environment, he/she monitors and controls the worker's indirect time.  Again, it should be remembered that a person cannot be 100% effective.  If pushed too hard, the worker may start to make mistakes or accidents which would certainly be counterproductive.  This is why, for example, Japanese assembly lines will stop periodically to allow workers to back away from their machines and briefly perform some basic exercise before resuming their work, thereby clearing their heads.  The exercise is most certainly an Indirect activity that keeps them from their tasks, but it refreshes them and allows them to refocus.

In the average office, each person will have a different Effectiveness Rate which the manager will monitor.  Again, there is a big difference between Effectiveness Rate and an Efficiency Rating.  To illustrate, a novice worker may have a high Effectiveness Rate, but it may take him/her more time to perform a task than an experienced worker who might have a lower Effectiveness Rate.  Here, the manager must consider the skills and proficiencies of the workers when selecting personnel to perform a task.  For more information, see my paper on
"Creating a Skills Inventory."

One of the main benefits of Indirect Time, is its use in calculating schedules.  For example, if 100 hours have been estimated to perform a given task, under the "Man Hour" approach, the task would be performed in 12.5 business days (assuming an eight hour business day).  By studying Effectiveness Rate though, the manager can use it to calculate a more realistic schedule; for example, assuming a worker is 70% effective, this means there are 5.6 Direct Hours in the business day to perform the work, which calculates into 17.8 business days (and substantially different than the "Man Hour" approach).  The point is, Effectiveness Rate builds reality into a schedule.

As work progresses on an assignment, the worker reports his/her time which the manager monitors.  If the manager observes the worker's Effectiveness Rate dropping, he will endeavor to determine the reason why and exercise authority to try to raise it (within reason of course) in order to keep the schedule on track.  For example, the manager may instruct the worker to minimize personal phone calls and attendance at meetings.  By doing so, the manager is controlling the work environment.

To make this all work, the workers need to report their use of time, something that some office workers spurn claiming it is "unprofessional."  Nonsense.  Being a professional means you are held accountable for your actions and committed to delivering on your promises.  Since professionals such as lawyers, doctors and accountants keep track of their time, why not other workers?  If workers truly want to be treated like professionals, with less micromanagement, then they must accurately report their use of time.  Bottom-line, this interpretation of the use of time promotes the concept of the "Mini-Project Manager" whereby workers supervise themselves.  In other words, the company is managing from the bottom-up as opposed to top-down.  If done properly, the manager will find he/she will spend more time managing and less time supervising.  The concept of "Man Hours" is simply the antithesis of this approach.

As an aside, this concept can hardly be considered new as it was derived from construction projects in the 1950's.  Do you know what the average Effectiveness Rate of a construction worker is?  25%  Call the Ripley people, they don't even believe it.

Author: Tim Bryce is a writer and management consultant located in Palm Harbor, Florida. http://www.phmainstreet.com/timbryce.htm

 

He can be contacted at: timb001@phmainstreet.com

Copyright © 2009 Tim Bryce. All rights reserved.

 

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COMMENTS

sanat235 posted on Saturday, September 26, 2009 8:33 AM
Hi,

Over all the article was good.

Although, regarding the estimation given to client on the basis of 'Effectiveness Rate'. I don't think this is realistic. A vendor cannot add some Man-hours because the effectiveness of the team under is less. This will give the other vendors which has a good effectiveness rate over him.

My point is that the estimate for the project should be based on the actual Man-hours.

At the same time, I don't say that the employees will be 100 % effective during their work schedule. But why the client should be penalized in terms of extra Man hour for that.

Employees are the vendor's assets, so the vendor should deal with it.


Open for your suggestion...
timbryce posted on Saturday, September 26, 2009 10:17 AM
The effectiveness rate concept separates estimating from scheduling. The direct hour estimate differs from person to person. For example, in terms of direct hours, a novice will undoubtedly take more time than an expert. Let's assume the novice has a higher effectiveness rate though than the expert and quite possible complete the task in less elapsed time. The project manager must consider the difference between estimate and schedule.

Also, the customer should be billed for direct hours, not for indirect. In other words, he should not be paying for his breaks, e-mails, phone calls, etc.
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