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A new measure of success: Counting hours worked isn’t cutting it anymore

April 20, 2021, 11:00 PM UTC
Commentary-Hours Clocks-Measuring Success
With more hybrid work, businesses must get smarter about how they measure employee productivity and performance, writes Robert Pozen.
INA FASSBENDER—AFP/Getty Images

If you are reading this column, do you really care how many hours I took to write it? Or do you just care about the freshness of my ideas and the clarity of my writing?

As this example illustrates, counting hours is not a sensible way to gauge the productivity of professionals in knowledge-based industries like finance, software, biotech, or journalism. Those professionals may generate a great idea in a few hours, or take days to come up with a mediocre one. A much better measure is the quality of their results. 

Yet many companies are still counting hours spent working—traditionally enforced through timesheets and standard office hours. When the pandemic struck, some companies even inserted software into the home computers of their employees to monitor how many hours they stayed online each day.

The pandemic and its aftermath should ring the death knell of hours as a useful proxy for productivity. With most employees working from home, the boss no longer can walk around the office to check on who is sitting at their desk. And, going forward, the boss will not be able to monitor the hours of the team as they move to a hybrid model, working sometimes in the office and sometimes at home. 

As counting hours becomes less relevant, managers are searching for alternative ways to hold their team members accountable for doing a good job. After all, how can the manager know whether team members are working diligently from home, or using the time away from the office to practice their golf swing? In other words, to replace the counting of hours, organizations need a more effective system of accountability tied to results.

Both new and old companies are moving to systems emphasizing results rather than hours. For instance, Matt Mullenweg, the founder of Automattic, says that its employees are accountable for what they accomplish rather than the number of hours they log. Similarly, the new mobile work policy of Siemens focuses on outcomes rather than time spent on the job. 

To provide accountability based on results, I’ve developed an approach called success metrics. Under this approach, the manager sets objectives for their team as part of the effort to fulfill the organization’s goals. Then the manager and team members discuss how they will know at the end of the relevant period whether they have been successful in achieving these objectives. That discussion should lead to an agreed-upon list of specific deliverables with time targets.

Using success metrics has many benefits. First, it forces a clarification of objectives. When I headed two investment organizations, I was constantly amazed by the failures of communication among dedicated, smart, and loyal colleagues. These communication glitches are minimized when the manager and the team must agree on specific deliverables. 

Second, using success metrics helps maintain a high level of job satisfaction and productivity. Once the managers and team members agree on a list of specific deliverables, it’s up to the team to decide how, when, and where they get the work done. This high degree of autonomy and flexibility not only frees up team members to do their best work, but also promotes their work/life balance.

Third, with general objectives translated into a set of specific deliverables, the manager no longer needs to micromanage the activities of their team every day or every hour. As long as the team members deliver the scheduled results, it does not matter how they utilize every day or hour. Instead, managers can use their time more constructively to find new clients or develop new products.

Nevertheless, a good manager won’t ignore the team and just wait for the scheduled results. A good manager should meet with the team every week to ascertain their progress and offer assistance if needed. 

For example, the manager might help solve difficult analytic problems, assign more resources, or persuade other units to cooperate with the team. At the end of the project, the manager should celebrate the team’s victories and understand any deficiencies to prevent them from happening again. 

In short, while we should all applaud the demise of the eight-hour workday as a relic of a bygone era, we need to replace it with a productivity measure more relevant to a knowledge economy. Out with timesheets and in with success metrics!

Robert Pozen is a senior lecturer at MIT Sloan School of Management and coauthor of Remote, Inc.: How to Thrive at Work…Wherever You Are, which will be published on April 27.