Is Time Still the Best Measure of Work in the Knowledge Economy?

The results of our work — not time invested — should be how companies measure success. So why do many business leaders focus on time?
Time and productivity

During the Industrial Revolution, workers moved between machines, cranking out products for as long as their managers instructed. Although the working world has come a long way, from physical laborers standing in front of heavy machines to college-educated workers hunched over laptops, some of the old factory mindsets persist.

Whether it’s through a formal company policy or a subconscious assessment by leaders, time at the office is still viewed as the standard measure of employee productivity and commitment. However, today’s knowledge-worker economy, for instance, could do away with time clocks and switch to a system where workers’ effectiveness is measured on their ability to meet business results, whether a project takes 10 hours or 100.

“It’s an easy metric that has an illusion of being accurate, but it really isn’t,” said Robert C. Pozen, senior lecturer at MIT’s Sloan School of Management and a senior fellow at the Brookings Institution. “The key metric is what you get accomplished, not how many hours you’re in.”

This change in mindset requires a performance-based system that outlines goals and metrics of success for employees to meet instead of time. As long as workers meet those goals, they have control over their time and have incentive to be as efficient as possible.

“Time is only a good measure when you have sort of relatively commoditized work where there isn’t a lot of creativity,” Pozen said, “and there’s not much of a difference between people who are high achievers and people who are low achievers. That might be OK for somebody who’s just stamping out steel plates in a factory, but it’s not OK for almost anything in the knowledge economy.”

When managers rally their people around goals and hold people accountable to the results of their work, they’re more motivated to perform, said Jody Thompson, co-founder at CultureRx and co-creator of Results-Only Work Environment, also known as ROWE, a management consulting agency based in Minneapolis.

Workers often say that they’re “doing their time” at their jobs to later earn another position or fulfill a job requirement. “Where else in society do we do time? Prison,” Thompson said. People give up much of their daily lives to companies and compare their time commitment to their peers. In a system where employees are held accountable to their output and goals — but time at a desk and work location don’t matter — leaders can foster employee loyalty. “That’s the new employee agreement: autonomy and accountability in perfect balance,” Thompson said.

This all takes a serious shift in mindset, starting with how society views employee tenure. A long career at one company is often seen as a sign of loyalty to hiring managers. However, that doesn’t necessarily mean workers who stay for long tenures performed optimally. “What we’ve done is we’ve completely missed the mark [on] what are people really doing,” Thompson said. “Time is the old currency of work. Measurable results is the new currency of work. Manage the work, not the people.”

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Measuring output based on clear goals is how HighGround measures success, said Andee Harris, the Chicago-based employee engagement software company’s chief engagement officer. This system requires clear goal-setting and conversations between manager and worker, as well as alignment to the company mission and vision.

“It’s not just about punching a timecard,” Harris said. “It’s about really buying into the purpose and the mission and the vision of the company.” Once people align to that, the leaders must manage expectations of their teams’ work, she added.

Although this works at HighGround, Harris doesn’t think it applies to all roles or companies. In areas like consulting, professional services and law, for instance, billable hours ensure accountability when it comes to client work. Also, some work requires budgeting time that it takes to complete projects, making sure workers aren’t overloaded with work.

Many freelancers, many of them considered knowledge workers, also use billable hours in their pay structure, Harris noted. With an increase in contract work, as well as the rise of the gig economy, could this mean that salaried workers will opt for a billable hours system and focus less on outcomes?

“It concerns me a little that people will lose that purpose and vision of the company,” Harris said.

Lauren Dixon is an associate editor at Talent Economy. To comment, email editor@talenteconomy.io.