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EMH Insights

The Danger of Measuring Hours, and Not Results

In a recent article in the New York Times entitled “They Work Long Hours, but What About Results?,” author Robert Pozen discusses measuring success in the office by the number of hours worked, and how this threatens the productivity of a business. In his article, Pozen claims that there is no place for the hourly wage in the workplace of knowledge workers, and he uses his own experience within a law firm as evidence of the perverse incentives that hourly billing can create. From the perspective of the lawyer, it did not motivate the attorneys to work efficiently—those who work too quickly can end up being underpaid. Hourly billing also works against the best interests of the client as well, as it allocates the risk associated with the project potentially taking longer than expected to the client.

Additionally, when company management places the focus on the quantity of hours put in, rather than the quality of the result, the company runs the risk of creating a culture of superficial efficiency. Workers start to focus more on capturing face time with their boss, rather than being productive and valuable to the company. Pozen advises the reader not to do work just for work’s sake: don’t have a meeting just to say you had one, don’t read more than you need to when digesting an article, and don’t spend too much time trying to write an office memo that will win a Pulitzer Prize.

At EMH Strategy, we strongly emphasize this focus on the quality of output for our clients and our internal team. We also strive to embed this philosophy in our clients. Ours is a culture of efficiency; some days take more time, and some less, it all depends on the work at hand. But we focus on the quality of the work we produce each day, and not the position of the hour hand. We are also always striving to find innovative ways to develop our pricing structures. Certain projects run at a flat fee, while others at an hourly rate. Yet in order to prevent our clients from taking on the risk of a lengthy project, we cap those projects we bill hourly at a maximum, so the client knows beforehand exactly what will (at the very most) be charged. This approach certainly varies depending on firm size and industry, and we are interested in hearing from you: what is your company’s internal approach to work, and do you charge your customers by the hour?