Lack of Time Sheet compliance is a common issue among creative agencies. No matter what the firm’s billing scheme is–fixed fee, retainer, or time and materials–capturing the effort spent at the task level of projects is critical in these three areas: Estimating, Productivity Analysis, and Financial Accounting. To counter this problem I propose a tiered system of bonuses as an incentive program for increased Time Sheet compliance for creative agencies.
Benefits of compliance
Assuming you, the reader, agree Time Sheets are a vital component of the creative agency and you are interested in fixing these problems yourself, I’ll not spend too much time addressing obvious benefits afforded through compliance. I can summarize the benefits by pointing out the fact that accurate historical data is crucial to the health of the agency. The fudging of numbers from a staff member writing Historical Fiction Time Sheet (HFTS) at the end of the week/month, deprives the firm of business intelligence and forces it to play the role of a forensic detective to arrive at meaningful data.
So how do you make time sheets compliance important from the user perspective? The answer on this topic is the same as many business problems; through the aligning of incentives. In that regard the agency has two options: the Carrot or the Stick. I.E. “Give me your time sheets or your fired”… Or the firm can realize reward systems are far more likely to garner compliance than punitive ones. As I stated at the beginning of this post, I propose a system of tiered bonuses as an incentive program for creative agencies. In my proposed scheme, supervisors get a larger share than their reports, but everyone gets a piece of the pie.
The Tiered Structure
Take the agency ORG Chart and find your department supervisors (anyone who is responsible for conducting performance evaluations). These folks should approve the time sheets of their subordinates, or at least getting reports for their performance daily. Establish a rate structure that makes for your firm and giving 60% to the supervisors and 40% share to the staff. Shares reduce each month for non compliance, by 8.34% per month with any incident occurring in that month. An incident being any month when even a single sheet is not submitted.
Throughout the year supervisors will push their direct reports to comply to keep their additional bonuses in tact. Those staff members will want to keep their own bonuses in tact as well as appease their supervisor to ensure their performance review will go smoothly.
Quantifying the Value of Compliance
How do you figure the dollar amount to build the company pot? Start by analyzing the cost of non compliance as it relates to lost revenue. How many write-offs does your agency make due to late Time Sheet entries after a project has already been billed? How many administrative hours go into fact-finding missions, chasing the offenders around the office with pad and pen? Take these factors and put a dollar value on that is lower than the cost but high enough to win the benefits from the investment.
Thoughts? Am I being to lenient on these derelicts? Do you prefer the Stick method? As always I’d love to hear your what you have to say.