Time tracking is one of the most important elements of successfully running your business. Whether it is by helping employees to be more productive with their time, properly bidding on new contracts or maximizing the profitability of existing ones, time tracking is the key that unlocks many doors.
Unfortunately, the meaning of various time tracking terms are not always readily evident. So let’s look at some of the common terms and what they mean. In the first part of this series, we’ll look at some of the foundation terms that the entire industry is built on.
Wikipedia defines ‘knowledge worker’ as often referring to, “software engineers, doctors, architects, engineers, scientists, public accountants, lawyers, and academics, whose job is to ’think for a living’.” It was actually Peter Drucker who first coined the term “knowledge worker” as a way of differentiating someone whose main asset is the knowledge they possess as opposed to the product they build. In 1969, he accurately predicted that new industries would primarily employ knowledge workers. This, in turn, has given rise to the need for more accurate time tracking as a means to understand the productivity of the knowledge worker.
Because there are so many companies (and entire industries) whose most valuable resource is not an item, but the collective knowledge of their workers, it is critical to the success of these companies to be able to properly manage that intangible resource. This is especially important as cross-project work becomes more common. If a single, highly-skilled employee works on multiple projects, the ability to properly track how much they contribute to a particular project can be an invaluable aid in determining the true value of that project.
This is a term that is often used and more often completely misunderstood. The Project Management Institute (PMI), “the world’s leading not-for-profit professional membership association for the project, program and portfolio management profession,” defines project management as:
“The application of knowledge, skills and techniques to execute projects effectively and efficiently. It’s a strategic competency for organizations, enabling them to tie project results to business goals — and thus, better compete in their markets.”
PMI further separates the project management process into five categories:
- Monitoring and Controlling
PTO is an acronym commonly used to refer to Paid Time Off. While the name is self-explanatory, what it includes can still vary significantly from one company to another. Some companies lump vacation and sick days into one pool for the employee to use as they see fit. Others exercise more control, separating vacation and sick days.
Time and Attendance
Time and Attendance refers to the actual process of tracking employees’ time spent working. In their most basic form, this can take the form of a punch card system. On the other end of the spectrum are automated systems, such as barcode readers, and advanced time tracking software.
In this Part One, we’ve defined four of the base terms used throughout the time tracking industry. In succeeding posts we’ll continue to build on this foundation and define some of the more technical terms the industry relies on.