The $2,000 hour
how managers influence project performance through the rework cycle
Most development projects fail to meet their time and cost targets. Traditional managerial responses to time delays and cost overruns have been to increase overtime, pressure individuals to produce more, and rapidly hire new employees. These responses may have the appearance of helping, but may actually cause further project delay, as well as increase project costs. Studies have shown that when employees work overtime, their productivity decreases increasingly with each hour of overtime worked, resulting in less output, decreased quality work, and increased rework. Rapid hiring also causes a cycle of rehiring and training that not only exhausts managers, but increases with each person hired. Squeezing production out of employees is seldom conducive to quality work. The best option may be to focus on producing quality work the first time, limit rework, refrain from immediately adding full time equivalent (FTE) people, either in overtime or rapid hiring, and producing work according to a project schedule.