This is the eleventh posting regarding labor/labour productivity and disruption. This contribution provides managerial considerations or issues regarding the impact of overtime on labor productivity. The Subject Series can be viewed here.
Two key points:
- “The project plan is needed as a baseline to calculate the expected cost and time performance (cost estimate or price and the project schedule)”
- “Time and cost forecasts must be evaluated and adjusted if the project plan execution changes and overtime is introduced, increased or reduced.”
Project planning is one of the major challenges for program and project management teams. Past posts have discussed many aspects of project planning. The series regarding Project Management Challenges is here. Part 5 of this series is particularly relevant or germane to the discussion regarding the impact of overtime on labor productivity in this post.
The impact of overtime on labor productivity is a relevant and serious consideration in many aspects of program and project management. Understanding the impact on labor/labour productivity and cost due to overtime is an essential skill related to both planning and forensic analyses. Remember, the impact on productivity applies to all hours worked, not just the hours associated with premium time costs. Hence, often the productivity impact is more costly than the premium time compensation component of the payroll costs.
Perhaps more importantly the impact on the schedule duration must consider the planned and forecasted progress using the proper productivity. As overtime is introduced, progress may well be impacted. The time impact of more work hours per week is mitigated or offset by the lowered productivity.
The impact of overtime on labor/labour productivity is not limited to construction field labor. It presents in engineering, construction management, programming, consulting and other professional man-hours. [Read more…]