At times managers tell their resources, to add a buffer of x hours while calculating the time so as to cover up for any unforeseen situation. This is incorrect anything not known is called unknown risk and it is always good to keep a certain amount of time for risk mitigation and workaround. Moreover it throws off project metrics.
At the end of the day the manager needs to know where the team is, even if they are not on track. It is always recommended to encourage your resources to report the actual effort spent. But there might be some contractual limitations which can prevent that being charged. Some managers overcome that by means of an internal tracking system to capture the actuals.
Some organizations use tools for logging time sheet and generating invoices based on the time sheet. If resources enter the actual time, it would eliminate all the issues, the tool does provides an option to view the actual hours entered by the resources and option to provide the approved hours which are used for generating invoices for billing. If you don’t enter the “real” time then how do you really know if the time entered is correct? The Project Managers have the “real” time in their tracking list. If they don’t, then there is no way to re-create success or stay away from failures. The time entry depends on the type of organization, some organizations want to know the actual time spent by the Project Manager on direct project activities, and indirect activities separately. In some companies the Project Manager’s time is treated as administration, not directly billable to any team or group. In this type, the entire department budget is based on equal distribution to all the revenue centers as a support service. Therefore how much time logged on the project is not relevant.
For people to be able to capture true time spent on projects you need to be able to enter time without having to worry to show that you worked x hours per week, it does create the need for parallel systems, but then you have to decide if the information is worth the extra effort. The biggest issue for managers and ultimately for the business is how to report actuals on a fixed price project or resource. If a contractor works 10 hours in one day, if ‘real’ actuals are used then it will mean another half day cost on the budget when clearly it’s not the case because the day rate will always remain the same. The principle being your budget should not be charged more than the actual cost. The major issue that should be confronted and understood by the top management and finance department is how the budget would be measured consistently throughout the project. This will also be reflected in the accuracy of financial reporting. To understand what is going on you must have actual accounting. If there are reasons to report something different than actual that needs to happen separately.
Not only is reporting actual time the right thing to do, it is unethical to do the opposite. Being a PMP from PMI, we have a code of ethics to follow. Not reporting actual time as a project manager, or telling your team not to report time over a certain limit would be an ethics violation and it is worth it to be honest.
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