Is a Timekeeping System Right for Your Business?

Is a Timekeeping System Right for Your Business?

Deciding whether or not you should implement a time clock system at work requires a careful evaluation of the advantages and disadvantages associated with tracking an employee’s hours worked. While some may argue a time clock system promotes structure, clarity, and punctuality, others may see it as a burden and lack of trust between an employer and its staff. Below is an in-depth look at some of the fundamental pros and cons of executing a time clock system at your place of business.

The Pros:

1. Employers are less likely to become a victim of time theft. Time theft results if an employee accepts payment from an employer for work that they did not perform, or for hours that were not spent working. According to a study conducted by Synerion, "By clocking out a few minutes early and spending some time on the Internet each workday, employees waste $5,000 in productivity. In a company of less than twenty employees, this amounts to nearly $100,000 in lost funds before the fiscal year even begins."

2. The Fair Labor Standards Act (FLSA) requires that workers must receive overtime pay for hours worked over 40 in a workweek, at a rate no less than time and one-half their regular rate of pay; however, without an adequate timekeeping system, hours worked can easily be miscalculated, or even worse--misrepresented. A time clock system helps protect employees from working overtime without proper compensation.

3. Employees clearly understand the boundaries of their workdays. Work-life balance is often improved with the implementation of a time clock system. Workers know exactly when their workday begins and ends, and you know exactly when work is (or should be) getting done.

4. Employers and employees have a printable log of all hours worked. If a dispute arises, workers and managers can easily refer to the employee’s time clock record to resolve the issue.

5. Time clocks offer an element of legal protection to employers. By implementing a time clock system, companies can rest assured in knowing they are in compliance with the Fair Labor and Standards Act (FLSA).

The Cons:

1. Employees who are consistently tardy are sometimes your top performers. Some employers penalize or fire employees for their repeated tardiness. This practice can result in the potential loss of your most efficient producers.

2. Time clocks can malfunction. No time clock system is completely failproof. Resolving these issues requires time and energy that could otherwise be devoted to other important business activities.

3. If you are implementing a time clock into an existing business, some employees may feel that their employers view them as dishonest, which can foster a culture of distrust between an employer and its staff.

4. Employee productivity often hinges upon variables other than time. Total hours worked is only one indicator of an employee’s performance. Employers should not forget to consider other factors, such as the quality and amount of work completed.

5. Time clocks are not a solve-all for time abuse. While time clocks provide confirmation that an employee is logging work hours, there is no way to ensure that the employee is in fact working. Time clock systems cannot prevent employees from sleeping on the job, gossiping in the break room, or engaging in other forms of time misuse.

Bottom Line: So there you have it, folks. Is a time clock the most effective solution for time management in your business? Only you can decide that. But by carefully considering the pros and cons that we've detailed above, you can feel confident in knowing that your decision will lead the path that will best foster a compliant, productive, and a positive working environment for both you and your employees.