Efficiently Managing Time Tracking and Time Off

Working nine to five, what a way to make a livin’. Except sometimes time work isn’t as simple and fun as Dolly Parton’s 40-hour workweek anthem. Those hours between nine and five (or whatever hours start and end your workday) might also include breaks, vacation time, sick leave, salaried or hourly pay, and more, all of which has to be tracked via time tracking.

In this chapter on time tracking and time off, we will cover:

What Is Time Tracking?

Time tracking is how organizations record hours worked for hourly employees to ensure they are compensated accurately for their time. Salaried employees may also need to track time spent on projects for different clients so you can bill clients. You can break down employee time tracking into three steps:

Each of these steps is completed according to the time tracking method your organization uses, which can range from paper forms completed manually by employees and managers to automated time tracking software.

Employees complete time entry daily by recording the times they begin and finish work—often referred to as clocking in and clocking out. Employees clock in at the beginning of the workday, clock out and back in for any unpaid breaks, and clock out at the end of the workday. These recorded times are referred to as timestamps and can be recorded using a physical or electronic timesheet depending on the time tracking method used at the employee’s company.

Clock in image

At the end of each pay period, employees send their timesheets for approvals. In most cases, they send these timesheets to their managers to verify timestamps and hours worked. Once a timesheet is approved, it is sent to HR or through an automated software to calculate the total number of regular and overtime hours worked. These totals are formed into a report sent to payroll for processing, so employees get paid for their hours—employees love this part!

Why Is Time Tracking Important?

Time tracking records the hours employees work so they’re paid fairly. While paying employees fairly and correctly is most important, time tracking offers other benefits. It can give your organization strategic insights into unexpected absences, late arrivals, and productivity.

The Good, the Bad, and the Costly of Employee Time Tracking

For example, if Nancy works as an HR professional for a small firm with 10 employees, she needs to know how many hours each employee works, if they worked overtime, and if they took time off that pay period so she can calculate how much each employee should be paid. Perhaps in an ideal world, everyone clocks in at 8:00 AM, takes an hour-long lunch, and leaves at 5:00 PM on the dot. But in reality, Frank has an appointment one morning, so he doesn’t arrive until 10:00 AM, and Emilia had a big project due and worked seven extra hours last month, and Marcus had a vacation and took four days of paid time off (PTO).

In this scenario, there are three ways for employees to count their hours: they can count as they go, they can wait until the end of the pay period, or they can put it all on Nancy. But only keeping track as they go is likely to be accurate.