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Measuring True Value

Ahmad Nassri
Ahmad Nassri
6 min read
Measuring True Value

Time Is Money: How to Measure the Value of Hourly Work

This is probably a monstrous academic topic with the mere thought of this subject leading to a Pavlovian drooling response in your average self-help and business coach author.

When reading about how to measure one’s Return on Investment (ROI) in any given situation, the primary focus seems to be on the employer’s side of measuring ROI. Couple that with crippling HR practices and performance rating metrics that end up serving businesses and not the individual, you end up with an incomplete picture of your value.

The metric of choice in most businesses today is performance ratings. The intention is to show employees how they have measured up to expectations at work in the past year, and focus their minds on their role in delivering on the organization’s goals.

Furthermore, it seems this metric is monetary based. No matter how many labels you give it, and despite HR professionals getting really upset upon hearing this: At the end of the day, if a decision has to be made on an employee’s worth/value, it’s about a dollar figure.

It comes from basic financial principles, primarily focused around an ROI formula:

\[\text{ROI} = \frac{\text{Gain from Investment}-\text{Cost of Investment}}{\text{Cost of Investment}}\]

If you tailor that formula a little further to the focus specifically on employee performance, you get the following:

\[\text{Performance} = \frac{\text{Profit} - \text{Salary}}{\text{Salary}}\]

The problem is there is no easy way to determine a given individual’s impact on profit, so it’s quite speculative.

Additionally, there is no correlation between employees’ yearly performance ratings and overall company results; At least, none that directly maps dollar-to-dollar figures.

It is unfortunate though that the most common and usually only feedback an employee gets from their management tells them very little about where they actually stand, and how much value they are contributing to the bottom line. Performance metrics are no longer a trustworthy predictor of results in an organization. It is time for a new metric that accurately measures the true worth of an employee.

What’s Your Own Measure of Value in Daily Life?

Work is not the only thing in a person’s life. Where do daily chores, home improvement projects, and hobbies figure into the ROI equation? How does one evaluate the ROI for doing these non-work activities when there is no financial investment here. There just isn’t an immediate dollar figure to reference.

Some people use a calculation of their hourly wage (what they get paid professionally) as a comparison and in their decision making process. Here’s an example of an internal dialogue:

- Should I walk my dog for an hour, or pay somebody to do it?

- Well, I make $50 an hour at work, and a dog walker would cost me $20 an hour.

- By that math I can see my time is worth more than this small task, so I’ll hire somebody to do it.

- That gives me the time I need to finish something seemingly more important to me… like that blog post!

Having tried this approach for a while, and going full-hog on outsourcing all of my small tasks to Virtual Assistants and crowdsourcing services, I found it to be inefficient.

Sure, there might be business leaders whose time cannot possibly be spent on anything without a tangible business or revenue-generating result. However, that should only be the argument when you’re “on the clock.” If you work a specific set of hours in a day (such as a 9-to-5) then anything you do within this shift that is not directly creating a positive ROI needs to be optimized or outsourced.

Even so, you cannot take that process outside of the work shift and apply it to daily life. Not walking the dog when you get home with the assumption that you’ll be making money off the difference is flawed; Seeing that you’re not actually working are you? You’ve delegated one task (a $20 dog walk) so you can do another (writing a blog post = $?). That process still is not generating money.

So money is not the right metric, at least not as a general rule, and especially not for daily life outside of work.

Measure of Happiness?

Ultimately it’s all about your own happiness, such a fuzzy concept as it is, and it might even differ across different stages of your life.

It’s easy enough to say “I’m happy now,” but how do you quantify that? How can you compare your measure of happiness in eating that juicy delicious burger at lunch, with a productive meeting at work?

There needs to be a unit of measure, that is universal and easily calculated. I believe this is one which we all seem to underestimate: Time.

Time ≠ Money

Unfortunately, whenever we discuss the concept of time, it gravitates towards money. Though this is not the case for everyone.

Time can be a morbid topic for some, especially those who’ve witnessed death, war, or any sort of human suffering. For these people, time has more meaning than just the transit from one number to another on a clock.

Time is the only native currency human beings have, and by extension, living creatures as well.

There was a movie made in 2011 titled In Time. It wasn’t a very good movie, and it received really bad reviews, but it helps illustrate my concept of time and value. Here’s a short synopsis:

In 2169, people are born genetically engineered with a digital clock, bearing 1 year of time on their forearm. When they turn 25, they stop aging and the clock on their forearm begins counting down. When it reaches zero, that person “times out” and dies. Time on these clocks are the universal currency; by touching arms, one person can transfer some of their time to another in exchange for a product or service.

You follow our heroes (Amanda Seyfried & Justin Timberlake) as they battle for their lives, speed through bad car chase scenes, with terrible cinematography, love, sacrifice and so on…

The interesting part is the concept of using time as currency, which consequently forces people to re-evaluate their decision making process with a simple ROI formula:

\[\text{ROI} = (\text{time remaining} - \text{time spent} + \text{time gained}) - \text{time remaining}\]

This is literally life and death decisions being made on the spot:

Should I buy that loaf of bread? Its going to cost me 1 hour of my life, but it will give me energy to survive for 3 hours.

This situation would have provided us with a positive ROI.

Should I buy this car? It’s going to cost me 24 hours of my life, but it will get me places faster, which might be a time saver. However, do I really need to get to those further places? Or can I survive where I am and keep that 24 hours of my life?

Leaving this fantasy world (and hopefully humanity never ends up there), what lessons can we take from this bleak scenario?

I truly believe every decision should be a life and death decision, because lets face it, science fiction aside: Time is a depreciating currency. An hour you experience in your youth is not equivalent to an hour you experience in old age. You are simply incapable of achieving the same results in any given activity done in your twenties as you would later in life in your eighties.

Any decision you make here and now, no matter how insignificant directly affects the time you gain or lose for your future.

Time = Currency = Value

Going back to the main topic of measuring your value in work, life, and in decision making: measure it with Time.

This has a potentially huge impact on decision making. Let’s say you’re evaluating a job offer. I’m sure you’re already looking at compensation and benefits as your primary evaluation criteria, but have you considered the Time ROI formula?

\[\text{Job Value} = (\text{Life Remaining} - \text{Time Spent at Work} + \text{Time Gained from Job}) - \text{Life Remaining}\]

The United States Bureau of Labor Statistics has a Time Use Survey which illustrates, among other things, how much time people invest in work:

Life Chart

Work takes top spot in time cost, followed by Sleeping in a close second, then by Chores in third, leaving you with only 4-5 hours per day on average for “me time.”

So when making a career or job decision, that time investment better have a positive ROI, and so should every decision you make.

  • Walking the dog would provide a positive ROI. One hour a day spent with your pet will increase your health and life expectancy.
  • Taking a high-pay but high-risk job would provide a negative ROI. A 12 to 15 hour work day will shorten your life, and all the money you are making now will not buy your youth back later in life. Although perhaps it would cover your plastic surgery, medical bills, and antidepressants.

Take Control of Your Life; Measure Your Value and ROI

I have fully embraced time as the ultimate currency, and as a unit of measure for my value, the value of work, chores and life activities. This has helped me define a few simple life goals:

  • Live life to the fullest extent.
  • Never compromise my values for anyone or anything.
  • Never spend time participating in anything with negative ROI on my Time Currency.

Ahmad Nassri Twitter

Fractional CTO, Co-Founder of Cor, Developer Accelerator, Startup Advisor, Entrepreneur, Founder of REFACTOR Community. Previously: npm, TELUS, Kong, CBC/Radio-Canada, BlackBerry

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