Earned Hours Calculation Method

In a production house, operators attend the full shift hours for work. But while you look at their production output in hours that might not be the same as the attended work hours.

The formula for calculating earned hours:

Earned hours = (Number of pieces produced * Standard minute of the job)/60

Note: In the above formula 60 is used to convert earned minutes into earned hours.

Earned hours calculation method:

To calculate the earned hours for your workers, follow these steps

1. Define SAM for all operations (sewing and non-sewing operations)
2. Count quantity produced by the operator. You should record operation wise production quantity, as an operator may work in multiple operations, and of different SAM.
3. Now follow the above formula to calculate earned hours for all operators one by one. You can use the spreadsheet for calculating earned hours quickly.
4. In case one operator is doing more than one operations, first calculate operation wise earned hours, then sum up the operation wise earned hours to calculate total earned hours by the operator.

An example:
Let assume, an employee doing side seam operation. She has produced 300 pieces on that operation. The SAM (standard minute) of that operation is 0.80 minutes. Earned hours by her is
= (300 * 0.80)/60 hours earned
= 4 hours

Why calculate earned hours?

• By analyzing earned hours of each operator, you can easily evaluate the performance of an operator.
• Secondly, if you want to calculate earned amount (in Dollars), based on their hourly base rate, you can calculate that by using operator's earned hours.

Also Read: What is standard hour earned (SAH)?