What is an earned hour?
It is normally defined as the value of work completed by an employee, team, department, etc. based upon a “norm” and then converted into hours. Norms are generally expressed as UPH (Units Per Hour) or HPU (Hours per unit). Fundamentally, a norm is usually expressed:
Norms can be converted into earned hours in one of the following methods:
- in pure time (productive time)
- with no downtime
- no work factors
- no waste or scrap
Norms can be converted into earned hours in one of the following methods:
Volume Produced ÷ UPH = Volume Produced X HPU
