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World Class Maintenance KPI #1 - Work Order Labor Hours vs. Paid Labor Hours

Bill Mountjoy, CMRP & CDG VP of reliability engineering


The Work Order Labor Hours vs. Paid Labor Hours Key Performance Indicator (KPI) verifies the completeness of technician labor captured on CMMS work orders as a percentage of total hours paid through payroll. It’s derived by dividing the CMMS’s total reported work order labor hours (for the month) by the timekeeping system’s total monthly hours paid (for the month).


  • Work Order Labor Hours / Paid Labor Hours

In theory, 100% of all technician time should be captured on work orders. While this is theoretically the most comprehensive and accurate approach, it’s usually unrealistic. The recommended approach is to establish a standard deduction for daily non-maintenance routines such as breaks, lunches, and start-of-shift check-ins. Additionally, the time spent in meetings, training, and on administrative tasks should be reported as a non-maintenance work type on work orders. The total time allocated to these non-maintenance activities typically adds up to about 15% of the shift. Using this approach, the goal is to capture 85% of the total labor hours worked on work orders.


  • >= 85%

Managerial trust in all KPIs is dependent on accuracy of data captured. For this KPI to be accurate, real time, on-line time distribution is required and must be verified at the end of each shift, not week. If verification takes place at the end of the week, accurate corrections are impossible because by that time, it’s rare that anyone would accurately remember how his / her day unfolded on the day in question.

It’s imperative that the Work Order Labor Hours vs. Paid Labor Hours KPI be greater or equal to 85% because it paints a precise picture of your maintenance department and lets you know where maintenance effort is being spent. In simple terms, it lets you know what equipment is failing and costing the most. From there, decisions can be made to either increase or decrease PM frequency, improve PM quality, remove or reduce the failure, etc. Not accurately recording maintenance labor on work orders compromises the CMMS, renders it unreliable for generating KPIs and making decisions, and hinders your ability to make the "right" decisions and drive continuous improvement. The bottom line is that ALL maintenance work must be reflected on CMMS work orders. If not, your CMMS is nothing more than a work order printing press.

What does the ratio tell me?

  • < 85%

Ratios less than 85% mean that work order labor hours are not properly tracked and what is not measured is not managed. Furthermore, what's not managed cannot be corrected or improved, causing companies to lose out on windows of opportunity and any competitive edge.

  • >= 85%

Ratios greater or equal to 85% mean that work order labor hours are properly tracked. Hence, what's measured can be managed enabling maintenance and reliability teams to increase customer satisfaction, reliability, capacity, and productivity, delivering a competitive edge to their organization.

For KPI #3, click here. For  KPI #2 and future KPIs, be on the lookout!

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