Employee Time-keeping - The Effects of Clock Rounding on Corporate Profit
1. Employee Time-keeping:
The Effects of Clock Rounding on Corporate Profit
by
Bradley Harris Lott
A Graduate Capstone Project
Submitted to ERAU Worldwide
in Partial Fulfillment of the Requirements of the Degree of
Master of Science in Management
Embry-Riddle Aeronautical University
Worldwide
Worldwide Online Campus
May 2015
2. Employee Time-keeping:
The Effects ofClock Rounding on Corporate Profit
by
Bradley Harris Lott
This Graduate Capstone Project
was prepared under the direction ofthe candidate's Project Review Committee Member,
Dr. Wayne Harsha Adjunct Associate Professor, ERAU Worldwide,
and the candidate's Project Review Committee Chair,
Dr. Wm. Francis Herlehy III, Professor, Emeritus, ERAU Worldwide, and has been
approved by the Project Review Committee. It was submitted
to ERAU Worldwide in partial fulfillment of
the requirements for the degree of
Master of Science in Management
Project Review Committee:
Wayne Harsha, Ed.D.
Committee Member
Dr. Wm. Francis Herlehy III, Ph.D.
Committee Chair
11
Wm. Francis Herlehy III
3. iii
Acknowledgement
I take this opportunity to express gratitude to Dr. Wayne Harsha, Associate Professor at
Embry-Riddle Aeronautical University for his guidance in completing this project. I also thank
my son Brandon, for inspiring me in his pursuit of earning a bachelor’s degree from Embry-
Riddle Aeronautical University to pursue my dream of obtaining a graduate degree. He and I
shared our learning experiences and will graduate on the same day at the Embry-Riddle Campus
in Daytona Beach. I am also grateful to my partner and soulmate Tricia, for providing me with
unceasing encouragement, support and attention throughout this educational venture.
4. iv
Abstract
Researcher: Bradley Harris Lott
Title: Employee Time-keeping: The Effects of Clock Rounding on Corporate Profit
Institution: Embry-Riddle Aeronautical University
Degree: Master of Science in Management
Year: 2015
Employee time-keeping systems operate such that the rounding rule is mathematically and
empirically unbiased, performing consistently to established federal and state laws. Employees
have the potential to “game” corporate time-keeping systems, utilizing time clock rounding rules
for the purpose of self-gain. This study surveyed a large sample of United States employees to
establish time clock gaming attitudes and behaviors. This study also collected seven months of
recorded employee timecard data to identify and analyze potential time-keeping clock rounding
behaviors within the total population of 139 employees at a research, development, and
manufacturing company. The combined results of this survey and time-keeping analysis
established there is a significant difference in time-keeping attitudes and behaviors for a sample
group of employees condoning or actively participating in time clock rounding behaviors, when
compared with beliefs and random time-keeping behaviors practiced within the general
employee population.
5. v
Table of Contents
Page
Project Review Committee ii
Abstract iii
Abstract iv
List of Tables viii
List of Figures ix
Chapter
I Employee Time-keeping: The Effects of Clock Rounding on Corporate Profit 1
Background of the Problem 1
Researcher’s Work Setting and Role 2
Statement of the Problem 3
Significance of the Problem 4
Assumptions 4
Limitations 5
List of Definitions 5
List of Acronyms 6
II Review of the Relevant Literature 8
Background 8
Employee Attitudes and Behaviors 8
Impacts to the Employer 11
Legislation and Legal Case Rulings 12
Summary 13
6. vi
Statement of the Hypothesis 15
III Research Methodology 16
Research Approach 16
Survey Population 17
Sources of the Data 18
Data Collection Device 18
Pilot Study 19
Instrument Pretest 19
Distribution Method 19
Instrument Reliability 20
Instrument Validity 21
Procedures 22
Assumptions 25
Limitations 26
Treatment of the Data 27
IV Results 29
Timecard Employee Data 29
Employee Timecard Analysis 31
Employee Survey Data 35
V Discussion 39
Measured Behaviors of Clock Rounding 39
Determined Attitudes from the Survey 39
VI Conclusions 42
7. vii
Clock Rounding 42
Survey 43
VII Recommendations 44
Round by Pay Period, Not by Clock Event 44
Employee and Management Attitude Adjustment 45
References 46
Appendices
A Bibliography 49
B Permission to Conduct Research 51
C Data Collection Device 61
8. viii
List of Tables
Table Page
1 Data Totals for All 139 Employees 29
2 106 of 139 Employees Not Practicing Rounding 30
3 33 Employees Practicing Rounding 30
4 Lott, U.S. Worker Survey 37
5 Holmquist, U.S. and South Korean College Survey 37
9. ix
List of Figures
Figure Page
1 Disselkamp’s Payroll Leakage Chart 11
2 Single Employee Practicing Clock-Rounding 31
3 Employee Timecard Activity at :00, :15, :30 and :45 33
4 Clock-in Employee Timecard Clipped at 300 on Y-axis 34
5 Clock-out Employee Activity Clipped at 300 on Y-axis 34
10. 1
Chapter I
Employee Time-keeping: The Effects of Clock Rounding on Corporate Profit
Background of the Problem
Time-keeping systems are typically established to process employee activity after the fact
with the potential effect being that employers might suffer from overspending for labor that was
not performed, resulting in reduced productivity and diminished profit. Numerous employees
choose to repeatedly “game” the system by taking advantage of time-clock rounding rules (also
known as “gaming” or “time mooching”) throughout the workweek. This clock rounding
becomes a ploy to game or take advantage of, or abuse, existing payroll time-keeping systems.
A 15-minute-rounding rule will give employees an extra seven minutes each time they clock-in
and out, which will compound over the course of a week allowing those “gaming” employees to
work fewer hours than the typical 40-hours required for all full-time employees.
Analysis of recorded time-keeping data was conducted in a manner similar to the efforts
performed by Dr. Ali Saad, a labor economist, and statistician, retained to analyze the impact of
labor costs associated with time rounding in the wage and hour class dispute between See’s
Candy Shops, Inc. and the Superior Court of San Diego County. Dr. Saad computed the hours
worked for each employee shift by comparing the actual (unrounded) time entries and the
rounded time entries, and then determined the difference for each of the shifts. Based on this
mathematical analysis, Dr. Saad concluded that
…the total impact of rounding actual time punches to the nearest tenth of an hour for all
shifts worked … produced a net surplus of rounded over actual shifts of 2,230 employee
work hours [which] … resulted in a net economic benefit to the employees as a group …
Per shift, the rounded shifts exceeded actual shifts by on average .002 hours, which is
11. 2
equal to 0.12, minutes, or 7 seconds per employee, per shift. (See’s Candy Shops v.
Superior Court of San Diego County, 2012, p. 16)
In a case involving Hernandez and Overhill Farms, Inc., the employer was charged with
rounding time worked at the beginning of employee shifts and the end of employee shifts to its
own advantage (Hernandez v. Overhill Farms, 2013). Similar analysis was performed to
determine time rounding activities but unlike the charges in the Overhill Farms case, exploration
of clock rounding behaviors was evaluated by employees rather than the employer to determine
if time rounding activities were pursued for the purpose of self-gain.
Researcher’s Work Setting and Role
This researcher is a Master of Science in Management (MSM) student at Embry-Riddle
Aeronautical University (ERAU) and has a Bachelor of Science degree in Computer Science
from Fitchburg State University. This researcher has completed all required MSM coursework at
ERAU, to include Management Science, Applied Regression Analysis, Planning and Execution
of Strategy, Managerial Communications and Federal Regulation, Ethics and the Legal System
and is projected to graduate in May, 2015.
Professionally, this researcher has more than 30 years of experience as a contractor
supporting the U.S. Department of Defense. He spent nine years enhancing our national
technical means of verification monitoring foreign intercontinental ballistic (ICBM) missile
testing to ensure compliance with the Strategic Arms Limitation Talks (SALT) treaties. During
that period, he also contributed to the analysis of domestic ground-based missile intercept
capabilities in support of the Ballistic Missile Defense Organization (BMDO) anti-ballistic
research and development efforts. He spent another 18 years enhancing and upgrading metric
tracking capabilities for the Eastern Range space launch program at Kennedy Space Center and
12. 3
Cape Canaveral in Florida as well as for the Western Range space launch program at
Vandenberg Air Force Base in California. The researcher is presently employed as a program
manager at a small Research and Development (R&D) firm in Florida, developing new and
technically innovative capabilities for the U.S. Department of Defense (DoD). The timecard data
analyzed for this time clock rounding study was collected from this researcher’s current place of
employment.
Statement of the Problem
In 1938, the U.S. Department of Labor adopted regulations addressing time clock
rounding under the Fair Labor Standards Act (the "FLSA"), permitting businesses to employ
time rounding policies. It is fairly common practice for businesses where time clocks are used,
to record employees' starting time and stopping time to the nearest one-tenth or quarter of an
hour. It is assumed that this rounding activity averages out over time so that employees are
compensated for all time they worked. This employer practice is accepted provided that it does
not result in a failure to compensate the employees fully over a given period.
Existing federal and state legislation attempts to protect employees by restricting
potential employer abuses of time clock rounding policies that do not provide full and accurate
compensation to employees. Furthermore, established case law addressing employee time-
keeping and clock rounding behaviors primarily enforce employer abuses against employees. It
is within the constraints and guidelines of governmental legislation and judicial enforcements
that some employees seek the opportunity to exploit established clock rounding rules to
maximize personal financial benefit.
Some employees learn very quickly how to “work the clock” by employing established
rounding rules to their favor. These clock gaming activities, typically performed by a fraction of
13. 4
the total employee workforce, have an adverse effect on corporate profits and efficiency.
Companies are at risk to lose substantial profit and productivity when employees work the time
clock for self-gain. There is an adage that “time is money” and if that is so, an employee can
steal it from an employer (Franklin, 1748).
The problem being researched is the degree to which clock rounding occurs and the
associated costs to the employer. An analysis of time-keeping data was conducted to determine
the extent to which employees use clock rounding on a regular basis. The principal of
randomness would lead one to expect that employees will have an equal number of early and late
clock-in and clock-out activities. Additionally, this study attempted to determine if clock
rounding is a universal practice or limited to a sample set of the total employee population.
Significance of the Problem
Payroll is typically one of the largest expense areas for businesses and is also one of the
most difficult to reduce. A recent study of overtime pay estimates that companies tend to
overpay employees by an average of 1.2%, at least partially resulting from the application of
time-keeping rounding rules established within corporate time-keeping software systems (ADP
Advisor, 2008).
Assumptions
It was assumed that employees immediately ‘clock-in’ when arriving at work, and other
employees do not clock-in or out for other colleagues. Further, it was assumed that employees
do not often neglect to clock-in or clock-out as this would require manual correction and would
not capture or reflect the actual automated time clock recording event. Also, for any one
employee, the clock timing should typically fall within a normal distribution with a small
number of early and late clock events.
14. 5
Limitations
Limitations of a study include elements of which the researcher had no control.
Concerning this particular study, one limitation was the number of people that could be surveyed
as part of the data collection and also the number of employee’s timecards that could be
analyzed. Another limitation was the limited span of seven months of timecard data that were
available for analysis. Resources, access to participants, and time limitations likely affected the
number of participants that could be surveyed. Honesty, consistency, and reliability of research
participants were additional limitations in this study. If truthful and accurate data had not been
provided, then this certainly might have resulted in a limitation. No threats to external validity
were identified.
One potential internal validity threat was selection. This was due to the possibility that
the people surveyed may not have been within a normal and random distribution. Selection
could also have played a factor in the timecard analysis in that corporate values, employee ethics
and leadership styles may have influenced current timecard rounding practices. Another threat to
internal validity was maturation. It is possible that employees might have changed their time-
keeping behaviors during the course of this study because they matured, their behavior could
have changed as a result of leadership changes, promotions, pay raises or a change in personal
conscience.
List of Definitions
Clock-in - The act of an employee recording the time of arrival at work on a special machine.
Clock-out - The act of an employee recording the time of departure from work on a special
machine.
16. 7
TRUSTe - True Ultimate Standards Everywhere is a company that offers online privacy
management services
US-EU Safe Harbor - The United States and European Union’s framework for the protection and
safeguard of personal data
US-Swiss Safe Harbor - The United States and Switzerland’s framework for the protection and
safeguard of personal data
17. 8
Chapter II
Review of the Relevant Literature
Background
Timekeeping systems are typically established to process employee activity after the fact
with the potential effect being that employers might suffer from overspending of labor that was
not performed, reduced productivity and diminished profit. Employees who choose to repeatedly
“game” the system by taking advantage of time clock rounding (also known as “gaming” or
“time mooching”) rules throughout the workweek to play to their advantage can abuse existing
payroll timekeeping systems. A 15-minute rounding rule can potentially give employees an
extra seven minutes each time they clock-in and out which can compound over the course of a
week allowing those “gaming” employees to work fewer hours than the typical 40-hours
required for full-time employees.
Employee attitudes and behaviors. Unethical employee behavior can be defined in a
variety of ways and Lewis (1985) offers a very concise definition stating that unethical behaviors
are those behaviors that violate the moral guidance of rules, standards, principles or codes.
Perhaps the most commonly adopted definition of unethical behavior is Jones’ (1991) definition
that unethical behavior is any harmful behavior that is morally unacceptable to the larger
community. For the timekeeping data analysis portion of this study, the community was the
workplace or business employing this researcher.
In a survey conducted by Harris Interactive, a market research firm best known for the
Harris Poll, more than 700 hourly paid employees were asked if they had ever cheated on their
timecard to increase their paycheck. Twenty-one percent admitted to cheating and of those, 69%
admitted to clocking in earlier or clocking out later than what they worked. Another 22% stated
18. 9
they have added additional time to their timesheet while 14% failed to get off the clock during
breaks or meals and 5% had a co-worker clock-in or out for them (Maroney, 2009).
The Work Force Institute, a think tank that addresses human capital management issues,
conducted a recent analysis of a 6,800 employee manufacturing location. That study revealed
that clock rounding or “gaming the clock” resulted in a loss of more than 1.3% of total wages
paid by that firm. Four departments within that firm were identified as the most significant
“clock-rounder” abusers resulting in a $3.6 million annual cost (Maroney, 2009). Given that
some departments within a company were identified as greater clock rounding abusers than other
departments, there is a reason to believe that environmental factors within the workplace might
contribute to clock gaming behaviors. Some of these factors might include styles of leadership,
environmental factors, methods of compensation, and peer influences and attitudes amongst
colleagues.
A recent survey conducted by Dimensional Research indicates employees believe as
many as 4% of all employees deliberately enter incorrect time tracking information for unethical
purposes of self-gain (Dimensional Research, 2013). According to Nucleus Research, a provider
of investigative information technology research, companies tend to overpay employees by an
average of 1.2% due to inaccurate application of pay rules, as well as human errors, intentional
and otherwise as cited by ADP Advisor (2008). Recent estimates from the Association of
Certified Fraud Examiners suggests that various forms of internal fraud, including employee
time clock rounding, cost American companies as much as $400 billion per year (Wells, 1999).
Another recent case study of employee timekeeping behavior revealed time clock
rounding was one of the methods employees used to increase their wages (Holmquist, 2013). A
survey regarding the perspectives of time clock rounding was administered to students at
19. 10
colleges in the USA and South Korea. This cross-cultural analysis revealed American
participants somewhat disapproved of employees committing this timekeeping behavior for the
purpose of financial gain at the expense of their employers whereas Koreans somewhat
sympathized with this practice (Holmquist, 2013).
Ms. Disselkamp, Director at Deloitte Consulting, is a leading authority on timekeeping,
compensation, scheduling, and labor analytics systems. In her book Working the Clock: How to
Win the Race for Productivity and Profits with Workforce Management Technology, Ms.
Disselkamp provided a clock rounding example in which an employee applies some savvy in
clocking in and out, arriving to work at 8:07 rather than 8:08 so the time clock rounds to 8:00
rather than 8:15. She applied this same concept for punching in and out at lunch time and at the
end of the day and states that an employee would have the opportunity to steal up to 130 hours in
a work year (Disselkamp, 2007). In a company that might employ hundreds or thousands of
employees, the potential financial impacts on corporate profits and efficiency might be
significant. Ms. Disslekamp further stated this same rounding scenario could play to the
company’s advantage but reminds the reader the significant difference is this would only be true
if the employee behavior where random. Unfortunately, Ms. Disslekamp states people quickly
learn how to work the clock and often do so with abandon.
Ms. Disselkamp referenced the clock rounding issue again in her other book, No
Boundaries: How to Use Time and Labor Management Technology to Win the Race for Profits
and Productivity. While conducting an audit of employee clock punches, she found a consistent
daily spike in activity at the 23 minute mark, establishing that employees punch out in large
numbers at that mark to take advantage of the rounding rule to the 30 minute half hour mark as
indicated in Figure 1. Similar spikes in employees punching the clock at these similar change
20. 11
points (8, 23, and 53 minutes) were identified for the gain of 7 minutes per punch (Disselkamp,
2009).
Figure 1. Disselkamp’s payroll leakage chart.
Impact to the employer. Many organizations are facing an increased financial threat
from employee’s stealing from the workplace, ranging from fictitious sales to the theft of
common office supplies (Needleman, 2008). Along with the financial costs to organizations, this
negative employee behavior can also adversely affect morale and lead to lower overall
productivity (Dunlop & Lee, 2004). Conversely, when employees regularly engage in a
productive behavior, organizations enjoy a favorable work climate with increased productivity
(Podsakoff, MacKenzie, Paine, & Bachrach, 2000). The subtle employee theft issues, such as
employees using company property for personal use, web surfing and time clock rounding, were
cited as a growing problem by 24% of all companies in the down economy, with 13% of large
organizations considering time theft to be a problem ("Study: Down Economy Sparks Rise in
Workplace Theft - i4cp," n.d.).
21. 12
Legislation and legal case rulings. The Fair Labor Standards Act (FLSA) was passed in
1938 to protect employees from long-standing employer abuse. The United States Code of
Federal Regulation 29 section §785.48(b), defines the use of time clocks and discusses time
clock rounding as a practice that has been exercised for many years by the employer “of
recording employees' starting time and stopping time to the nearest five minutes, ten minutes or
quarter of an hour” (eCFR - Code of Federal Regulations, n.d.). It was assumed this practice
would average out over time, so the employees were fully compensated for all the time they
worked.
There have been numerous legal rulings addressing the time clock rounding rule as
defined in the FLSA. The case most often referenced by other legal rulings is the 2012 landmark
ruling involving See's Candy Shops versus the Superior Court of San Diego County. One of the
claims included See’s timekeeping policy that allowed the rounding of time up or down to the
nearest one-tenth of an hour (every six minutes) on the company’s time clock system. For
example, if an employee clocked in at 7:58 a.m. the timekeeping system would round up the time
to 8:00 am. If the employees did not ‘clock-in’ until 8:02 a.m. then the timekeeping system
rounded down the time to 8:00 a.m. See’s claimed their policy did not violate state or federal
law allowing the rounding of time. See’s lost in the trial court based on the ruling that this
practice was not lawful in California. That decision was overturned when the Court of Appeal
considered the federal regulations and concluded that an employer is entitled to use the nearest-
tenth rounding policy if the rounding policy is fair and neutral on its face. The Court of Appeal
went on to state that an employer is entitled to use a rounding policy so long as “it is used in such
a manner that it will not result, over a period of time, in failure to compensate the employees
22. 13
properly for all the time they have actually worked (See's Candy Shops v. Superior Court of San
Diego County, 2012).
That holding was consistent with federal law, and the net effect was to permit employers
to calculate hours efficiently without imposing any burden on employees. The Superior Court of
San Diego County determined the employees had not met their burden of showing that
employees were not paid fully for their work because of the rounding policy. The court also
established that the employer's expert presented conflicting evidence, concluding that the
rounding rule was both mathematically and empirically unbiased, most of the class members
were fully compensated, and the majority of class members were paid for more time than their
actual working time (See's Candy Shops v. Superior Court of San Diego County, 2012).
Another recent ruling from California’s 4th
Appellate Court involving Hernandez versus
Overhill Farms ruled in the employer’s favor concerning allegations that the employer, Overhill
Farms, had a common practice of rounding time worked at the beginning and end of each shift to
its advantage. The trial court denied the plaintiffs’ motion, and it was again denied on appeal.
Also, the plaintiffs’ class action complaint claimed that an Overhill Farms stipulation prevented
employees from punching in on the time clock any earlier than 7-minutes before the employees
scheduled start time or any later than 7-minutes after the employees scheduled hour to leave
effectively requiring the employees to remain in the plant under defendant's control, but not be
paid for the so-called "waiting time" (Hernandez, 2013). The trial court denied the plaintiffs’
motion for class certification and this opinion was upheld in the court of appeals.
Summary
In summary, the purpose of this research was to examine the processes by which
employee attitudes and behaviors affect timekeeping clock rounding practices. The current
23. 14
literature and case law suggests employee attitudes and behaviors provide many opportunities for
a sample of the employee population to abuse the timekeeping system established under the
guidelines of federal and state legislation.
Based on the literature, previous surveys and legal cases that have addressed the topic of
employee time management, it is clear the topic of employee timecard rounding should be
explored more closely. The available research presented in this literature review regarding
employees’ time theft or “time mooching” suggests this type of behavior is potentially prevalent
in the workplace. Existing research on timecard gaming provides a substantial indication that
some employees intentionally game their timecards for the purpose of self-gain.
This study contributed to the literature in three different ways. First, this study compared
the results of survey data with the analysis of actual time card data collected from a corporate
timekeeping system used by 139 employees during a period of 7 months. Second, a scenario
presented in a 2013 survey of American and South Korean college students as a cross-cultural
analysis was resubmitted in 2015 to employees within the United States workforce force. The
results obtained by United States employees in 2015 were contrasted with the results of the
original 2013 study submitted to the American and South Korean college students. Third, this
survey was presented to those same United States employees to establish time mooching
attitudes and behaviors based on gender, employee age and experience brackets. This study also
contributed methodologically to the advancement of timekeeping analysis in the workplace by
conceptualizing and measuring time clock rounding as an employee behavior, which until now,
has not been empirically examined in the current literature.
24. 15
Statement of the Hypothesis
This research affirmed that a sample of the total employee population behaved differently
in “gaming” the time clock when compared to the overall employee population. The variables
used for the time clock observation were the actual clock-in and clock-out times for each of the
139 employees employed at a small engineering and manufacturing company. Specifically, this
refers to whether the employee was clocking in and out according to a particular pattern to
increase the time recorded on the employee’s timecard. This was determined by observing
employees’ clock-in and clock-out behaviors over an extended period to establish trends in
certain employees attempting to maximize the clock-rounding effect (i.e. 8 minutes before and
after their scheduled clock-in and clock-out times, respectively). Based on a review of the
literature, as well as personal and professional experience, the following hypotheses were
posited for this study.
1. H0 - Null Hypothesis: Employees behave randomly when “clocking in” and “clocking
out” of the corporate timekeeping system, with no distinguishing clock gaming activities
measured.
2. H1 – Alternate Hypothesis: Employees do not behave randomly when “clocking in” and
“clocking out” of the corporate timekeeping system, with distinguishing clock gaming
activities measured.
25. 16
Chapter III
Research Methodology
Research Approach
The hypothesized relationships outlined in Chapter II were examined using survey
research methods and a correlational research design. As opposed to being manipulated in
experimental research, this correlational research examined variables as they naturally occur. It
was advantageous to examine the employee timekeeping clock-in and clock-out variables that
are not easily manipulated and complex multivariate models.
Chapter III provides an overview of the research design, sample characteristics, and
procedures for data collection. In addition, this study presents the measures as well as the data
analysis techniques that were used to test the hypotheses. This quantitative research study began
by examining previously published studies in the area of workplace time management,
specifically relating to timecard rounding. After reviewing the literature, a survey was prepared
to address the important questions needed to support or reject the hypotheses presented.
Employee timecard data were also collected from the researcher’s workplace for analysis of
potential clock rounding behaviors. The survey data, analyzed timecard data, and previously
published literature were triangulated and correlated to identify similarities, as well as potential
deviations.
Data were collected by sending surveys to a sample population using a quantitative
approach. Directions were provided to the respondents that explained the background of the
study and also the careful measures that were taken to ensure confidentiality. In designing the
research questions, the goal was to highlight the issues related to timekeeping management
within the workplace by surveying men and women of various ages, education, and work
29. 20
Instrument reliability. Reliability refers to an instrument’s demonstration of consistent
results over repeated periods of testing (Creswell, 2014). Unfortunately, it is not possible to
calculate reliability, but one can rely on general estimators:
•Pre-Test Reliability: The survey was tested on a small group of individuals.
•Test-Retest Reliability: The consistency of a measure evaluated over time.
For this research project, reliability was assured by making an effort to see that all
research and case studies were well documented and coded. This allowed for consistency
throughout the paper and ensured that the definitions were reliable and constant. The testing
method was assessed using coding, and data normalcy determined the goodness of fit and
expected values.
To ensure reliability, this researcher provided a detailed account of the activities involved
in building this study, the researcher’s role in obtaining the collected timekeeping data, and the
circumstances and conditions from which the timekeeping data were collected. Data collection
and analysis strategies were explained in detail so that an accurate depiction of the applied
method was understood. Further, the studied timekeeping database is included as an appendix to
this research so that others can follow and repeat the described procedures. Weekly timecard
data collected for each employee allowed for the test-retest reliability methodology to be applied
for comparison of employee behaviors across the spectrum of numerous weeks. Qualitative
reliability was assured by documenting analytical approaches applied in previous legal
proceedings and judgments resulting from similar studies and analysis (Creswell, 2014). Finally,
all aspects of this research were subject to scrutiny through peer review and by an external audit
team experienced in quantitative research methods.
30. 21
Instrument validity. Without rigor, this research would be worthless and lacking utility.
For this study, validity concerns the degree to which inferences about employees timekeeping
behaviors based upon samples of recorded timecard data are warranted. This researcher’s goal
was to produce a valid, reliable and authentic assessment providing a rich and thick description
of employee timekeeping behaviors (Creswell, 2014). Triangulation of data was achieved with
the collection through numerous sources to include surveys, observations and analysis of actual
timekeeping data.
Timecard data were collected for the entire employee population base and encompassed
the same consecutive span of time for the entire study. Content validity was assured by utilizing
the same calibrated time collection device for the entire employee population and by employing
accepted methods of statistical analysis with a reasonable correlation of test results. For survey
data, face validity was established via peer debriefing, with external auditing to ensure relevance
of the test for measurement, and review by the Project Review Committee (Creswell, 2014).
Finally, any discrepant information that might run counter to the central theme was identified
and discussed.
Survey instruments cannot be 100% valid, but validity can be measured in degrees.
According to Creswell (2014), one form of validity is:
Face validity – does the instrument give the appearance of collecting the data for which it
is being used.
For this study, validity was assured by researching and referencing accurate and precise
information from reliable, credible sources such as scientific journals, authoritative books, and
legal briefs. Also, by discussing ideas or information that may go against the data collected via
the researcher’s survey, validity was ensured.
31. 22
Instrument validity is dependent, in part, on the accuracy and thoroughness of the survey
questions. The survey questions are included in Appendix C of this research study. The Project
Review Committee established face validity, and the instrument pretest established content
validity. For the timecard data, validity was assured by extracting all timecard data for all
corporate employees spanning a period of 188 work days from January 3, 2013 to July 26, 2013.
The timecard data are included in Appendix C of this capstone project.
Procedures
A series of literature and legal cases were obtained from different electronic databases
such as LexisNexis, The Advanced Scholar Search feature in Google Scholar™, and ERAU
Hunt Library Data Base using the keywords "time clock rounding", “clock gaming", and "time
mooching". Timecard rounding falls under defined employee practices and procedures and for
this reason it was also important to search for various human resource journals, such as the
International Journal of Human Resource Management, The Journal of Human Resources,
Human Resource Management Journal, and Journal of Human Resources. This researcher
determined this electronic search yielded a sufficient number of articles and legal briefs to
determine the current state of research for this area of study. The obtained articles and briefings
were read, and some of the articles and briefings are included for reference based on relevance
and quality of content.
Only one survey was used during this study, and all questions were close-ended/multiple
choice and participants were conveniently sampled from the Unites States. Survey questions
were provided to establish time mooching attitudes and behaviors based upon gender, employee
age brackets, education and years of work experience. Prior to taking the survey, the reader was
provided with a brief description of “clock rounding” concepts. The survey asked six questions,
32. 23
establishing key demographic data and attitudes and also presented the respondents with a
written scenario asking them to rate their level of agreement or disagreement with four
statements about a described time clock rounding behavior in the workplace.
For the six survey questions, a one-dimensional chi-square goodness of fit test with α <
.05 was utilized to determine statistically if opinions and attitudes had a relationship or were
random. This one chi-square test was performed using Microsoft Excel for the survey questions
in Appendix C.
For the four scenario statements, Microsoft Excel was used to carry out a statistical
analysis with descriptive and inferential statistics with ANOVA testing. The results of the
scenario question were categorized and analyzed using dummy variables. The possible values
for responses to each item ranged from 1 (strongly agree) to 5 (strongly disagree), as explained
in Appendix C, Data Collection Device.
In addition to the survey and scenario questions, a data sample comprised of 7 months of
timekeeping records for the entire population of approximately 139 employees of a small
company was analyzed. To allow some flexibility in recording the time used for a time clock
punch, the following FLSA rounding rules are followed: Punched time was automatically
rounded to the nearest 15 minute increment using a 7-minute window. If the employee punched
in for up to 7 minutes before he or she was scheduled to start work or up to 7 minutes after the
scheduled start time, the automated timekeeping system rounded the punch-in time to the
scheduled start time. If the employee punched in 8 minutes prior to the start of the schedule, the
timekeeping system rounded to the lower quarter and deducted 15 minutes of recorded time. If
the employee punched in 8 minutes after the scheduled start time, the automated timekeeping
system rounded to the later quarter and deducted 15 minutes of recorded time.
33. 24
Using Microsoft Excel pivot tables, identification and comparison of the collected
timecard data was made by contrasting a sample of the most prolific time-clock ‘gamers’ against
the total employee population. Pivot tables were built into Excel to identify clock-in and clock-
out activity as it pertains to the 15-minute rounding rule. The pivot tables were used to identify
and correlate spikes in employees punching the clock at similar clock transition points (7, 23, 37
and 53 minutes) that would provide the maximum gain to the employee of 7 minutes per punch.
These timekeeping data were then compared with standard Microsoft Excel data sorting
routines to evaluate 40,777 clock events for this population of 139 employees, spanning 188
working days, over a period of 7 months so that potential clock rounding trends could be
identified. Trends relating to clock rounding activities were identified with spikes to employee
time clock recording events, indicating a cumulative effect of employees punching out in large
numbers at key change points on the time clock. These spikes in the time clock occurred at
similar change points of 7, 23, 37 and 53 minutes for the maximum possible gain of 7 minutes
per punch (Disselkamp, 2009).
Specifically, data filtering was conducted to establish the following patterns for employee
clock-in activity: If an employee clocked in from :01 to :07 or from :31 to :37 on the time clock,
clock rounding benefited that employee. The closer the time punch got to the :07 or :37 mark on
the clock, the greater the rounding benefit during the clock-in to obtain the maximum gain of
seven minutes per punch. If an employee clocked out from: 23 to :29 or from :53 to :59 on the
time clock, clock rounding benefited that employee. The closer the time punch got to the :23 or
:53 mark on the clock, the greater the rounding benefit during the clock-out to obtain the
maximum gain of seven minutes per punch.
34. 25
This project is the very first to correlate employee attitudes obtained through scenario and
survey data against actual behavioral data collected from employee timecards. This study sought
to test the alternate hypothesis that clock rounding is practiced by a sample of the employee
population. Using a correlational approach, this researcher established a quantitative and
statistically significant difference in time-keeping activities among the sample group and the
total employee population. If the MAS time-keeping rounding data had been found to be largely
random, it would have been determined that the hypothesis was not correct because the rounding
rule was applied fairly and neutrally and was used in a manner that would not result, over a
period of time, in failure to compensate employees properly for all the time they actually worked
(eCFR - Code of Federal Regulations, n.d.). If on the other hand, because a portion of the MAS
time-keeping rounding data does not appear to be random, it has been determined that the
hypothesis is correct because a sample of the employee time-keeping rounding activity was
intentionally “gamed” for the purpose of employee self-gain.
Assumptions
For the survey portion, it was assumed that the survey participants were honest and
provided insightful information and data that could be used to test the hypothesis of this study.
The data gathered from the surveys was compared to the data gathered from previously
published literature to determine if the majority of participants were candid regarding the
information requested in the surveys.
For the analysis of time-keeping data, there were explicit assumptions within the research
focus of this study; specifically it was assumed that the time clock was correct and calibrated on
a normal basis. It was also assumed that the vast majorities of timecard entries reflected the
employees’ actual arrival and departure and were not hand edited after the fact. Each employee
35. 26
hand edit might potentially perturb the time-keeping data as it might not reflect the employees’
actual arrival and departure activity for each recordable instance manipulated.
Limitations
Limitations of a study include elements of which the researcher has no control. With
regard to this particular study, one limitation was the number of people that responded to the
survey as part of the data. Another limitation was the total number of employee’s timecards as
well as the limited span of 7 months of timecard data that were available for analysis.
Resources, access to participants, and time limitations likely affected the number of participants
that could be surveyed. Honesty, consistency, and reliability of research participants were
additional limitations in this study. If truthful and accurate data were not provided, then this
certainly resulted in a limitation. There were no threats to external validity.
One internal validity threat was the selection. This was due to the possibility that the
people surveyed may not have been within a normal and random distribution. Selection could
have also played a factor in the timecard analysis in that corporate values, employee ethics, and
leadership styles may have influenced timecard rounding practices while these same variables
might not have a similar influence and effect at another company. Another threat to internal
validity was maturation. It is possible employees might have changed their time-keeping
behaviors during the course of this study because they matured their behavior as a result of
leadership changes, environmental changes, promotions, pay raises, peer pressure or a change in
personal conscience.
37. 28
All researchers must consider that the reporting of results is a part of the research ethics.
Results and conclusions were carefully reviewed before being submitted and/or published. All
of these issues were taken into consideration when thinking about ethical obligations while
conducting this research.
38. 29
Chapter IV
Results
Timecard Employee Data
Analysis of employee time-keeping activity during this 188 work-day period indicated a
sample of employees were motivated to game the clock and were able to affect this activity. The
data also indicate the employees purposefully round the time clock were more able to do so
during clock-out periods with 79.6% of all clock rounding hours lost (518 of the 651 total hours
rounded shown in Table 1) during the clock-out activity.
Table 1
Data Totals for All 139 Employees
Sum of Clock-In Variances
(minutes)
Sum of Clock-Out Variances
(minutes)
Employee's gain/-loss (hours)
-8,008 -31,071 -651.32
Rounding was not as prevalent during employee clock-ins and this is indicated in Table
1. Clock rounding is likely less prevalent due to the employee’s inability to control arrival due to
unpredictable vehicle traffic light activity as well as variable traffic flow (i.e., random traffic
lights, school bus stops, railway train track stoppage, etc.) interruptions. In fact, total employee
activity indicates only 133 productive hours (-8008 min / 60) for all 139 employees total
recorded clock-in time were lost during the 188 clock-in days.
39. 30
Table 2
106 of 139 Employees Not Practicing Rounding
Sum of Clock-In Variances
(minutes)
Sum of Clock-Out Variances
(minutes)
Employee's gain/-loss (hours)
3,222 -9,165 -99.05
For the 106 employees not actively practicing clock rounding, total employee activity
indicated 54 hours of employee time (3222 min / 60) was donated to the company during clock-
ins as indicated in Table 2. For clock out activity, these employees had a minimal negative
effect with the company losing an average of less than one hour per employee, approximately
double the hours donated to the company during clock-in events.
For the 23.7% of employees that appear to have actively engaged in time clock rounding,
this group of 33 employees successfully “gamed” the clock to their favor with 187 hours
(-11,230 min / 60) unproductively paid to these employees during clock-in events as revealed in
Table 3. For clock out activity, Table 3 shows these same employees were better able to
influence time- card rounding activity to their benefit during clock-out departures with an
additional 365 hours (-21,906 min / 60) of unearned compensation.
Table 3
33 Employees Practicing Rounding
Sum of Clock-In Variances
(minutes)
Sum of Clock-Out Variances
(minutes)
Employee's gain/-loss (hours)
-11,230 -21,906 552.27
The total unearned compensation for these 33 employees actively clock rounding during
clock-in and clock-out periods during this study totals 552.27 hours. The time clock gaming
40. 31
activities performed by these 33 employees during a period of 188 work days averages nearly 17
hours per person (552.17 / 33 = 16.74) as shown in Table 3.
Employee Timecard Analysis
Figure 2 reflects clock-out time-keeping data for an individual employee practicing time
rounding techniques over a 7-month period comprising a total of 188 work days.
Figure 2. Individual employee is practicing clock-rounding.
As indicated in the data, there are significant clock-out peaks reflected at :23 where the
time would round forward by 7 minutes to the employees benefit. The employee clock-out data
peaks at the :08 mark and would have rolled the time data forward to :15 for the benefit of the
employee. There is also peak data indicated at the :38 mark, rolling the time clock forward 7
minutes to reward the employee with a measured departure time of :45. There is another spike at
the :53 minute interval where the time clock would recognize and reward the employee departure
as 7 minutes later at :00 for any given work hour.
Clock-out periods are measured as time periods in which an employee would clock-out to
leave the work location for lunch or at the end of a work shift. For this sample data, employee
0
1
2
3
4
5
6
0
3
6
9
12
15
18
21
24
27
30
33
36
39
42
45
48
51
54
57
More
EmployeeClock-out
Measurements
0 to 60 Minutes
Frequency
Clock-out Rounding
41. 32
“gaming” of the time clock to maximize work hour earnings accrual would indicate peaks at
around :07, :23, :38 and :53 minutes for any given work hour.
An unexpected result was determined when analyzing the raw employee timecard data.
Every salaried employee (approximately 85% of the 139 employee population) is granted the
privilege to hand edit their time card data and there are significant clock-in and clock-out peaks
occurring at the :00, :15, :30 and :45 minute intervals. Some of this hand editing might naturally
result from employees entering vacation time or backfilling their timecards after attending off-
site training or seminars. Given the high incidence of manual intervention to the time-keeping
system as indicated in Figure 3, it is also possible that a large portion of these employees might
have been tempted to perturb the time clock data to influence their recorded time favorably at
work.
The input data recorded for these four timecard intervals are significantly outside of what
would be considered a normal and random distribution. The results in Figure 3 make it apparent
that the four time values (:00, :15, :30 and :45) were heavily manipulated via hand entry and not
through automated clock-in or clock-out functions. While some of this hand editing activity can
be reasonably explained, the abundance of these clocked times reflect employees overriding the
automatic data collection process for a variety of other reasons, some of which are likely to be
more justifiable than others.
Figure 3 indicates uncapped timecard entries for the four time periods that are heavily
edited with 12,511 entries at :00, 7,405 at :15, 4,655 at :30 and 4,955 inputs at the :45 minute
interval.
42. 33
Figure 3. Employee timecard activity at :00, :15, :30 and :45.
Figure 4 reflects these same timecard clock-in entries for :00, :15, :30 and :45 but this
time they are capped at 300 total entries on the Y-axis. All other time periods are uncapped and
is representative of clock-in data with a normal and random distribution for 139 employees
spanning 188 work days.
0
2000
4000
6000
8000
10000
12000
14000 0.00
3.00
6.00
9.00
12.00
15.00
18.00
21.00
24.00
27.00
30.00
33.00
36.00
39.00
42.00
45.00
48.00
51.00
54.00
57.00
More
NumberofEmployeeTimecardentires
0 to 60 Minutes on the Time Clock
Frequency
43. 34
Figure 4. Clock-in employee timecard clipped at 300 on Y-axis.
Figure 5 indicates these same timecard clock-out entries for :00, :15, :30 and :45 but
again, they are capped on the Y-axis at 300 total entries. All other time periods are uncapped
and are representative of clock-out data with a normal and random distribution for 139
employees spanning 188 work days:
Figure 5. Clock-out employee activity clipped at 300 on Y-axis.
0
50
100
150
200
250
300
0.00
3.00
6.00
9.00
12.00
15.00
18.00
21.00
24.00
27.00
30.00
33.00
36.00
39.00
42.00
45.00
48.00
51.00
54.00
57.00
More
NumberofEmployeesTimeCardEntries
0 to 60 Minutes on the Time Clock
Frequency
0
50
100
150
200
250
300
0.00
3.00
6.00
9.00
12.00
15.00
18.00
21.00
24.00
27.00
30.00
33.00
36.00
39.00
42.00
45.00
48.00
51.00
54.00
57.00
More
NumberofEmployeesTimeCardEntries
0 to 60 Minutes on the Time Clock
Frequency
44. 35
Employee Survey Data
Survey participants were presented with survey questions and a written scenario
describing a clock-rounding practice and asked to rate their level of agreement or disagreement
with four statements about the behavior. There were 100 total participants, all from the United
States. Of the respondents, 61 (62.24%) were male and 37 (37.76%) were female with two
participants choosing to not respond to the gender question. There was significant age diversity
with 4 (4%) people between the age of 22 and 25, 6 (6%) were between 26 and 29, 20 (20%)
between 30 and 35, 9 (9%) between 36 and 39, 30 (30%) between 40 and 49, 22 (22%) between
50 and 59 and 9 (9%) were 60 or over. All respondents had a minimum of a high school
education 10 (10%), while 9 (9%) had completed two years of college, 53 (53%) had finished
four years of college and 28 (28%) had completed graduate school.
A timecard scenario was presented to the survey participants and was followed by four
statements regarding ethical aspects of the time-keeping behavior. Each statement was followed
by five possible answers that were based on a Likert scale. Participants completed the survey
that contained general demographic questions of age, gender and education level. This was
followed by a description of the time-keeping scenario as follows: At your place of work, you
notice a group of employees that always clock in 8 minutes early and clock out 8 minutes late.
When you ask one of the employees why they do this, you are told the clock pays using a 15
minute system. By clocking in 8 minutes early it rounds up to 15 minutes of pay. By doing the
same when it is time to clock-out, those 8 minutes become 15 minutes of pay, for an extra 30
minutes of total pay per day.
Four statements regarding this scenario were then presented. The participants were asked
to indicate their level of agreement or disagreement with each statement based on a Likert scale
45. 36
(a, strongly agree; b, somewhat agree; c, neutral; d, somewhat disagree; e, strongly disagree) by
answering their responses on the survey. The respondents answers were encoded as the values 1
through 5, with strongly agree valued at 1 point and strongly disagree valued at 5 points.
Items 1 and 2 were statements that presented the time-keeping behavior in the scenario in
a favorable light. The items were as follows:
1. This is a smart move by the employees; I will start to do the same.
2. Big companies take advantage of employees. The employees have a right to do this.
Items 3 and 4 portray the behavior in a negative light. The items were as follows:
3. This practice is wrong, and I will not get involved.
4. I need to tell management what the employees are doing.
The results were categorized using dummy variables. Excel calculations were applied to
conduct statistical analyses with descriptive and inferential statistics, including ANOVA, Chi
square and t-test testing. For the Chi square goodness of fit test, the survey data indicate there
are strong and distinct opinions and the responses were not random. The t-tests revealed that
there were no significant differences for responses based on gender. The ANOVA test was
applied for age and education, and no significant differences were identified for the survey
responses
As stated above, the possible values for responses to each item range from 1 (strongly
agree) to 5 (strongly disagree). The overall findings of this study place the opinions for the
fourth item close to neutral (3.0). For Items 1 and 2, the respondents expressed fairly strong
opposition to the concept of timecard rounding as shown in Table 4.
46. 37
Table 4
Lott, U.S. Worker Survey
Participants M SD
Item 1 100 4.15 1.19
Item 2 100 4.14 1.08
Item 3 100 1.97 1.29
Item 4 100 2.6 1.26
This contrasted with the Holmquist 2013 study in that the median response was close to
neutral (3.0) for all four scenario questions which is indicated in Table 5 for U.S. and South
Korean college students.
Table 5
Holmquist, U.S. and South Korean College Survey
Participants M SD
Item 1 333 2.95 1.2
Item 2 332 2.89 1.11
Item 3 333 2.89 1.1
Item 4 333 3.26 1.05
For the Lott survey, with 2.00 representing ‘somewhat agree’, 3.00 representing ‘neutral’,
4.00 representing ‘somewhat disagree’ and 5.00 being ‘strongly disagree’, the responses for
Items 1 (“This is a smart move by the employees; I will start to do the same”) and 2 (“Big
companies take advantage of employees. The employees have a right to do this”) fell between
somewhat agree’ and ‘strongly disagree’. The mean response to Item 3 (“This practice is wrong
and I will not get involved”) was between ‘moderate agreement’ and ‘neutral’. Finally, the mean
response to Item 4 (“I need to tell management what the employees are doing”) was very close to
47. 38
completely ‘neutral’. For the Holmquist survey, the responses to Items 1, 2 and 3 were all
between ‘somewhat agree’ and ‘neutral’. The mean response to Item 4 was between ‘neutral’
and ‘somewhat disagree’.
48. 39
Chapter V
Discussion
Measured Behaviors of Clock Rounding
Employees who choose to game the system by taking advantage of time clock rounding
rules can abuse existing payroll time-keeping systems. An unexpected result was determined
when analyzing the raw employee timecard data. Because every salaried employee is allowed to
‘hand edit’ their personal timecard data, there are significant clock-in and clock-out peaks
occurring at the:00, :15, :30 and :45 minute intervals. For salaried non-exempt employees that
qualify for additional compensation after a minimum of 45 hours are recorded for the week, time
clock rounding may be utilized by some of those employees to achieve the minimum 45 hour
threshold.
‘Rounding’ was not as prevalent during employee clock-ins as it was for clock-outs
because of the employee’s inability to control traffic flow and other factors affecting arrival. The
employee is better able to affect and influence clock-out rounding activities because there are
fewer uncontrollable variables that could potentially hinder the ability to game the time clock
system.
Determined Attitudes from the Survey
For the Holmquist survey, the overall results had a mean response ranging from 2.95 to
3.26 across all four scenario survey items. That showed the general consensus across all
participants was one of neutrality on the practice of clocking in 8 minutes early and clocking out
8 minutes late to receive 30 minutes worth of pay for a total of only 16 minutes on the job. The
statement in Item 1 inferred that the participant would be willing to partake in the deceptive
time-keeping behavior themselves. The results show that the U.S. and South Korean college
49. 40
student participants in the Holmquist study are neutral with this behavior (M = 2.95), indicating
that they had no strong opinion relating to an employee taking advantage of the payroll’s time
rounding practice. This differs significantly from the Lott survey of U.S. participants who were
less supportive of this behavior (M = 4.15), and whose responses indicate that they would be less
willing to engage in this behavior themselves. Item 2 stated that big companies took advantage
of employees, thereby giving the employees the right to take advantage of the payroll time clock.
The results show that participants from the Lott study were significantly more in disagreement
(M = 4.14) with this statement than those from the Holmquist study (M = 2.89), who were
neutral with regard to this practice. The responses to Items 1 and 2 showed no relationship with
age, gender and education levels for the Lott study.
Item 3 stated that the time-keeping behavior is wrong and that the participant would not
get involved in it. The Lott study indicated the majority of the responses are in the somewhat
agree to neutral range (M = 1.97), and the Holmquist responses have a distribution in the neutral
range (M = 2.89).
Item 4 conveyed the importance of informing management of coworkers’ unethical time-
keeping behavior. The Lott study (M = 2.60) and the Holmquist study (M = 3.26) were
significantly different, such that the Lott study participants were between somewhat agree and
neutral while the Holmquist participants were in greater disagreement with this statement.
Overall, the mean results showed neutrality regarding unethical time-keeping behavior
when the responses were averaged across all South Korean and U.S. college student participants
in the Holmquist study. Given that the participants were college students and having minimal
exposure to the workplace, this could be a consequence of their lack of experience in these
matters. Consequently, the Lott survey drawn from a convenient sample of the population within
50. 41
the current U.S. revealed different attitudes from the students that were sampled in the Homquist
study.
Interestingly, the survey response to Question 4 in the Lott survey “Have you ever
‘gamed’ a time clock or time-keeping device with clock rounding techniques to enhance your
recorded work hours?” showed that 20% of respondents admitted to having previously cheated
on their timecards. This correlates well to the measured time-keeping behavior in the Lott study
that took place at an engineering research and development company located in the USA, where
33 out of 139, or 23.7%, of the employees routinely committed the act. Thus, the measured
unethical time-keeping behavior was not contradicted by the mean response found in the Lott
survey and scenario study that felt this behavior was ‘wrong’ and that they ‘would not get
involved’. Therefore, the conclusion is drawn that ethical time-keeping behavior of a majority of
employees will likely occur but a minority of employees may be highly susceptible to influences
of greed or other unethical practices that would negatively influence timecard record keeping.
51. 42
Chapter VI
Conclusions
Clock Rounding
While employees who choose to game the system can take advantage of time clock
rounding rules, the timecard data analyzed for this study indicated only a fraction of employees
employ these tactics. Similar to the Work Force Institute study previously referenced, a
measured loss of total wages paid is the result of some percentage of employees gaming the time
clock. Given that rounding is practiced by a fraction of all employees, it is worth considering
potential environmental factors as well as how this behavior might affect corporate productivity
and profitability and overall employee morale within this company.
If the time clock gaming activities performed by the 33 employees during a period of 188
work days were annualized, these same employees would reap the benefit of 705 hours in total,
or 21.36 hours for each employee. If each extra hour of pay equaled $45, the employee would be
receiving an extra $961 annually and the company would pay out $31,720 in non-productive
compensation for these 33 employees (23% of the company workforce). If this behavior were
executed by a greater percentage of the employee workforce, then the company’s total
expenditures and losses for this practice would rise proportionally. No matter what the case, it is
a substantial sum over a period of time.
Another conclusion that was not anticipated prior to this analysis was the significant
amount of timecard editing employed by the salaried employees, resulting in a bypass of the
existing automated time collection system. The high occurrence of hand editing captured in the
raw timecard data could be indicative of a broken time collection process within this company
and is worthy of additional future analysis.
52. 43
Survey
The results of the survey show that the US worker compared against the US and South
Korean college cultures are somewhat different, as the mean responses to all items hovered
around neutrality for the college students whereas the surveyed US workers had strong opinions
on the topic of timecard rounding. Being that the Holmquist survey was administered to college
students without much experience in the workplace, this could indicate collectivism of an in-
group or team orientation, such as friends and colleagues, rather than an institutional nature
(Holmquist, 2013). These findings are in general agreement to what was suggested by the
literature review. The expectation that a sample group of workers would seek personal gain
suggests greater support for the time-keeping manipulation and this is reflected in the survey and
scenario questionnaire. In addition, Question 4 in the survey clearly demonstrates that 20%
readily admitted to committing this unethical behavior and that result also generally agrees with
the collected timecard data.
53. 44
Chapter VII
Recommendations
Round by Pay Period, Not by Clock Event
One solution resulting from this research might be to stop rounding for each clock-in or
clock-out event. Instead, it might make better sense for employers to round employee time clock
data for a defined pay period. Rather than rounding each clock-in or clock-out, the employer
could implement a rounding event after totaling all the time worked for a given pay period. For
employers currently rounding to the nearest quarter-hour, rounding by pay period would
eliminate their losses resulting from unnecessarily losing as much as 7 minutes of wages and
productivity with each employee clock-in and clock-out event.
If the practice of rounding by pay period rather than each time clock event was
implemented, it is suggested that the employer always round to the employee’s advantage. The
most bonus time an employee could receive from a rounding event using this scenario is 14
minutes each pay period and the chance of that happening is not great because it would be far
more challenging for an employee to game the clock in this proposed scenario and the limited
return of minutes gained would not be significant enough to warrant the effort.
It is worth reconsidering allowing all salaried employees the privilege of hand editing
time clock activity without management review and approval. The timecard data clearly indicate
an exorbitant number of timecard entries manually edited by numerous employees, rather than
allowing the data to be automatically collected through the time-keeping program installed on
their computers. The result of this exorbitant hand editing has corrupted the intent of allowing
the automatic timecard collection system to collect those data.
Finally, once corrections are implemented, similar clock rounding measurements should
54. 45
be taken in the future to measure the progress resulting from changes to the time management
system.
Employee and Management Attitude Adjustment
The findings from the observation were from a small sample with similar demographics
in a specified industry. Future research could investigate places of employment that contain a
broader base of demographics, such as a manufacturing facility or service industry, to measure
this behavior beyond the engineering research and development business that was studied.
The survey results gave compelling findings from a convenient sample of workers in the
US and provided a contrast to the results of the previous survey of South Korean and US college
students. The results from the college students were notably different from the US workers with
a different age and work experience. The number of participants from these two surveys is likely
too small for testing for significant differences, thereby warranting a future study in which a
greater number of participants are sampled.
55. 46
References
ADP Advisor. (2008). Time (keeping) is money. Companies find that automating time and labor
management yields substantial savings. Retrieved from
http://www.adp.com/advisor/pdf/winter_2008.pdf
Creswell, J. W. (2009). Research design: Qualitative, quantitative, and mixed methods
approaches (3rd ed.). Los Angeles, CA: Sage.
Disselkamp, L. (2007). Working the clock: How to win the race for productivity and profits with
workforce management technology. Richmond, VA.: Oaklea Press.
Disselkamp, L. (2009). No boundaries how to use time and labor management technology to win
the race for profits and productivity. Hoboken, N.J.: Wiley.
Dimensional Research. (2013, July). Lies, damned lies and timesheet data: A time tracking
survey. Retrieved from
http://www.replicon.com/sites/default/files/docs/Replicon_Survey-Time_Tracking.pdf
Dunlop, P. D., & Lee, K. (2004). Workplace deviance, organizational citizenship behavior, and
business unit performance: the bad apples do spoil the whole barrel. Journal of
Organizational Behavior, 25, 67-80.
eCFR - Code of Federal Regulations. (n.d.). Retrieved from http://www.ecfr.gov/cgi-
bin/retrieveECFR?gp=&SID=89881fdbe222dfea1a43b98aaed8f39b&r=PART&n=
29y3.1.1.2.45
Ethical principles of psychologists and code of conduct. (1992). Retrieved from
http://www.apa.org/ethics/code/code-1992.aspx
Franklin, B. (1748, July 21). Advice to a young tradesman. Retrieved from
http://founders.archives.gov/documents/Franklin/01-03-02-0130
Hernandez v. Overhill Farms, Cal. App. 4th, Cal. Ct. App. (2013, November 6). Retrieved from
http://scholar.google.com/scholar_case?case=14079447594630598158&q=Hernandez+v.
+Overhill+Farms&hl=en&as_sdt=6,27&as_vis=1
Holmquist, J. P. (2013). Workplace ethics at the time clock: fudging time with respect to
Western and Eastern views, The International Journal of Human Resource Management,
24(11), 2221-2236, DOI: 10.1080/09585192.2012.723018
56. 47
Jones, T. M. (1991). Ethical decision making by individuals in organizations: An issue
contingent model. Academy of Management Review, 16, 366-395.
Lewis, P. V. (1985). Defining "business ethics": Like nailing Jello to a wall. Journal of Business
Ethics, 4: 377-85.
Maroney, J. (2009, June 15). Gaming the Clock - The Workforce Institute | The Workforce
Institute. (n.d.).Retrieved from http://www.workforceinstitute.org/blog/gaming-the-clock/
Needleman, S. E. (2008, December 11). Businesses say theft by their workers is up. The Wall
Street Journal. Retrieved from http://online.wsj.com/articles/SB122896381748896999
Podsakoff, P. M., MacKenzie, S. B., Paine, J. B., & Bachrach, D. G. (2000). Organizational
citizenship behaviors: A critical review of the theoretical and empirical literature and
suggestions for future research. Journal of Management, 26, 513-563.
Privacy Policy | SurveyMonkey. (n.d.). Retrieved from
https://www.surveymonkey.com/mp/policy/privacy-policy-20110627/
See's Candy Shops v. Superior Court of San Diego Cnty., 210 Cal. App. 4th 889, Cal. Ct. App.
(2012). Retrieved from http://www.orrick.com/Events-and-
Publications/Documents/4977.pdf
Study: Down economy sparks rise in workplace theft - i4cp. (n.d.). Retrieved from
http://www.i4cp.com/news/2008/12/11/study-down-economy-sparks-rise-in-workplace-
theft
Wells, J. T. (1999). A fistful of dollars. Security Management, 43(8), 70-75.
59. 50
Bibliography
American Psychological Association. (2010). Publication manual of the American Psychological
Association (6th ed.). Washington, DC: Author.
Department of Business Administration capstone guide. (2010, February). Daytona Beach, FL:
Embry-Riddle Aeronautical University, Department of Business Administration.
Levine, D. M, Stephan, D. F., Krehbiel, T. C., Berenson, M. L. (2011). Statistics for managers:
Using Microsoft Excel (6th ed.). Upper Saddle River, NJ: Prentice Hall.
61. 52
Dear Dr. Harsha & Mr. Lott,
The Chair of the IRB has reviewed your protocol application titled, Employee Time-keeping:
The Effects of Clock Rounding on Corporate Profit and has determined that it meets the
requirement for exemption. You may proceed with your research.
Attached is the Determination Form for your records - best of luck in your endeavors.
Teri Gabriel, MPA, CRA
Human Protections Administrator & Research Analyst
Research & Graduate Studies
600 S Clyde Morris Blvd
Daytona Beach, FL 32118
386.226.7179
Teri.gabriel@erau.edu
71. 62
The survey questions are provided:
1. What is your gender?
o Male
o Female
2. What is your age?
o Less than 18
o 18 - 21
o 22 - 25
o 26 - 29
o 30 – 35
o 36 – 39
o 40 – 49
o 50 – 59
o Over 60
3. What is your level of education?
o Did not finish high school
o High school graduate
o 2 years of college
o 4 years of college
o Graduate degree
4. Have you ever “gamed” a time clock or time-keeping device with clock rounding
techniques to enhance your recorded work hours?
o Yes
o No
o I don’t know
5. Do you believe that other employees within your workplace “game” the time
clock to maximize your recorded work hours with clock rounding techniques?
o Yes
o No
o I don’t know
6. Which of the following attitudes do you believe would motivate an employee to
take advantage of the time clock?
o They think everyone else is doing it
o They believe it is no big deal
o They think this is just how we do it here
o They assume the work performed here makes the company a ton of money
o They don’t really care
72. 63
At your place of work, you notice a group of employees that always clock in 8 minutes
early and clock out 8 minutes late. When you ask one of the employees why they do this, you
are told that the clock pays by a 15 minute system. By clocking in 8 minutes early it rounds up
to 15 minutes of pay. By doing the same when it is time to clock-out, those 8 minutes become
15 minutes of pay, for an extra 30 minutes of total pay per day. How much do you agree with the
following statements?
7. This is a smart move by the employees; I will start to do the same;
o Strongly Agree
o Somewhat agree
o Neutral
o Somewhat disagree
o Strongly disagree
8. Big companies take advantage of employees. The employees have a right to do
this.
o Strongly Agree
o Somewhat agree
o Neutral
o Somewhat disagree
o Strongly disagree
9. This practice is wrong and I will not get involved;
o Strongly Agree
o Somewhat agree
o Neutral
o Somewhat disagree
o Strongly disagree
10. I need to tell management what the employees are doing.
o Strongly Agree
o Somewhat agree
o Neutral
o Somewhat disagree
o Strongly disagree
