>>>In any given year, you have X hours you can bill. Once an hour is gone, it is gone forever. You can never make it up.
>>
>>John,
>>This assumes you do Time and Material work and not Fixed Price. We'll have to talk sometime about the Virtual Man-hour (something I pitched to a former boss of mine). ;-)
>
>Well there was a thing called norm-hour, which was the basic calculation unit in physical production (assembly lines, car repair etc) back home. This meant that there is some normative catalogue, where each operation is normed (carburetor change 3 hours, wall painting 0.25 hours per square meter etc). Anyone who knows how to do it faster was still entitled to calculate the norm hours into the price, and the slower ones actually got paid less per actual hour.
>
>Now this could be done in any industry where technology is stable and the procedures are predefined - how many new inventions does it take to replace a tire? - but it can hardly apply to this business where technologies change anually. By the time any of computing work is normed, it would be obsolete. If a form takes 5 minutes per control, plus 20 minutes per custom method in any control, any guy who would write a builder to cram this custom coude in a minute would soon be doing 20 norm hours in 8 physical hours. And there's the rub - we do want this guy to do it faster, but then how do we encourage him to do it, and still not overpay him?
>

Dragan,
If multiple developers exist in your shop, the norm-hour could be calculated based on the average it would take each of several devlopers. It could also be formulated based on what it would take the mid-level developer (no averaging done here).

However, depending on the contract, this could constitute fraud. If you have to specify who will be working on the project, then you could get into trouble if you put your best person on it after telling the client that the mid-level person woujld be doing the work.

But if there is no specification of who will be doing the work and the client signs off on the price, it is assumed they believe the value of the finished product to be equal to or greater than the price paid. There should be no trouble assigning different resources to maximize the profit.