TABLE OF CONTENTS Practically all activities employees perform have a component, either large or small, of nonproductive time.
Let us assume that the legal firm from the previous chapter sends a daily update (between 5 or 10 pages) to 600 of the 850 employees. This update details changes, or articles of interest, relevant to each professional's area of specialization and takes approximately 25 minutes to read. The information is then stored in a file, where it can be referenced should the need arise.
Conventional management systems would not typically attach a financial cost to such an activity or a financial benefit. The purpose of International Intangible Standards is to assign a financial cost and a financial benefit to such activities.
On a daily basis, each staff member will be losing 25 minutes of productive time that could be charged to clients at the average rate of $245 per hour. This equates to daily "information cost" of $102.08 per employee, or $61,250 for the group. Over a 5-day working week, the cost of reading updates would be $306,250 per week. If staff are paid $25 per hour, then the wage allocation cost of reading the information will be $10.42 per staff member per day. For the group of 600 staff, this nonproductive wage allocation cost becomes $6,250, or $31,250 for a week. If we assume 4 weeks in a month, then the nonproductive wage allocation cost will be $125,000 and the associated productivity loss will be $1,225,000, creating a total real cost...
