One of the interesting points I ran across recently was from The Telecommuter Manifesto. A post on the productivity paradox (the more productive you are, the more work you get, meaning you work harder, but for the same amount of money) really got me thinking about an aspect of working from home that we sometimes overlook: Are you working at a task-based job, or a time-based job?

Task-based work from home

If you are doing a task-based job, you are paid by the tasks you complete. As a freelance writer, I am very familiar with this type of compensation. I am paid per word, per post or per project. If someone asked me my hourly rate, I would have to estimate by how long it takes me to complete the task I am given. The upside to this mode of pay is that I end up with a high hourly rate — and more free time — if I can complete a project quickly. The downside is that if a project takes longer than I thought, it can be a very inefficient use of my time, reducing my overall hourly rate.

Time-based work from home

As you might guess, time-based work is paid hourly. You get the same rate, for however many hours you work. For telecommuters working for someone else, this means that you are expected to be “logged in” and at your workstation between specific hours. For those with a home business (especially freelancing or consulting), it means you charge an hourly rate, and you get paid for how long your services are used. The upside is that you always get paid your rate. The downside is that if you take too long, you run the risk of having your charges disputed. For telecommuters, there is a good chance that you end up a victim of the productivity paradox.

The Telecommuter Manifesto explains the difference in productivity paradox between task-based and time-based telecommuting:

Telecommuters whose jobs are task-based, rather than time-based, are most able to avoid the productivity paradox.  For them, the added productivity of telecommuting will allow tasks to be completed more efficiently and quickly, freeing up even more time for persuits that directly correlate their efforts with their earnings.  Time-based telecommuters are even harder hit by the productivity paradox than office workers.  Without proper monitoring of how productivity gains are exploited, such workers may quickly burn out or take actions that jeopordize the continued management support necessary to remain a telecommuter.

I think I like being task-based. It seems to give me a little more freedom overall. What about you? Do you charge by project, or by the hour? Has it affected your productivity?