Earned Work: Measuring Project Performance

Earned Work Management is a lightweight, approach-agnostic project performance measurement system that supports Waterfall, Scrum, and Kanban. This allows organizations employing different project approaches to measure project portfolio performance consistently.

Earned Work (EWM) measures project performance by analyzing Planned Work (PW) and completed or Earned Work (EW). Work is defined broadly as a project deliverable. Comparing planned versus completed work allows us to calculate a Work Performance Index (WPI), Work Completion Percentage (WCP), and project the Estimated Completion Date (ECD).

Earned Work complements and supplements other well-established project performance metrics (e.g., critical path, velocity, and flow metrics). Its benefit is its ability to provide a high-level and consistent metric for program and portfolio performance. The metrics can provide early warning signals.

The well-established Earned Value Management provides the conceptual underpinning for Earned Work. Earned Value monetizes the project scope and schedule and facilitates measuring project performance (scope, schedule, and cost) in dollars. Earned Value is complex and primarily used only for large engineering or military systems projects. By contrast, Earned Work is more straightforward and can be more easily and readily used.

Earned Work Metrics

Projects create products, services, and results. Having clearly defined deliverables and outcomes facilitates measuring performance. Work completion should be unambiguous and measurable. Acceptance is binary—done or not done. This avoids conflating effort with progress.

Project performance measures that assess effort always disappoint because of the “90% Rule”: 90% percent of project tasks are 90% done 90% of the time, and the last 10% takes 90% of the time.”

Planned Work (PW)

Planned Work is the number of items expected to be completed each period. Work items and time periods are broadly defined, allowing project teams to tailor the tool to the project’s context and needs. Work items can be deliverables, work packages, features, stories, or Kanban cards. Establishing a delivery plan or roadmap creates transparency and the ability to measure progress.

Waterfall projects use a work breakdown structure to decompose project deliverables into work packages. Work packages are small enough to estimate the time and cost required to deliver them and can be assigned. The project Gantt Chart can be configured to track the completion of the work packages or Planned Work.

Agile projects using Scrum or similar frameworks generally decompose work into epics, features, and user stories. Epics are like mini-projects that deliver significant functionality and may take a quarter or more to complete. Features deliver user capabilities and can be completed in one or more Sprints or Iterations. User stories are like requirements and describe how users will consume and benefit from that functionality.

On Agile projects, a roadmap that plots feature delivery by iteration or month represents Planned Work.

Kanban is a flow-based work management system. Kanban boards track the progression of work items from the backlog through development and completion. Work items are added to the backlog and prioritized based on their value or importance.

Kanban teams focus on flow and do not generally plan when the work items will be completed. To support EWM, a weekly Planned Work estimate is calculated by dividing the remaining backlog work items by the planned remaining weeks in the project. The weekly planned work estimate is similar to a runner estimating the pace needed to finish at a specified time.

Earned Work (EW)

Earned Work is the number of items completed each period.

For Waterfall, this is the number of work packages completed,
For Scrum, this is the number of features delivered, and
For Kanban, this is the number of items moved to the “done” column.

Establishing clear, unambiguous definitions of completed work (Definition of Done) will instill quality, transparency, and accountability.

Teams using standard project management tools (e.g., Microsoft Project, Jira, Planview, etc.) should be able to easily extract the number of completed items directly from the tools, reducing the overhead required to maintain the reporting.

Work Performance Index (WPI)

The Work Performance Index is the ratio of Earned Work to Planned Work. This is like Earned Value’s Schedule Performance Index (SPI), which measures the ratio of Earned Value to Planned Value. WPI provides a snapshot of the team’s current period performance against the plan. In other words, are they meeting or exceeding their delivery targets for each period?

The Cumulative Work Performance Index (CWPI) is the aggregate project-to-date Work Performance Index (WPI). It provides a comprehensive snapshot of the team’s overall performance and indicates whether it is on track to meet the project’s planned completion date.

Performance indices are valuable metrics that provide a clear and easily understandable measure, enabling the comparison of projects. The data can be interpreted as, for a day’s effort, how much work is delivered?

If the index = 1, then the project is on track,
If the index > 1, then the project is ahead of schedule, and
If the index < 1, then the project is behind schedule.

Work Completed Percentage (WCP)

The Work Completed Percentage (WCP) measures progress toward achieving the project’s goal of delivering measurable work items. WCP is calculated as follows:

Work Completed Percentage (WCP) = Cumulative Earned Work (EW)/Total Planned Work (PW)

The Work Completed Percentage can be presented as a single-point reference or a burn-up chart. As a single point, it describes how much work is completed. The burn-up chart visually depicts progress over time. A planned versus actual line can be added to the burn-up chart, enabling a quick comparison.

The WCP for prior periods will be adjusted as additional work items are added to the project. Consequently, this is a dynamic rather than a static performance measure. A line showing changes to planned work can be added to the chart.

Estimating Completion (ECD)

Approximating the project’s completion date, given its current performance, is a fundamental question. The Critical Path Method facilitates this analysis for traditional projects. Agile teams with predictable velocity can estimate the time required to complete the items in the backlog. These estimates often require substantial analysis.

Like Earned Value Management, Earned Work can estimate the completion date based on the Work Performance Index (WPI). The Estimated Completion Date (ECD) can be calculated as:

Estimated Completion Date (ECD) = Planned Completion Date + (Remaining Duration/CWPI)

Using WPI to estimate the completion date is a straightforward calculation and can be applied across multiple project approaches. However, it relies on important assumptions:

The workload is relatively linear throughout the project’s duration;
The work items are roughly the same size; and
Past team productivity (WPI) is a reasonable predictor of future performance.

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