Is the 'Get your 40' expectation an actual written rule or or unwritten expectation?

Was he originally hired to work a 40 hour week? If so then why would you try to renegotiate his contract to get him to fulfill the terms of the original deal?

how do the people complaining know this is going on, is he not available when they need him or do they just keep tabs on when people amble in and out of the office? If it’s the first one, maybe you need a ticketing system for queuing up support requests to buffer him from these guys?

How is the assumption he is not present 40 hours supported, how are the working times captured? Lots of companies have flexible time, so is it a problem to be flexible (come later but also stay longer)? Only assumptions are no argument. Offer money to fullfil the normal work time? If you do this everyone else will lose time too, to get a raise. Who gets this kind of ideas?

If you are prepared to offer him more money to work 40 hours, I don’t see why you can’t accept him working 37.5 for his current salary. In any case, you can for sure be firm on this, but this will most likely, from his perspective, trample on his autonomy (which is likely more valuable to him than money) and make him likely to look for a job elsewhere. Are you prepared to lose him over this?

@joe would you change the rules FOR him? Do you want to give the impression to every single other employee that 1) he is that essential and 2) if you are important enough then you can break the rules to change it? You will soon deal with more and more "essential" employees breaking this or another rule (because well...everyone loves to sleep in the morning)

"in general he has a hard time waking up in the morning" - in general that's a solvable problem, if the employee is sufficiently self-motivated to try to solve it.

@Dukeling As someone suffering from sleeping problems, I can tell you that it is not always solvable, or at least not easily. Motivation is not really a deciding factor. That is of course assuming the person involved has a real sleeping problem.

Offering a tardy employee a raise to motivate them to come to work on time is called "a pribe". The other employees deserve to know these kinds of back-room deals are going on. I suspect many of them would quit. Is this how you raised to management level?

Is there a reason the employee can't come in later and leave later? It seems like it shouldn't matter whether he works 8-5 or 8:30-5:30 or 9-6 or even later, particularly if he's doing good work as you say. Does he leave on the dot of 5 no matter what time he arrives?

Are those complaining hourly paid and the web developer salaried ?

This is what happens when people with no technical experience try to manage technical people. Going forward I'd say your best action is to listen to your obviously talented employee and stop making him miserable at work (unless you want him to leave).

@Adriano I would change the rules for the role, not the individual. A company-wide policy doesn’t seem sensible or productive here.

@joe I strongly agree with that but, in this case, not now. Not after he he blatantly ignored the rules and justified himself instead of apologizing. It's all about the message you communicate, as a manager, to everyone else.

@solarflare no, this is what happens when someone (the employee) is not professional. If the rules (fixed entry time and worked hours) are in-place he cannot decide to ignore them both, without asking (and if he was in bona fide he had to arrive late and leave late). When confronted he found excuses and shifted the blame. This is someone you don't want to employ (or to work with). This isn't a post about the rules but about an employee that doesn't know how to be a PART OF A TEAM.

@AdrianoRepetti if a company has truck drivers that work 12 hours a day 6 days a week should the developer do the same? Surely you realise the sales people don't have as intellectually demanding a job as a developer and as such some flexibility can be afforded, right? The manager seems hell bent on getting this guy in early when the guy has said he has a problem with it (no mention of staying late as a solution for some strange reason). He seems unreasonable and so do you.

@solarflare "... if a company has truck drivers that work 12 hours a day...sales people don't have as intellectually demanding a job as a developer..." sounds elitist, unfair and plain rude. I'd love to see you reword your sentence focusing on developers without comparing our merit to any other valuable profession. That said let me repeat that it's not about the policy (I agree that we may have flexible time) but how this specific employee dealt with an existing rule. If he disagreed (and he actually cares) then he had to discuss this matter before accepting the offer (or, at least, ask)

@AdrianoRepetti The guy is getting the work done, so how is he unprofessional? Flexible working is often a key benefit to tech people and what he is doing isnt unusual and is widely accepted in most jobs.

@ayrtonclark It's unprofessional (IMHO) because he signed a contract without flextime. He then decided to have flextime for himself and he didn't even consult his manager to ask if it's OK. He did put his manager in an embarrassing situation in front of the other employees (if it was agreed then manager might simply answer "it's part of his benefits/contract"). When confronted he replied with a funny excuse ("I can't get up in the morning") and shifted the blame (poor specs). All of these (and some more minor things) make me think the this employee is acting in an unprofessional way.