Good grief, reading this question stressed me out. You don't think your employees should be allowed to send personal messages and attend to their life during work hours? The top answer says it better than I will, but that's completely unrealistic. If you expect your employees to be focusing on their tasks 100% of the time, you're going to lose them.

Most businesses are open from 9 to 5, at least in America. It makes no sense, but it's the world we live in for some reason. That means that human beings who need to make appointments and deal with real life stuff are going to need to take care of it during work hours. If you offered flexible hours instead of insisting they come in at 9 (and presumably stay until all other businesses will be closed) then that would sort of be one thing (even then it's harsh), but demanding they stick to these rigid hours and then getting upset when they need to do people things is delusional.

Add on top of that that people have kids and family and situations at home, and you should be realizing that your expectations are insane. If you want to dedicate your entire life to work and sacrifice the meaningful portions such as relationships and health, that's your prerogative. But that's not a decision you should be making for your employees.

If you need to get more work done, you can hire more people. If that's not possible, you need to cut back on your expectations and goals for the project.

I think that strict working hours is generally not a good idea. For example I belong to these 20% of people who are much more productive at late hours. I worked in startups and big companies as well. I always had that talk with my managers about the late hours. After all I always told them, yes I can come to the office at 8am and be completely shut down until 2pm being almost useless... On the other hand, I always was completing my tasks on time and even before - I worked from 11am to 10pm because it was best for me - resulting in my own better productivity.

Also doing a little bit of own stuff (like answering couple of mails or even watching a YT video) is not a bad thing even contrary being a programmer, the job is intense and tedious. A human brain cant really work a full 9 hours straight; it needs little breaks - these breaks are actually much more productive than just sitting and staring at code - in these breaks I usually get the brightest ideas popping into my mind - that leads to good solutions for the problems. So I suppose everything is relative - of course it shouldn't be abused and the employees shouldn't watch YT all day long.

After all the best measurement of productivity is when you see if the employees are making their tasks in the given time (of course if the times are set correctly). I think the best way is to break the task into short time spans and check them once in a while - like once a week or once every 2 weeks or whatever makes more sense for you.

Taking all I said into consideration, if they are not meeting the deadlines consistently and not motivated enough to work on the project - then you have hired the wrong people and your best choice is to replace them with the people who will.

I think apart from the above mentioned views, I guess one has to take the region/country where the company is located. The culture has a major impact on these kind of stuffs too.

For example. I have worked in India, US and Currently in Germany. In India, People tend to come late everyday, I observed them to be less productive on first few hours after entering the office. They frequently use mobile phones and enjoy coffee breaks in Cafeteria. Having said that, they tend to form a strong bond among their colleagues.So, when it comes to work, They tend to finish it somehow to meet the deadlines.

Meanwhile in US, you can't restrict them or pressurize them to do a certain tasks. They feel responsible for the job no matter happens. In short, they don't like people bossing them around.

In Germany, things are completely different. They strictly follow "Work Hard and Party Hard" culture. Inside the office, they won't do anything related to their personal life. Even when having a chat with their colleagues, it will be about the work flow. They are extremely sincere. They care more about the quality than velocity. But I haven't seen them working after their required working hours in a week. No matter what happens they leave the office after the requested period.

Hope this point of view helps for you to analyse your Resources

Having managed several studios for a few of the large game companies, I could write you a large answer about productivity, etc but the problem is rarely there:

First, you can't expect people to sit 8 hours focused, it won't happen.

Flexibility is very important because if people can't deal with calling their bank, etc at the office, you will start to feel it very quickly. Unless there are some important deadlines, and the work is purely related to the time put in (as in no problem solving, no research, etc) you can't measure the work in hours and it's much better for employees to have flexible time, within reason.

In order to get people to be productive, forget time and focus on short measurable goals but also make sure they really understand, and share, the end goal. If they don't care about your project and are just contractors that want to collect their pay, your product will never be good.

People go into games because they're passionate about it, so you already don't have most of the problems you'd have with contractors in general.
But you have to get them interested in your product and involved in building it, not treat them as extensions of your brain that will implement what you tell them.
If there is no team feeling, productivity will be low, no matter the talent.

Another common thing in games is that your schedule is probably wrong; in almost 30 years in this field, only one team I was a part of (making the most popular soccer game) had a schedule that was realistic and made sense. It was an experienced team where people were used to work together. You have to constantly refine the direction with the team to see what can be done with the time / budget you have left, keeping in mind that there are always unknowns, etc popping up.

Almost all the time, productivity issues stem from management mistakes. Make sure the team likes the project, want to see it published, are contributing to it more than just coding and drawing, like it's theirs too, and that the goal makes sense at any moment.

There are some red flags, but probably not the ones you expect

This

I set down a project roadmap with a lot of good documentation on what needs to be done and deadlines.

Both were asked to produce a timeline as to how these deadlines would be met. For the artist, I mentioned that if the workload was too much, it might be possible to hire an additional contractor for a month or two while they need help.

I have already started hearing things like, "well, I might need some extra help with this," and "I'm not exactly sure how long it will take me right now, so these timelines are just very rough estimates." And I get it, they're trying not to set themselves up for failure, but as a manager, I also need to know what the heck is going on.

...sounds more like waterfall and less like Agile than you're probably aiming for. The point of Agile is to manage risk better by planning less up front, when you know far less about scope, schedule, and budget, and instead focus on continually adding value to the product and planning only as much as you need to at any given time. This lets you 1) always have a product that you can demo and maybe even sell; 2) always know the pace your team is working at; and 3) what you can reasonably accomplish in a given amount of time. As a result you can better respond to schedule hiccups and changing customer needs, both of which are important for a startup.

It sounds like your employees are doing Agile and you're unintentionally trying to force them back into waterfall. I'd recommend spending some more time learning about Agile, particularly with a focus on startups where I understand the risks are high and you want to avoid costly mistakes.

But if I were going to create a software startup I would 100% choose Agile over waterfall, because it would enable me to be more agile instead of blindly going over the waterfall because my employees didn't set expectations with me and instead kept taking on more work while promising to meet a deadline that had been set in stone months ago and that was not achievable. You don't want that.

Bottom line: other than possibly the lateness issue, your employees are doing exactly what they should. You need to take a look at your management style; it seems to be the issue.

A few things you need to know about creative types:

Programmers love being 100% engaged for hours at a time. This allows them to achieve deep flow. To gain the benefits of this, you need to provide a work environment absolutely free of distractions. Separate offices or remote is ideal. Cubicles are marginal. Open workspaces obliterate productivity. Something as simple as asking someone what time they're going to lunch can destroy half an hour of work.

Whether a developer is in deep flow or not, code quality drops off precipitously after about five hours of hard thinking. And sometimes that thinking may not look like work. I do some of my best programming with my eyes closed on the couch.

Read up on Scrum and other Agile methodologies. Set reasonable tasks and deadlines (which is a skill in itself that you'll need to hone as a team) and then let your developers decide how to meet those goals. Other than your daily standup, you don't need to synchronize your schedules at all. In fact, it's probably better if you don't.

Adding to other answers, it's worth noting that on top of the average office worker, most creative work like art and programming certainly does not benefit from monitoring over the shoulder and counting down the minutes.

However, this doesn't mean you cannot track or expect a deadline for goals.

If your workers legitimately do not know when a task will be completed from your plan, their task is actually too big - or you've presented it as too big. Break the tasks down to things your workers can deliver frequently and effectively build up to your MVP. Think SMART goals and involve them in the process. Have a brief stand up meeting everyday to figure what's being tackled today, how work is going, or what's impeding their progress.

To say it again, do not set up overwatch on them with work hours. Gather with each team and discuss reasonable scope and deadlines. Do not micromanage, specially over creatives.

I think you were taking the problem on the reverse way (but hopefully the previous answers changed your mind).

Here is my way to lead creative people, and the way I like to be lead :

• I make sure they feel engaged toward the project. It must be their baby, not mine. I'm very strict with the briefing and then give full freedom within the defined frame. I feel very bad when I have to say someone "I know you don't want to do this that way but you have to" each time it happend and the job is done I consider I have a big debt regarding the worker. If there is a technical choice to make, the ones more impacted by it have to make it. Also split the tasks so they can aim at the end of it (agile methods).




• get focused very hard during small amount of time, then relax. Check pomodoro method, it force you to train to quit working even if you felt very productive at that time. Feel weird, but once you use it repeatedly you'll see it work. There are tons of similar methods. Make sure your employees experiment them, I'm so glad when I see my colleagues debating about these methods.




• Make sure they have top environment: descent computer, keyboard, mouse, monitor, desk, chairs, network, good water, even fruits... It cost nothing compare to salaries.




• Make sure they have a place to take a nap. Sometime after a bad night I could take a one hour nap, it saves me the rest of the day instead of fighting fatigue like a zombie in front of computer. Consider your developers are working while sleeping and exercising. They just come to work to type the code they though about while cooking the day before. If they sleep or have sport break during the day, you'll get two days of work for the price of one. The same apply at smaller scale with pomodoro methods. So make sure they have some quick stupid things to do. Ideally I would have a climbing wall in the office. So you can climb 5min get focused 25min... Also I would pay the one hour sport break.




• experiment things that seems to be a waste of time. Like peer programing for exemple, I can't remember how many keyboard shortcuts or software feature I learnt this way and how grateful I'm to the ones who taught me them. It also create bonds between people. Also at one company I was working with, employees made presentation to others once a week during lunch time. It was not mandatory for employees to do it but considered as a present to others. The company paid pizzas... Quite cheap for a one hour and half lesson to 20 persons.




• care for them, check the signs of fatigue, worries, bad health state. Talk with them, encourage exercising... It's like leading a sport team. Care for them, they'll care for you.




• Make sure there is no shame of not being working at a time, so they never fake it. They send messages on slack because it's a less obvious break than doing push-ups...

But how can you be sure they are working if it all look like an holiday place? You'll feel it. Make sure there's some pressure, some deadline and challenge and that they care. It's really easy to make happy people productive.

In addition to the existing answers that cover A. “employees are humans and need to be able to also live their lives”
And
B. “Setting up long term waterfall based work loads and deadlines, but meeting daily about them, doesn’t count as agile”

I’ll add some additional information I think will help you succeed. There is, sadly, just statistically, but also from my takeaway of your situation and view points, nearly a 100% chance you will never ship a game.

The setup you have going, plus how game development works, plus this being your first shot at running it all where you are the last line and the bottom line, means failure is imminent.

The only chance you have to ship a product, of any sort, is to constantly adapt. The grand vision of a game you have right now, whatever it is, will sink you. Plan on shipping a tenth of that vision at best. Hold on to one key feature or essence, and let everything else be flexible or “cut-able”.

If you were an artist or an engineer yourself, then you could drive slightly more of the vision home via your own sweat equity. As it is now, every sprint, look at what you have and then make a decision about where to try to take things in the next 2 weeks. Forget about the grand plan. Figure out what pieces there are for a minimal viable product and try to dedicate sprints to achieving a single piece.

Agile development is especially difficult to manage at the very beginning of a software project. Many producer/designers end up turning it into waterfall development without realizing it...but with a lot more meetings.

To me, it kinda sounds like you hired the wrong people. I only work with people who I know will be just as motivated as I am. Doing personal stuff in between is no biggie (as long as it's not too long of course!), but showing up late seems to me like a lack of discipline / they don't take their job too seriously.

Look, I don't know you, I don't know them, I don't know the company, but it feels like you should go over this with them. It doesn't need to be in a stern manner, but rather ask how they perceive such issues and help them get motivated for the end-goal, your release.

Oh, and as an artist I totally understand their "I don't wanna do marketing stuff" mindset, because it may not be what they learned to do in school. For tasks like those you may rather hire a specialist, especially since you're a starting studio. Without marketing you'll die a swift and unnoticed death.

Hope this helps, succes with figuring it out!