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The returns are diminishing, but not by much for many people. E.g. a 100 hours work week having 2x the productivity of a 40 hours one (instead of 2.5x).

From my 30+ years of experience in the SW industry, a guy who works 100 hours will far outproduce someone working 37.5 or 40 hours and on top will improve his skills a lot faster.

Quality and scope are different aspects of a result. You can focus your diminishing returns on getting less done at a similar quality level. Meaning the returns may diminish, but your contribution is still a net positive.

Well if you've got to sow your field before the snow comes then it's not real helpful to have the guy next to you telling you that after 8 hours you're producing diminishing returns and should call it quits. That's going to be interesting advice next spring when you don't have a crop.

The diminishing returns only applies to creative work, not physical labor. (Yes there is diminishing returns there too but clearly you're still getting additional useful work done)