How do I allocate a resource (lets call him Joe) who has different availabilities based on the day. Example he has a daily meeting 1 hour each day and a project review meeting that is 3 hours every Thursday. Based on an 8 hour day he has 7/8 or 87% Monday thru Friday except on Thursday where he has 5/8 or 62% availability?
Is there value in tracking hours by the day? Try using a week; determine utilization availability for the week and let it spread evenly across the days. Whatever tiny variances you accrue should wash out when you look your actuals by the week.
EDIT: You are indicating in the example that Joe has some variability in availability by day. 87% M-F, 62% Th is the same as 83% a week. Instead of trying to load a daily utilization rate that changes, average it out by the week...or even the month. The math will still work when trying to calculate duration.
You could set up a custom calendar for Joe which has a working day of 7 hours on each day apart from Thursdays, and 5 hours on Thursday. Then you apply that custom calendar to Joe but not to the other resources in the team.
In MS Project, you can select which calendar is to apply to each member of the team, and it would be normal to set the default to match the working pattern for the majority of people. I would advise against trying to create too many custom calendars, however, as it can become a major headache to manage these.
However, I suggest you consider carefully whether you really can be so accurate in your estimate that a 3 hour meeting will truly impact on the time taken to achieve a task that is scheduled for 80 hours. In my experience, this is unlikely. On top of that, it would be normal to plan on the basis of around 80% availability in any case, as no-one will work 100%of the time.
One possible approach could be that you set aside a fixed amount of time and call it Non-Project work.
First, monitor the time sheet to see how much time the person spends on a weekly basis. If it turns out that he spends around 30% of his time on average then you can consider that Joe is available for 70% of the work throughout.
Second, set the availability of that resources only to 70% (or whatever you feel is right) in your plans. It is possible that the time spent can be more or less but the effort should average out over a period of time.