Phil, your expectations for the time tracking workflow are quite valid. In most cases increasing the work completed should decrease work remaining with the same amount of time.
Being able to do so (or system to do it automatically for you) is a feature we've considered during the initial development of the time tracking feature, but didn't have time to implement it. Since then it has been requested a few times and we are definitely looking to introduce it in a future release.
In the Teampulse feedback portal you can see what others have requested, vote for this feature and contribute with more ideas that you think will suit your workflow best:
the Telerik team