Achieving greater efficiency with a smaller staff requires grasping effective ways to understand job functions and outputs. Not all methods of measuring productivity work due to varying differences based on industry and a variety of tasks. Nevertheless, there are consistent approaches on how to measure employee productivity.
This metric is unavoidable to identify who is either failing or excelling in their position. Employers must develop measures that track performance and emerging issues. The sooner employee output that can impact key drivers to business outcomes are identified, the better.
Here are 11 ways for employers to measure the productivity of employees and move towards cost-efficient activities.
Set a baseline
It is necessary to establish a starting place to measure employee productivity. Typically, this entails using operation output numbers for a business normal day to set an average. This total is divided by the number of employees, either for the entire company or separate departments.
A practical example of this a small business repair shop that uses the average number of repair services it performs. That number is divided by the number of workers to determine the baseline.
Identify benchmarks and targets
Benchmarks and targets change based on the industry, while some jobs have built-in benchmarks. Most businesses still choose to establish benchmarks that reflect their business objectives. Doing this also requires changing the target productivity based on how benchmarks are set.
What this means for customer service representatives, for example, is acknowledging their inability to control their workflow. Their productivity is directly affected by their primary task: receiving calls. In this case, employers may need to lower the productivity target.
Define the tasks
Peter Drucker, the management expert best known for coining the term “knowledge economy” more than 50 years ago, also asked if employers could narrow tasks. When more positions seem to center on what information is accessible, rather than what it means to be productive, how realistic is it to measure tasks? The answer depends on the type of position employers need to measure.
Manual work by assemblers, for instance, is easier to measure than the tangible and intangible value of engineers. Processes in manufacturing repeat and are predictable. Knowledge jobs involve more complex tasks with many variables.
Determine appropriate comparisons
Job function determines an employee’s day, which is not always measured by a single activity. Instead, the entirety of an employee’s work should be measured. On any given day, typical job functions represent a mixture of various applications, resources and internet driven data. Add email and social media activity to the mix, and employers soon learn that multiple activities determine how productive an employee can be to complete different tasks.
Additionally, comparing one employee’s daily activities against a peer group helps employers identify top producers and their best practices. This information serves as efficiency standards to make comparisons appropriately.
Pinpoint redundant routines
Comparisons may also highlight redundancies in routines that increases output once eliminated. An example is plumbing technicians who return to the office multiple times throughout their workday for parts. It could be as simple as efficiently stocking work vans or revamping service calls for the day. The objective is to ensure technicians have everything they need for assigned service calls.
Extra trips to the office are not only redundant but also excessive timewasters. It could mean the difference of adding one or three more service calls per day for each technician.
Track individual progress
An established baseline and areas of redundancy help to pave the way for tracking individual progress. Considering this usually determines who is productive and who is not, employers will soon identify underperformers and high achievers. More importantly, this practice highlights patterns among comparable work groups.
Revisiting the plumbing business example, two technicians were able to add an additional service call after return trips for parts were eliminated. Service calls for a third technician, however, did not increase. The employer can address the issue individually to determine why productivity for the third employee remains at the same level.
Request daily updates
Requesting updates from employees introduces them to participate in this essential process. Although employees appreciate the freedom of doing their job without a micromanager, it does not always ensure productivity.
Some people may suffer from procrastination that interferes with productivity levels. However, asking employees for updates at the end of the day can serve as a motivator. When employees know accountability is expected, they are more likely to stay on pace with goals.
Account for the human factor
The human element is always a factor and remains the core problem or solution to productivity. Productivity measurements and incentives are moot if an employee simply does not want to work. Those who do will consistently produce high-quality work with little or no motivation.
With more emphasis on the knowledge economy, the expertise and knowledge that employees bring to the work environment are the means of production. This stresses the importance of viewing employees as assets, which slightly changes the dynamic for measuring their productivity. Installed parts or time on an assembly line are not the only variables measured.
There are some employees whose productivity increases with motivation from their employers. In practice, this looks like:
• A culture where employees feel they are important to the business
• Clear expectations of work-related goals so employees fully understand their role
• Sufficient training employees need to accomplish those goals
• Recognition when employees meet or exceed work-related goals
Solicit employee feedback
Employers should value feedback from employees, which keeps workers engaged with the measurement process. Obtaining employees’ ideas on objectives and performance metrics removes the feeling that they are just faceless numbers on spreadsheets. Businesses large and small benefit greatly when employees believe their voice matters.
Not only could this cause lower productivity rates, but some businesses may experience high turnover rates when employees feel voiceless. Their mood drags out the day and pulls down the entire office. Alternately, giving workers chances to express their thoughts on how their role impact the business’s direction will have an opposite effect. Just a little interest in the opinion of employees can encourage them to share a personal stake in the success of the business.
Take note of extenuating circumstances
Extenuating or unusual circumstances may affect how employers measure the productivity level of their employees. Learning a new job or new system can skew productivity numbers. This should be accounted for in labor productivity reports. Issues during daily operations such as mechanical failures and system problems will also cause those numbers to fall. None of these have a reflection on employees, but are still worth mentioning as a reminder.
The approach of knowing how to measure employee productivity is changing across industries. For some businesses, labor and material have taken a back seat to the use of technology to complete tasks. At the end of the work day, it is more about understanding the key drivers that boost productivity.
Delays, unrealistic expectations and lack of employee engagement all factor into processes that can hinder a productive workforce. Further, use of boilerplate methods or processes is soon overrun by individual business objectives and perspectives. Ultimately, changing expectations of productivity requires overcoming the challenge to prove the value of how each employee’s efforts align with their employer.