How do you build a working environment where people can accomplish more? Employee productivity is a topic drawing increasing attention thanks to our evolving understanding of workplace psychology as well as access to new tools and technology. Here’s how to define, measure and improve productivity in the age of hybrid working.
What is employee productivity?
A person’s productivity is the amount of work they can do in a given amount of time. It’s a simple measurement, but the factors that influence it are varied and complex – everything from the tools people use to how their organization builds an environment that breeds success.
There will always be natural variance between individual’s productivity. That isn’t necessarily a bad thing. After all, the employee who spends a long time on one outstanding piece of work is just as valuable as the person who can create large volumes in a short time. The person who solves problems in a warehouse will set a different pace and have different goals as someone working in an office.
Businesses may measure overall productivity on a company or team level, as well as looking at each employee’s rate of output. Working on a larger scale can help business leaders check that they have the right mix of people in their teams.
How do you measure employee productivity?
According to some, the typical worker is productive for only 3 hours every 8. But how you define productivity depends on the metrics and methods you use.
As we’ve talked about before when discussing productivity management, the classic measure is a simple equation:
- Productivity = output (the volume you create) ÷ input (labor hours and resources)
That’s the baseline. But over time, measuring productivity - especially individual or personal productivity - has become more sophisticated. Some productivity measures go beyond inputs and outputs to assess product quality and the financial costs involved.
Efficiency and effectiveness measurements
You can track productivity in terms of efficiency – how quickly the job gets done.
But what happens if efficiency is high, but the quality is low? Effectiveness measurements of productivity try to address this question by building in quality standards.
For example, in a contact center, an employee’s productivity could be measured by the number of calls completed where the customer has rated the service level at 7/10 or above. This kind of measurement provides more information than efficiency measurement alone, but it depends on quantifying quality – and that’s not always possible.
Some productivity measures look at the financial investment that went into the results, not just the employee’s time. For example, Employee A may have become very effective and efficient due to intensive training from the employer. In contrast, Employee B might have had the same skills when the employer hired them. If we include financial costs in the mix, an organization might rate Employee B’s productivity higher.
As organizations think about recruitment or training in a new world of work, the ability to make measurements like these can take on extra significance. What costs more - training people or hiring the right skills? Is it more cost effective to “buy” productivity or to build it internally?
Subjective and objective measurements
When an output is something tangible, like the number of calls made or customers served, you can measure productivity by counting the result. That’s objective productivity measurement.
But when you measure the productivity of knowledge workers or creatives, defining output in a quantifiable way is more complicated. In these cases, teams can use subjective or self-reporting measurement, usually through an employee questionnaire. While it’s less exact than objective measurement, research shows that self-reported productivity correlates with objective measures.
Benchmarking employee productivity
Productivity measurement is only meaningful if you know what you’re looking for. Benchmarking productivity levels means you know what success looks like and when you’re excelling or falling behind. Setting a productivity benchmark will depend on your industry and the type of work employees are performing. It’s likely you’ll select and reset your productivity benchmarks over time as you learn more about how your own business performs.
Employee productivity reports
A productivity report is a document or dashboard that shows an individual or team’s daily, weekly or even hourly output. It can be done manually, using a chart or spreadsheet system, or using software tools that automate some of the work.
Employee productivity reports help you see the big picture. Over time, you can identify patterns and trends in your team’s productivity – they might get more done in the middle of the week than on Monday mornings, for example. You can also see how different team members’ productivity ebbs and flows and how their output differs from one another.
Organizations can base productivity reports on subjective data - employees writing down hours and tasks on a timesheet - or objective operational data like revenue and volumes.
What affects employee productivity?
No two employees are the same. Some of us are highly productive, while others take longer to complete a task. One of the reasons that productivity levels vary within a team might be down to personality, working style or ability – things you can’t always control. But there are also factors that you can dial up and down to help your people reach their productivity potential.
Are team members healthy and well? Do they have an appropriate work-life balance? Do they feel comfortable and confident at work, and can they access support and adjustments they need for things like illness, disability or parental leave?
How easy is it for people to get in touch with each other? Are the business communication tools and channels that link your team members together easy to use, reliable and high in quality? Research by McKinsey shows that social technologies improve knowledge worker productivity by 20-25%.
How engaged is the team leader? And how does this affect employee engagement? Are they available and approachable, and do they work with individuals’ strengths to help them perform and develop? Organizations that want to set their teams and managers up for success try to help people emotionally invest in what they’re doing and use their talents to the full.
Do employees have the right tools for the job? Are they appropriately trained in how to use those tools? Is their equipment intuitive and high quality, or does it require extra time and effort from the employee to get it to work as it should?
Do employees know how to perform their daily tasks and tackle routine challenges without stopping and asking for help? Do they receive the right level of onboarding when they join the company and ongoing training to keep their skills current?
How do you increase employee productivity?
We've already touched on some of these - things like management style, training, company investment in tools and working environments all play a role in keeping people productive.
But what should you do if members of your team aren’t as productive as you’d expect, despite all the basics being in place? Here are some ideas to help you develop an approach.
- Encourage and praise
Use the carrot, not the stick. Praising employees when they’re productive will make the employee feel good and send a message to the whole team that you recognize hard work and great results.
Try and find ways to provide support and encouragement when someone is working on a challenging task. It will remind them that they have your confidence.
According to a Harvard Business School study, praise motivates employees by providing a reflection of their ‘best self’ and allowing them to recognize the value and importance of their work.
- Give people some downtime
Giving employees time off to make them more productive may sound unintuitive, but it makes sense if that time off gives them a chance to recharge and re-energize. It’s certainly true that we can’t give our best when we’re burnt out. Sometimes it’s the simple things – 66% of US workers say they’d be better employees if they got more sleep, according to a survey by Glassdoor.
- Define what you want
That saying about breaking a big task down into chunks to make it easier? It applies here. Although it may seem obvious to you, the team member may not fully grasp your expectations for their role, and sometimes you need to get specific about the basics.
Make sure the employee understands what you need them to do, when, and how. Make it clear that they can ask questions if they’re unsure about something and get a helpful answer. Working with the employee, set long-term and short-term goals that you want them to meet and make sure they understand the steps they’ll take to achieve them.
- Create (some) competition
We’re human animals, and we like to be part of the group. We also want to compete within that group and be the best. Introducing some friendly competition, along with appropriate rewards, could help motivate an underproductive employee who feels switched off from their job.
However, you'll want to use good judgment here. According to researchers Po Bronson and Ashley Merryman, 50% of employees thrive on workplace competition, 25% wilt in response to it, and 25% are neutral.
Tying rewards and benefits to output is a trusted strategy for many businesses. But on closer inspection, it seems that how you implement your incentive program can make or break its effectiveness.
As far back as the 1990s, Alfie Kohn explained how incentives can influence our short-term behavior, but they can’t provide real motivation in the long-term. It's an analysis he's still exploring over 25 years later. To be effective, incentives need to align to a broader employee engagement program that helps make sure employees are engaged, valued and listened to as well as rewarded.
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