How to Measure and Improve Employee Productivity in the Workplace?

There are times when you know some things are true.
For instance, if you appreciate your workforce's efforts, respect their work-life balance, and believe in them, they are more likely to give their best every day.

It is common sense, right?

But in business, we are not using our gut for decision-making. We want metrics on our side. Fortunately, there is a wealth of research exploring the current state of employee productivity and what can make workforces more efficient. Or what detracts from productivity.

Studies have found a direct correlation between creating a great employee experience and improved productivity. 

The very nature of work is changing. The most successful companies understand the importance of learning what motivates and inspires employees – then applying those lessons in the workplace.

Do you want to know more?


TABLE OF CONTENTS

  • Defining Employee Productivity
  • Employee Productivity in History
  • Best Methods To Measure Employee Productivity
  • Factors Influencing Employee Productivity
  • Tips to Boost Employee Productivity
  • Final Thoughts

#1. Defining Employee Productivity: Input vs. Output

Employee productivity is the amount of work (or output) produced by an employee in a specific period. As a manager, it is vital to understand how long it takes your teammates to complete tasks and if there are any roadblocks or distractions along the way that you could help them overcome. 

James Clear (author of Atomic Habits) defines productivity as a measurement of the efficiency of a person completing a task.

We often conceptualize work linearly: the more hours one puts in, the more productive they are.

It is intuitive to believe that work functions this way. Historically speaking, work and productivity have been approached from this linear perspective.

Today, we can appreciate a more refined and layered definition of productivity by observing how the concept has evolved over several decades.


#2. Employee Productivity in History

Let's step into a time machine and travel back to a rougher and unforgiving industrial time when labor was abundant and cheap.

During this era, the goal was to maximize productivity at all costs.

Productivity was measured primarily by input; in short, the number of hours present at work. It was common to find industrial workers working 80-100 hour weeks.

Also, industry owners assumed the more laborers worked, the more they would produce. However, this notion misses a crucial point: Humans are not machines. They get tired - mentally and physically. They can succumb to injuries or stress, among other factors that slow workers down.

Then along came Henry Ford.

In 1926, Henry Ford popularized the 40-hour workweek after discovering that working excessive hours yielded an insignificant increase in productivity and only for a short period. Thank you, Mr. Ford.

The current reality is much more complex. 

We now have labor norms and laws to protect workers from exposure to such extreme working conditions.

However, even within the 40-hour workweek, many companies still approach productivity from a linear perspective, focusing on input as an indicator of productivity.

Ask yourself this: Having an employee working overtime translate into productive work? They may do their job, but is that their best work? Probably not. Simply put, more input (hours worked) does not always yield higher output.

To illustrate this in action, look at an experiment conducted by Microsoft Japan. In August 2019, the company carried out a Working Reform Project called the Work-Life Choice Challenge Summer 2019. For one month, they gave their 2,300 employees every Friday off.

And the results were incredible:

  • First off, the reductions
    • employees took 25.4 percent fewer days during the month, 
    • printed 58.7 percent fewer pages, and 
    • used 23.1 less electricity in the office. All of these saved the company quite a bit of money.
  • Now, the increases
    • productivity went up by 39.9 percent, and 
    • even though the employees were at work for less time, more work was getting done. At the end of the trial, 
    • 92.1 percent of employees said they liked the short work week. Yes, you read that correctly: 92.1 percent!

Microsoft Japan discovered an idea similar to Henry Ford over 100-years ago: working more hours does not automatically mean an increase in productivity.


#3. How To Measure Employee Productivity

Most managers have a gut feeling about how much work their employees can do. Some are faster but more superficial. Others are slower but more thorough. Still, others manage to achieve the pinnacle of employee productivity: Fast, good quality work.

To effectively manage employee productivity, you need to balance two things: 

  • Quantitative Factors
  • Qualitative Factors.

You cannot have one without the other. 

One of the most famous and widely-used ways of measuring the success of an organization, a team, or an employee is using the employee productivity formula. The idea is to compare the input to the output. The formula is:

output unit / input unit = productivity

A traditional productivity model has limits and does not give us a granular understanding of the total output of one work. 

In short, productivity means creating value efficiently.

Here are a few of the best methods for measuring employee productivity:

1. Use an employee productivity calculator

The employee productivity calculator will help you measure work productivity based on the number of employees and hours dedicated to work. The productivity formula works wonders. However, it does not consider the time your employees spend on administrative work, personal development, or any similar tasks that do not contribute to the company revenue.

2. Quantitative method

This method works because it is simple and time-saving: measuring productivity by the number of products an employee makes during a particular period. However, when using this method, you should also include uncontrollable factors, such as time spent waiting for broken equipment to be fixed, job training, or waiting for materials to arrive.

3. Task tracking

Many entrepreneurs believe that leaders should calculate employee productivity by measuring the number of tasks they complete rather than counting the hours spent at the office.

4. Objectives method

The objectives method evaluates productivity based on how well your employees can meet their objectives. If you want to make this method work, you first need to set clear and individual goals for your employees and provide all the information and tools they need to complete those goals.

To ensure accuracy, managers must regularly note the actions of the employees.

You should also regularly meet with your employees to discuss their progress and solve problems. When you measure productivity throughout the year, the employees stay focused. The annual review shows the progress towards goals and how many goals employees achieve. 

5. Profit is productivity

In business, profit is everything. So, it makes sense to measure productivity based on profit. Many small to midsize companies evaluate their productivity against the profit gained. 

6. Weekly jour fixe

Many employers organize jour fixes so that everyone can give an update on what they are doing. 

For some, this strategy works wonders and helps them feel validated for their work. For others, it can be overbearing. If done incorrectly, it can create a feeling of micromanagement.


#4. Factors Influencing Employee Productivity

A coffee with a colleague here. A few emails there. Just 10 (or 30) minutes of surfing your favorite websites. These workplace distractions are familiar to all of us. But when you add up the time you spend distracted, you realize just how much they cut into your productivity.

I am not saying that it is inherently wrong to do things to distract you. According to a study by Award-Winning Psychology Researcher Dr. John Bargh, before we embark on big projects, our brains attempt to simulate real, productive work by focusing on small, mindless tasks to pass the time. Taking calculated breaks throughout the day helps you work smarter overall.

Hubspot analyzed more than 2,000 professionals and found interesting statistics regarding barriers to productivity in the workplace:

  • 61% think loud colleagues are the highest office distraction
  • 89% prefer to work alone to hit maximum productivity
  • 40% consider impromptu meetings from coworkers stopping by their workspace a distraction.

Categorizing the obstacles to productivity is crucial because it allows you to quickly identify which category needs the most attention in your organization. Moreover, some are more manageable to treat than others. 

Further unpacking these obstacles to productivity, we can reduce them into two main categories: external and internal. Think of these not as separate categories but as two ends of a continuum.


A. External and internal obstacles to productivity


External barriers to productivity

The average workday is filled with hundreds of external micro distractions. These are often tangible (or audible) as noises, visual distractions, digital notifications, loud colleagues, etc.

But external barriers to productivity do not stop there. 

Other external barriers that are slightly less tangible exist, such as multitasking, faulty tools, murky goals, and being overworked. These barriers result from poor organizational practices and expectation management.

The bad news is that these barriers fuel procrastination and wreak havoc. They affect employees' ability to get to work, focus, and concentrate.  

The good news is that these barriers to productivity are the most tangible and obvious. Therefore they are easier to treat and minimize with proper intervention and control.

B. Internal barriers to productivity

To understand internal barriers to productivity, it helps to think about the following scenario. 

Diligent and motivated employees feel their hard work is unrecognized in the day-to-day. Managers are stressed and overworked, and the organization overlooks regular open and honest communication. As a result, busy managers only make time for recognition during formal evaluations a few times a year. 

This employee wishes for a genuine “thank you” or “good job” at the end of a long week. The weeks go by, and this employee continues to put in the same effort, but a lack of recognition continues. As the basic need for appreciation goes unmet, a slow decline towards detachment begins. Absenteeism usually follows. Eventually, disengagement occurs. Productivity ultimately suffers.

Internal barriers to productivity, such as lack of communication and a need for autonomy and praise, pose a significant challenge as they are mostly invisible and, as a result, more difficult to identify, measure, and treat.

Regarding the factors affecting productivity, the team at Hubspot split the two barriers into :

  • factors can control such workflows and processes, team motivation, company culture, or work environment and 
  • factor can't control like the Covid Epidemy, or some new laws preventing you to do your business.


#5. How to Improve Employee Productivity?

Managers expect employees to be productive since, well, it is what justifies their wages. However, a report by Atlassian suggests that people are spending only about half the workday on legitimately productive work!

So, what can you do to boost productivity?

1. Improve your employees work-life balance

A famous psychological theory explains the fascinating interplay between stress and performance. The Yerkes-Dodson Law asserts that achieving top performance is dependent on the level of pressure we experience for the work we are doing. When we are under too much pressure, performance declines, sometimes severely.

In our tech-driven world, many people take their jobs home in their pockets. It is increasingly easy to check your email or chat from home. Workers may feel compelled to respond to work emails and messages off-hours, as other colleagues do.

As a result, the wall between work and home slowly begins to dissolve, chronic anxiety and stress quickly follow, and burnout becomes a very likely outcome.

2. Plan better

According to the Journal of Applied Psychology, time management techniques can dramatically improve employee engagement and productivity.

The study explains that planning your workday does wonders for daily motivation and performance in dynamic work environments. However, time management skills are inefficient when employees suffer from frequent interruptions, which lead to employee disengagement and underperformance.

PS: Leave planner solutions helps schedule and track PTO and help with reporting too. Moreover, each employee will be able to book WFH, PTO, and Sick from their smartphones and when they book time off, their managers get instantly a new email to approve the request. And when it comes to productivity, by cutting repetitive tasks and investing in automated HR process-based systems you and your employees gain more time and are more satisfied.

3. Quit multitasking

Studies have shown that multitasking acts as a downer because employees can't feel any sense of progress, which is fundamental to employee satisfaction. 

The mind is not designed to pay attention to two things at once. Although it's possible, the quality of your attention is not the same; as a result, the quality of your work will suffer. The key to maximum productivity, focus your attention on one task at a time. And watch the quality of your work soar.

4. Minimize distractions

Writer Tim Urban explains in "Why Procrastinators Procrastinate" that people who suffer from chronic procrastination have an "instant gratification monkey" living in their minds.

Everybody has an instant gratification monkey, even the most disciplined people. When it comes to productivity, the instant gratification monkey does not want to put in any effort. So, one of the best ways to quiet down and tame the instant gratification monkey is by removing and minimizing environmental distractions.

5. Turn intimidating goals into small milestones

People who avoid procrastination are not masters born with dispensable amounts of self-control. They are simply better at breaking down a sizable intimidating task into smaller, more manageable goals.

Managers can help employees with efficiency by ensuring that goals are realistic, actionable, and always organized in order of priority.

Goals that are broken down into more deliverable and manageable mini-tasks clear up the path to success. When employees feel supported and reassured, stress and pressure slowly subside, and the desire to indulge in procrastinating activities simultaneously diminishes.

6. Take a well-deserved break

Masters of self-control and productivity are not tireless machines. Their success depends on the fact that they know how and when to reward themselves. They take breaks. And make the most of them by being fully immersed in their relaxation time.

These breaks can be short or long. Short breaks might be a cup of coffee with a colleague, or a walk during lunchtime, while longer breaks can be a relaxing beach vacation or a stress-free trip in the countryside. Vacation tracking systems such as LeaveBoard can help in this way.

The lesson for managers: Ensure well-deserved breaks and rewards are in sight. Don't delay rewards or relegate praising employees to formal evaluations a few times a year. Do it often. Celebrating successes (big and small) should always be a top priority for managers.

"The Practical Magic Of Thank You" Deloitte study found that for their day-to-day work, employees appreciate a verbal and straightforward 'thank you' the most. We have a set of thank you letters that you can simply copy-paste when you need to send appreciation to your colleagues.


How does low productivity affect the business?

Poor productivity can harm profitability. There can be many reasons for this, like team friction or low morale, however, find below the top signs you have workforce productivity issues:

  • Missed deadlines
  • Poor quality of work including excessive errors
  • Toxic workplace behavior
  • You complain too much
  • No clear objectives
  • Overbudgeting
  • Employees are stressed
  • High absenteeism
  • Lack of engagement
  • High stress.


Final thoughts

In today’s busy world, we have become a people obsessed with “work hacks” and supposedly hidden secrets to being more productive.

Getting more done in less time helps us get ahead and even gives us more availability to do the things we love outside of work - whether that is making time for a personal hobby or pursuing a small business idea. The problem we run into is that it is easy to get motivated but hard to stay disciplined.

Most of us look at productivity incorrectly: task management tools are shiny at first and then go unused. Being chained to your desk is as unhealthy as it is unproductive. Achievement isn’t about doing everything; it is about doing the right things. Productivity is about saying no.

Focus and consistency are the bread-and-butter of being genuinely productive.

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