How to Measure Productivity in the Workplace, Formula, Software
It is well known that productivity is a vital key to a company's success. It is also the key to your own success in the company. But how do you measure productivity. How is your performance and efficiency being quantified and tracked by your company? How can you measure efficiency and productivity in ways that can be monitored by management and in ways employees can see and respond to?
This is the real ‘show and tell’ when targets are on display - performance is tracked, along with data summaries for each group and individual ’s output, performance, efficiency, productivity and contribution.
Tracking output data against targets are important for keeping an organisation running smoothly and for quickly identifying bottlenecks and lags in performance. It is also a vital tool for improving productivity, outputs and performance. This is the best way to get the best bang for your buck.
BUT how can you really measure productivity in meaningful ways as metrics that can be tracked and monitored. This article examines the various ways of measuring and monitoring productivity of your employees, groups and your business.
The same measures can be applied to individuals. It is important to check that you are working as efficiently as possible and delivering maximum productivity for your own satisfactions and also for advancing in the workplace. Changes may be needed in the way your own productivity is measured and monitored.
Time Based Performance Measures
A lot of companies charge per hour. For example many law firms and consultancy companies have systems for tracking how long and employee spends working for a particular client or on a particular job. While this may work for the company there is no incentive for an efficient employee who can do the job satisfactorily to showcase their higher productivity. This gives the employee an incentive to overdo the job, perhaps to over research the background for the job.
Similarly performance and delivery for many jobs is judged by the hours spend at work, or perhaps at home doing the preparation work. Those who work longer hours get rewarded by having time off, using flexi-time systems. The efficiency for the work done is not assessed. A recent research study interviewed about 40 corporate managers and asked them to rate the performance of their employees. Employees who worked only during office hours and who did not do extra work on weekends or late at night were regarded as “reliable” and “dependable”. Employees who worked extra hours after work were seen as “dedicated” or “committed”.
These responses hark back to the industrial age where all workers were on the same assembly line and individual performance did not count. This attitude can be totally counter-productive. If employees have to stay late to get a higher performance rating from their boss, where is the motivation to complete all their work during normal business hours? Many people who are on flexi-time, get to work early or work late when no one else is in the office and spend many hours doing private tasks or having long telephone call with their friends.
Result or Output Based Measures
Productivity, efficiency and output often does not get the reward in the workplace as measures of performance. There is a need to shift from measuring the hours you work to measuring your output as a measured quantity. To be fair it should be measured as your average output per hour worked. Some people may work variable numbers of hours, others may complete their allocated daily production and then go home early as the reward. Average output per hour is a real measure of efficiency and productivity provided the work done satisfies the required standard. This measure can be easily tracked and displayed as a progress score throughout the day of week. Everyone, including the manager and the employees themselves can see how they are going.
Measuring productivity this way helps to identify time-wasting activities. This may include long meetings, extended meal breaks and too much time spent not doing this that get counted towards you output. It also identifies changes in practices that can speed up the delivery of the outputs. Staff can try different procedures and see if it improves the average output per hour.
Some outputs are going to be difficult to quantify in this was but there are a variety of approaches that can help. Tasks can be classified in tem of complexity and time required. Various weightings can be given to each type of task to generate an average output score. Each employee may have their own measures because their jobs are different. It can get complex if each persons does multiple tasks, but there are usually simple ways of devising a suitable rating score.
This approach has a lot of advantages in tern of work-life balance by focusing on results rather than hours. People can vary there starting and end times. People can also ensure that they will be home for dinner every night of the week by keeping track of their output and varying their effort to ensure they meet daily targets.
Each of the individual average outputs per hour for the staff can be combined into a team target and a target or the company. There is no formula that will work for all companies but with some innovation and though various measures can be devised. The important thing is that the individual, team and company targets and measures are very similar and are related to one another.
Collaboration between department supervisors and the workers is essential for developing a company wide metric system. All employees must understand and be involved in developing their output measurement. This flows through to ways of measuring their productivity and ultimately their performance. Everyone at all levels should strive to improve efficiency and productivity. There should be rewards in place and various incentives available to encourage this. Check and balances are needed not to generate stress and unreasonable expectations. The companies plans to increase productivity should also be well known, not only by improving the performance of the staff but through equipment upgrades and software improvements.
Tips for Evaluating Productivity and Making Improvements?
- Every workplace is unique and the metrics need to be developed for each specific situation.
- If you can't measure it, you can’t monitor it, and you can't make changes to improve it.
- Ensure metric is simple, objective (where possible) and easy to evaluate.
- Make sure you can show how any change to the process is evaluated against the measure of efficiency.
- Don’t limit yourself to a single metric, as most jobs are multi-faceted. But don't go overboard with too many, otherwise it will be too complex.
- Get input and feed-back from various levels in the organization, from managers to supervisors to the workers themselves.
- Ensure the individuals and teams can evaluate and track themselves using the measures of productivity. Staff will accept the measures and productivity will improve, especially if there are incentives. People will be on the lookout for bottle-necks and things that can be improved.
- Devise a system for gathering the data, analysing it and displaying the metric on charts that everyone can see, or are available to individual staff if you do not want them made public.
Software for Measuring Productivity
There are a number of special software packages developed for monitoring and improving productivity, but the best are those developed using simple spreadsheets. The simple one are easy to understand, have easy data entry requirements and are easy to modify.