A company’s success depends on employee productivity, which, by the way, isn’t necessarily about working their fingers to the bone. Productivity is simply the measure of time or effort that’s spent to get things done.
When employees have high productivity, operations become more efficient, sales targets become more achievable, and the business becomes more profitable as a result. Statistics attribute about 2.3% more revenue for a three-year period for companies with employees who are highly engaged and productive.
Unfortunately, many businesses have misconceptions about how to enforce employee productivity. This could be because they don’t utilize modern HR strategies that take modern technologies and shifts in employee behaviour into account.
According to a 2013 survey done by Microsoft, 37% of workers with their company would allow the use of social media-based tools that bring about increased productivity at work. This means a large portion of businesses are ignoring technological adoption and restricting communication channels in the workplace. In the end, this has a negative effect on overall productivity.
HR’s Role in Workplace Productivity
The HR department should always be the main driver of productivity in the workplace. You could have an entire fleet of machinery, material, and money to keep production running, but, in general, you can’t make much progress without effective human resources at its core.
Since productivity involves cultivating positive attitudes and work ethics, HR should lay the groundwork for employee performance by modeling certain values such as credibility, integrity, efficiency, and leadership.
It’s also HR’s responsibility to keep employees motivated and engaged by helping build comfortable working conditions, a fun company culture, and healthy relationships between colleagues.
On the technical side, HR also needs to understand the operational goals of the organization and determine which skill sets and personality traits fit best.
By having this level of understanding, HR can provide the training that employees need to help them work smarter, make wiser decisions, and develop professionally.
How to Measure Employee Productivity
Before you can determine what works and what doesn’t, you need to be able to effectively measure your employees’ productivity before and after making changes in HR efforts.
Once you’ve determined their productivity levels, you’ll be able to identify which employees are performing well and offer a rewards scheme to keep them motivated.
On the other hand, knowing which employees are performing poorly can allow businesses to create support systems that help them become better workers.
Having a performance tracking system in place not only helps employees identify areas where they need to improve, but also encourages them to respond more positively to feedback.
When there’s an open line of communication between management and your employees, you’re allowing them to bring to the table their own observations, problems, concerns, and recommendations, which could really help when it comes to developing better HR practices in the future.
When weighing the input-output ratio that’s tied to workers’ productivity, you need to look at several factors that determine whether employees are contributing to the business’s profitability. These factors might include the cost of overtime, turnover rates per year, and overall job satisfaction.
That said, it’s important to choose the right methods for measuring employee productivity accurately. Here are some examples of proven strategies:
1. Management by Objective
In this method, you should be able to evaluate whether an employee’s actions are helping achieve company goals and targets.
If you have a service-oriented business, for example, and your goal is to maintain customer satisfaction, you could implement and analyze customer satisfaction surveys to find out how an employee is performing.
The resulting data can then be benchmarked against the rest of your organization to determine your best and worst performers.
2. Quantitative Method
This is one of the most simplistic productivity measurement models.
Here, you’re monitoring productivity based on the quantity of an employee’s output, which can be quite easy to measure.
You simply keep track of the number of tasks, items, parts, or products that an employee completes within a specific period and average those numbers to find out how much productivity is gained or lost within a particular time frame.
3. Benchmarks and Targets
In some industries, it’s possible to assess an employee’s productivity based on service levels, which identify the amount of time it ideally takes to complete a transaction.
Some banks are picking up this idea and running with it by guaranteeing that customers in the queue will be served within a certain amount of time. The baseline may increase depending on the number, nature, or difficulty of the tasks or transactions involved.
If tellers don’t manage to meet the allocated time window, they won’t be reaching their targets, making them under-productive.
4. Sales Productivity
This method can be a bit tricky since you need to consider several criteria to measure a salesperson’s productivity, with each criterion producing varied results depending on the operation.
In sales, some of the most important numbers you need to look at including the total number of sales attempted, the total amount of sales closed, the number of new accounts or customers gained, the number of phone calls made or emails sent, and the like.
It’s a good idea to focus on sales conversions as a primary metric. After all, it’s the only metric directly affecting your revenue.
Performance benchmarks, again, would have to be set according to the size and nature of the business as well as historical performance.
5. Unit of Service (UOS)
This is quite similar to the benchmarks method, although you’re more likely to find the UOS model helpful if you belong to an industry with assembly line-style operations.
Kitchen helpers in fast food, for example, might have the number of burgers prepared and packaged as their UOS.
Another common example would be factory workers in manufacturing plants, where their UOS would be a certain number of parts produced.
Many small- to mid-sized businesses are finding this method effective because you only have to keep track of how much money the company makes for every dollar spent on your workers’ salaries.
For example, rather than considering how many sales a salesperson makes, profit-based productivity measurement assesses the value of each sale, prioritizing high-value conversions over other activities.
7. Time Management Method
Part of employee productivity involves the efficient use of time to accomplish tasks. Any activity that deviates from this standard can be included in the measure of an employee’s deteriorating efficiency at work.
Some of the time management issues you may want to explore are frequent absences, recurring bouts of illness, excessive breaks, or unnecessary disruptions at the workplace.
8. Quality of Completed Tasks
Team leaders and managers are always focused on the quality output and completion of tasks. That’s why you’ll tend to see top-performing employees getting the most critical tasks assigned to them.
Quality is also what drives business as well as customer loyalty and advocacy from customers who have high expectations about the particular product or service they’re buying from you.
Infographic: 10 Ways HR Managers Can Boost Workplace Productivity
Despite the abundance of literature on workplace and employee productivity, it’s quite easy to fall into the trap of committing a few mistakes here and there.
One of the most common misconceptions about productivity is that the busier you get, the more productive you are.
This has given rise to most people trying to be effective at multitasking, when in fact, not everyone is wired to perform this way.
Moving forward, employees and organizations should realize that the true value of productivity is in collaborating with one another, where everyone understands where they stand and how they can contribute to the company’s goals and get things done at the close of business.
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Harry is Head of Customer Success here at edays, helping organisations to get the very best out of their edays system. His experience in SaaS and HR brings valuable insight into how organisations can better manage their people, processes and productivity.