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What HR metrics are used to measure employee productivity?

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Employee productivity is a key indicator of how well your organization is performing and achieving its goals. But how can you measure it effectively and objectively? In this article, we will explore some of the most common and useful HR metrics that can help you assess and improve employee productivity in your HR operations.

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Suhaib Al-Anati

DHRM in Cambridge | Project Manager | HR Development | Headhunter's | Executive Search | Consulting | Outsourcing
Hajara Sani

Talent Specialist |Onboarding |Employee Engagement | People and Culture Business Partner | Organization Development and…
Lisa B.

Rewards Consultant (Manager) @ Deloitte | ACA | CIPD Student

1 Revenue per employee

One of the simplest and most widely used HR metrics for measuring employee productivity is revenue per employee. This metric shows how much revenue your organization generates for each full-time equivalent (FTE) employee. To calculate it, you simply divide your total revenue by your total number of FTE employees. A higher revenue per employee indicates a more productive and efficient workforce. However, this metric does not account for factors such as industry, market, costs, or profitability, so it should be used with caution and in comparison with other metrics.

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Suhaib Al-Anati

DHRM in Cambridge | Project Manager | HR Development | Headhunter's | Executive Search | Consulting | Outsourcing
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Key HR metrics for measuring employee productivity include revenue per employee, output per hour, or project completion rates, providing insights into individual and team performance, enabling organizations to assess efficiency and make data-driven decisions for improvement. Utilize metrics such as employee engagement scores and performance reviews to gauge overall productivity, ensuring a comprehensive evaluation of both quantitative and qualitative factors influencing workforce effectiveness.

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2 Absenteeism rate

Another HR metric that can affect employee productivity is absenteeism rate. This metric measures how often your employees are absent from work due to illness, injury, personal reasons, or other causes. A high absenteeism rate can indicate low employee engagement, poor health and wellness, or unsatisfactory working conditions. To calculate it, you divide the number of days lost due to absence by the total number of available working days. A lower absenteeism rate suggests a more productive and committed workforce. However, this metric does not distinguish between justified and unjustified absences, so it should be complemented with other measures of employee satisfaction and performance.

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3 Employee turnover rate

Employee turnover rate is another HR metric that can have a significant impact on employee productivity. This metric measures how many employees leave your organization voluntarily or involuntarily within a given period. A high employee turnover rate can indicate low employee retention, loyalty, or satisfaction, as well as high recruitment and training costs. To calculate it, you divide the number of employees who left by the average number of employees during the period. A lower employee turnover rate implies a more productive and stable workforce. However, this metric does not reflect the quality or performance of the employees who left or stayed, so it should be analyzed with other indicators of employee fit and potential.

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4 Employee engagement score

Employee engagement score is a more qualitative and subjective HR metric that can also influence employee productivity. This metric measures how emotionally and mentally invested your employees are in their work and their organization. A high employee engagement score can indicate high employee motivation, satisfaction, and commitment, as well as positive organizational culture and values. To measure it, you can use surveys, interviews, feedback, or other methods to collect data on various aspects of employee engagement, such as alignment, recognition, empowerment, growth, and well-being. A higher employee engagement score suggests a more productive and happy workforce. However, this metric can vary depending on the method, frequency, and context of data collection, so it should be interpreted with care and consistency.

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Hajara Sani

Talent Specialist |Onboarding |Employee Engagement | People and Culture Business Partner | Organization Development and Change Management.
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These scores assess factors like job satisfaction, motivation, and loyalty. High engagement often correlates with increased productivity, lower turnover, and a positive work culture. Regularly measuring and understanding these scores is crucial for businesses aiming to enhance employee satisfaction and overall organizational success.

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5 Output quality index

Output quality index is a more specific and objective HR metric that can directly measure employee productivity. This metric measures how well your employees perform their tasks and deliver their outputs according to predefined standards and expectations. A high output quality index can indicate high employee skill, competence, and efficiency, as well as low error and rework rates. To measure it, you can use various indicators of output quality, such as accuracy, completeness, timeliness, compliance, or customer satisfaction. A higher output quality index indicates a more productive and reliable workforce. However, this metric can vary depending on the nature, complexity, and scope of the tasks and outputs, so it should be customized and calibrated for each role and function.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Lisa B.

Rewards Consultant (Manager) @ Deloitte | ACA | CIPD Student
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Although HR metrics are useful and can sometimes help spot any potential problems/concerns to analyse further or be more proactive in remediating. I think it is also best to not dehumanise the process of measuring employee productivity. Furthermore although metrics are useful we also need to consider that metrics never give the full picture. For example a utilisation metric, may evaluate the amount of client work an employee is involved in. If the metric is low, this does not necessarily mean the are not utilised as they may be doing business development projects for future potential work which is an investment in the future pipeline of an organisation - but this would not be captured in the rigidity of the metric methodology.

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What HR metrics are used to measure employee productivity?

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6

1 Revenue per employee

2 Absenteeism rate

3 Employee turnover rate

4 Employee engagement score

5 Output quality index

6 Here’s what else to consider

HR Operations

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What HR metrics are used to measure employee productivity?

1

2

3

4

5

6

1 Revenue per employee

2 Absenteeism rate

3 Employee turnover rate

4 Employee engagement score

5 Output quality index

6 Here’s what else to consider

HR Operations

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