Employee Productivity

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Introduction

Employee productivity is the amount of work an employee can accomplish within a certain period of time. This relationship is neatly summed up by the productivity formula, which you can use to calculate employee productivity:

Productivity = output (what is created) / input (hours spent and resources used)

The most obvious benefit of high employee productivity is that more work is being done within your business. That might mean more products are being manufactured, more services delivered, more customers helped, and so on.

Another important benefit is the efficiency of your business. If productivity is high, it means your systems and processes are likely to be set up well, and that your employees have everything they need to maximise their potential.

Achieving high workforce productivity is something employees can feel proud of, and it can relate positively to employee engagement, since employees feel highly motivated to maintain their team’s productivity, and feel ownership over their high standards of performance.

Measure employee productivity by comparing the amount of work done to the time spent working. For example, if you have to draft a report that typically takes 3 hours and you complete it in 2 hours, your productivity is better than expected. If you were to increase productivity, you might finish the job in an hour.

Need plenty of data

As you can see from the example above, measuring employee productivity only makes sense when there are multiple instances of work being done. You need to be so that you can establish what is typical and what is high productivity or low productivity relative to that norm. That could mean one employee performing similar tasks again and again – think of a runner trying to beat their personal best – or a team of employees engaged in the same kind of work.

Need to compare like with like

Measuring productivity also requires that the work done is more or less like-for-like. For example, you may have two employees working on writing reports, but one might take longer than the other because there is more data to include and more analysis to be done. If everyone is doing the same job and their tasks are very routine, for example taking customer enquiries within the service industry, you can get a measure of employee productivity by counting how many tasks are done per day or per hour.

Need to consider more than just output

Other types of productivity data can tell us about quality as well as quantity, taking into account efficiency, output, and effectiveness. Efficient employees use fewer resources to accomplish more work Effective employees are able to meet their objectives using the resources you give them and/or their own initiative Employees with great output produce high-quality work, either efficiently or effectively.

The four types of productivity

Labor productivity

Labor productivity is one of four types of productivity that have traditionally been used to measure productivity in business.

Material productivity

Alongside labor productivity is material productivity, which measures the level of output against the amount of raw materials consumed.

Capital productivity

Then there is capital productivity – which you can use to measure productivity by how much output is delivered per unit of capital expenditure.

Total productivity

Summing up all three of the above is total productivity, which can measure productivity by taking all of them into account.

Conclusion

Identifying goals and setting a timeframe for achieving them is a powerful way to increase employee productivity. You can do this as part of an employee performance management or development program, with regular and structured check-ins between employees and their managers. This approach gives employees a sense of clarity about what is expected and what they have already achieved, and can also encourage employees to visualise their future in the company.