8 Ways to Measure and Improve Employee Productivity

8 Ways to Measure and Improve Employee Productivity

Employee productivity can have a big impact on a company's bottom line. Managers can find ways to eliminate redundancies and improve their team's efficiency and overall output when they have systems in place to track employee productivity.


What Exactly Is Productivity?

The ability to work efficiently is referred to as productivity. Productivity is a term used in business and economics to describe the efficient production of goods and services (total output) based on the number of hours, finances, and raw materials (total input) used in the process. Productivity can be expressed as a ratio of output per unit of input, typically over time.

Employee productivity is one critical metric that businesses can use to determine whether their teams are performing optimally. Employee productivity can be measured by focusing on profits (money brought in per employee or team), output (tasks completed per employee), or qualitative assessments. Setting clear benchmarks, collecting productivity metrics, and leveraging project management software to reduce labor costs and increase labor productivity are all part of measuring employee productivity.


Why Should You Track Employee Productivity?

Measuring employee productivity can help managers better understand how their team works and ensure that everyone is meeting their goals and objectives. Monitoring productivity is the first step toward increasing productivity, which can have a positive impact on profits, investment decisions, operational strategy, and team morale.


8 Methods for Measuring and Improving Employee Productivity

Measuring and improving productivity are inextricably linked. Here are some methods for measuring productivity:

1. Evaluate productivity: Using the productivity formula, determine the level of productivity of individual employees or the entire company. Labor Productivity = Total Output / Total Input is the formula. This formula calculates the ratio of an employee's output to the number of hours worked. You can then compare this ratio to the average for your company's employees.

2. Don't micromanage: While measuring productivity is important for a company's growth, employees will be less productive if they feel constantly monitored, tracked, and micromanaged. Allow employees some control over when and how they approach tasks, and make sure they know they can take breaks and ask for help.

3. Use time-tracking software: Time-tracking software allows managers to keep track of how much time each individual employee spends working on a project in real time. While managers must build trust with their employees and give them some autonomy, time tracking can help managers see an employee's overall productivity.

4. Use project management software: Project management software can provide teams with tools to optimize workflows, such as the ability to see tasks at a glance, communicate with coworkers, and submit timesheets. Managers can use project management software to see how many tasks were completed on a given workday or to track how many hours employees spent on specific tasks.

5. Provide productivity-based incentives: Incentive programs increase employee productivity by rewarding employees for their efforts. An incentive can be monetary in nature (for example, a cash prize or additional PTO and vacation days), or it can be as simple as an employee recognition program.

6. Hold regular employee check-ins: Regular group meetings allow team members to stay on the same page and share progress reports with their coworkers. Managers can also schedule one-on-one check-ins to provide a more complete picture of team productivity.

7. Establish clear productivity benchmarks: Before measuring productivity, managers must first establish a baseline for what constitutes a productive work environment. Employees can then be held accountable for meeting benchmark goals. Profit, employee retention, customer satisfaction, and other relevant metrics are examples of key performance indicators (KPIs) that can drive your company's goals. Managers must set clear expectations for the targets and outline how each individual employee can contribute to meeting these objectives.

8. Use the 360-degree feedback method: For 360-degree feedback, gather information about the productivity of team members' coworkers from team members. During this process, each team member reports on how they believe their team members, including those above and below them in the hierarchy, are performing. This creates a cycle of accountability, which can aid in increasing productivity.