• HR performance management

5 useful tips for productivity measurement in the workplace

Johanna Dumas

Employee engagement is more than a feeling. If workers aren't actively interested and engaged, their productivity levels will suffer. Why is this so important for SMEs?

Employee engagement is more than a feeling. If workers aren't actively interested and engaged, their productivity levels will suffer. 

 Consider this: In Q1 2020, productivity fell by 0.6% compared with a year ago (Q1 2019). Compared with the previous quarter, productivity fell by 1.3%. Also, only 8% of British employees feel enthusiastic about their workplace.

Keep in mind that this was before the coronavirus outbreak, which also presents significant challenges in productivity measurement. This means underlying productivity trends will be difficult to discern for some time.

As an employer, how do you measure productivity levels? And are there any tools available to give you insight and help you with productivity measurement?

Read on to learn the answers these important questions.

What is productivity?

"Improve productivity" is a term that gets thrown around a lot these days, but what does it really mean?

Put simply, productivity is the measure of production against efficiency. It's how much your employees are actually accomplishing based on the time and effort they're spending on the task.

With so many distractions in the workplace, productivity can be a challenge. One study found that British employees only spend an average of 3 hours "working" during an 8-hour workday. The rest of the time was spent on distracting activities like social media, reading news sites, or checking email.

How do you measure productivity?

The labour productivity formula is a good starting point.

In basic terms, it measures real economic output per hour of labour. The total output/total input = labour productivity.

Here's how you can use this formula:

  1. Choose the output to measure (i.e., units made, tasks completed).
  2. Find your input figure (hours of labour spent in production).
  3. Divide output by input.
  4. Assign a monetary value to the result to measure the cost-benefit ratio.

In general, this formula is used to calculate the productivity of the company as a whole. To find out how much time your employees are working (or how much they're wasting), you need to measure the output of each individual employee.


Best practices to measure employee productivity

Higher productivity leads to better customer service and, ultimately, a larger number of customers. Here are 5 expert tips on how to measure employee performance and boost productivity levels.

1. Define and measure tasks

Your role begins with setting clear, achievable expectations for every role. This involves laying down some baseline metrics for productivity management.

Depending on the nature of your business, productivity metrics might include:

  • how many sales calls to make
  • how quickly customers should be served
  • how many invoices to send out
  • how many orders to dispatch

Rather than focusing on a set amount of time, measure productivity by well-defined tasks. Be completely transparent in your expectations and communicate those goals clearly to your staff.

2. Set clear objectives and goals

How can you expect higher productivity from your employees if they don't know exactly what's expected of them?

Carefully consider how their performance is affecting your customers and your bottom line. Are you reaching your business goals and targets, or are you falling short?

Break up big goals into small, achievable steps. Use performance reviews to evaluate each individual's progress and productivity levels. Survey your customers and read reviews to find out where your employees excel and where they need to improve.


3. Monitor work quality

If your employees are completing their assigned tasks on time, that's a good indication of their productivity level. 

Still, meeting deadlines isn't the only metric you should use to assess their performance. What's the standard of their completed work? Are they doing the bare minimum, or are they going above and beyond and producing excellent work?

Regular assessments of work quality allow you to identify weak points in your employees' performance. This will help you determine if more or better training is necessary.

4. Watch out for trends

Two common trends that affect overall productivity are presenteeism and absenteeism. While they're located at opposite ends of the spectrum, each can have a devastating effect on employee productivity.

If an employee comes into work while sick, their performance might be negatively impacted. Not only is this detrimental to productivity, but it also puts other employees’ health at risk. 

On the other hand, employees that take excessive time off due to sickness might indicate high stress levels (or other productivity pitfalls). Keeping track of excessive absences will help you spot these trends and address them before productivity levels suffer. 


5. Use time tracking and project management software

As a business owner, you need to devote more time to growing your business (and less time to tracking your employees). Online time tracking and project management software like kiwiHR helps you track productivity at a glance.

By defining projects and tracking the time spent on each, employees record how their working time is spent. This gives you a complete overview of what exactly your team is working on. With HR reports, you'll get an even clearer view of which projects your team is spending the most time on.

If your team is working remotely or abroad, then online time tracking and project management software is a great solution. It allows you to track employees' working hours and performance wherever they are in the world.

Final thoughts on productivity measurement

Improving productivity starts with getting the right data. When it comes to productivity measurement for SMEs, kiwiHR is the logical choice.

Our HR software for small business will help you keep track of working hours and how they are being spent. You'll also find out if absences or excessive overtime impact performance. The software even turns time tracking data into actionable insights.

kiwiHR helps you manage any leave type with automatic holiday accrual calculation, accurate time off records and allowance. Moreover, you can define different types of leave to manage absences and assign them to employees.

Does this sound like the HR software solution you need? Click here to learn more about how kiwiHR will transform the way you run your business.

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