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For the past few weeks, we’ve discussed productivity in the workplace—from factors that contribute to productivity to the strategies used by major companies today.
In this post, we want to dive into the math and principles behind workplace productivity. By the end, you should understand the various ways productivity is measured, and how you can calculate it yourself.


Measuring & calculating productivity

By now, you should know how to define productivity as it relates to your business. We covered this in our workplace productivity guide. If feeling a little lost, use this guide for an introduction to the topic.

You’re probably ready to implement some radical strategies that will boost your output & efficiency. But before you do, you have to facilitate the planning and coordination of your strategy.
First and foremost, you should know how to monitor performance, and be able to diagnose problems that arise with certain coworkers. You should also be able to calculate productivity by group and individual. For companies striving towards innovation, a firm understanding of productivity is key.


Popular ways to calculate productivity

Because productivity appears in many forms, there is no one ideal way to calculate or even measure it. For leaders, this presents a remarkable opportunity to assess productivity at different stages and from various angles.

The 360-Degree Feedback model is one such example. This method involves requesting feedback from an employee’s peers, colleagues, supervisors, and even the employee themselves. While each person may offer a subjective interpretation of an employee’s performance, 360-Degree Feedback creates a comprehensive view of one employee’s interactions.

360-Degree Feedback is useful for measuring and understanding a person’s social, interpersonal, and leadership skills. In some cases, a more practical approach to productivity is necessary. For example, if the employee in question is a salesperson, measuring productivity using total sales might be more appropriate. Using the productivity equation, you would take their total sales completed within a designated time period and divide it by their total labor hours worked within that same time.

Modern project management apps such as Mavenlink and Basecamp, also offer online performance tracking tools, such as hours spent on a particular project. These tools can save precious time by measuring and calculating automatically, even offering unique views for contributions per project, or contributions over time.

Consider carefully which method to use. Some employers may go as far as monitoring social media accounts of employees. They assume that more time spent on social media (especially during work hours) amounts to more distractions and inefficiencies; This may be seen as an invasion of privacy or personal space, even if those accounts are public. If you do plan on monitoring your employee’s social activity, make sure they know beforehand.


Understanding productivity by industry

The concept of productivity differs depending on the industry in question. Although one company may report a high labor productivity figure, it’s essential to keep in mind that a similar-sized company in a different space could report higher figures; this is why understanding industry-specific factors, such as technology, legislation, talent pool, and market trends, is so important in setting targets.

Let’s explore precisely how productivity can differ between industries. We’ll also cover what benchmarking is as it relates to productivity.


Productivity indices

Productivity is measured as an index or the measure of output to input. Before diving into calculating your company’s index, start by understanding the differences in how each index is calculated.

Take, for example, the industry productivity rates of the mining sector compared to the utilities sector: In 2018, the mining industry reported a 161.9 labor productivity index. In the same year, the utilities industry reported a 96.94 labor productivity index. A company’s productivity index is not as useful on its own, only when compared to its industry average can it be deemed positive or negative.

It’s also important to consider productivity indices that do not rely on labor hours. For example, machine productivity can help measure the efficiency of machines that take a raw input and convert it into a useful product. A sewing machine’s productivity, for instance, can be calculated by taking the number of total garments produced divided by the number of stitching machines used. Software productivity is estimated differently: it is the ratio of the functional value of the software to the labor and expense of producing the software. This is a crucial distinction to replace output with value—productivity is about utility.


Measuring employee productivity

To calculate workplace productivity, you first need to know how to measure it. To start, create a benchmark for each goal or metric. Define what you want to measure which could be sales produced over time, new customers attained, or revenue generated. The benchmark should indicate what each employee can accomplish at their peak performance.

Next, set objectives and SMART goals to empower employees. SMART is a handy acronym to remember in setting goals. It stands for: Specific, Measurable, Achievable, Relevant, and Time-bound. These values are crucial in developing goals that create forward progress.

Be careful not to lose touch of the end-user experience in your pursuit of productivity. As a company becomes increasingly efficient in measuring productivity, they may begin to cut corners in quality control. General Motors was implicated in one of the largest personal-injury lawsuits when their 1979 Chevrolet Malibu was found to have fuel tank design flaws. The company was shown evidence that the car was unsafe but refused to change it due to cost. As a result, they were ordered to pay $4.9 billion in settlements after six people were severely burned from rear-end collisions. Remember to focus on the quality of work as much as the quantity.


Improving employee/individual productivity

The importance of employee productivity lies in the value the employee generates for the company. Productive, engaged employees tend to make more units, use time more efficiently, and create a more positive customer experience.

To maintain or improve employee productivity, start with opportunities for growth. Inspect any insufficient processes, from C-level executive decisions, to supply chain management, to customer-facing interactions. There may be bottlenecks that prevent your employees from achieving optimal efficiency. In a tech-based firm, bottlenecks may include slow computers and outdated servers. Even two years after Microsoft ended support for its Windows XP operating software, almost 12% of all Windows-based computers continued to use the OS, equivalent to 181 million PCs; This presented significant technological limitations for companies worldwide.

After inspecting processes, observe the team. Most importantly, managers and leaders should find worker disengagement within the team before it becomes a larger issue. Major signs of disengagement (besides decreased productivity) include social withdrawal, attendance problems, and even issues with management. Keep an eye out for troublesome, negative employees—they may drag the entire team down.


Productivity reporting

Reporting is just as essential to improving workplace productivity as measurement and calculation. Without useful and accurate data insights, leaders would not know what action to take next, and workers may not feel as compelled to be productive.

Luckily, modern software has taken the pain and hassle out of reporting. These days, enterprise-level tools are becoming increasingly affordable and easy to use. Many feature dashboards show different KPIs in simple yet intuitive visualizations, such as revenue, engagement, sales, and more.

Below are a few of the most popular productivity reporting tools available today: – Simple and elegant, is designed to make collaboration fun for everyone. You can display the progress of a project from a granular or big-picture perspective with multiple view options.
Grammarly Business – Serving over 10,000 teams, Grammarly helps writers improve their vocabulary, tone, and style.
Trello – For companies that work best using the Kanban system, nothing beats Trello. Not only does it present your whole pipeline in a simple interface, but it also has over 100 integrations as well.

Productivity remains the top priority for so many businesses, and yet so few understand the variance and complexity that can arise from measuring, calculating, and reporting productivity. Those with patience and tenacity are rewarded with a greater understanding of how to improve and advance the business as a whole.

You do not need productivity experts or consultants, fancy productivity training classes, or a harsh and unforgiving culture. It starts by merely understanding how productivity works, how to measure it, and how to calculate it.

For more tips and guides to becoming a more productive version of yourself in 2020, remember to follow Novel Coworking’s blog today.