Productivity is a very important factor for any organization. Improve productivity is the key to improve revenue. So there should be some effective system for measuring organizational productivity. For every organization, a common question arises ” how to measure productivity in the workplace”.
For business, productivity growth is important. Because more goods and services to the customer generate more profit. With the increase of productivity resources of the organization Turns into revenue, Painting holder, and retaining the cash flow for future growth and expansion.
There are many external factors that can affect an organization’s productivity, Like the economy, inflation, share market, raw material price, etc. You can’t control that, but what you can control is the internal factors of the organization.
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How to measure productivity in the workplace
1. Management by objectives
Management by objective (MBO) is a strategic method to measure the productivity of the organization by clearly defining the objectives of both the managers and employees. This strategy was formulated by Peter Drucker in the 1950s. In management by objective system manager are comparing the Actual performance of the organization and achievement to the defined objectives.
Employees should know, whatever the short term and long-term goals of the organization. There should be a system to count the number of short terms and long terms goals that have been achieved. It will help to motivate the employees and to create better communication between management and employees.
For management by objective is to successfully make sure that goal must be realistic so that A plus takes pride in their work With the goal that they know they can achieve. It also aligns employees with their own skills, strength, and educational experiences.
Accept the participation of employees in setting their individual goals. This gives employees better motivation because they feel have better empowerment.
Management needs to monitor the progress of the employees and reward their progress. This step includes giving an honest opinion on what was achieved and not achieved for each employee.
2. Track employee attendance to measure productivity
Tracking employee attendance is very important to measure productivity in the workplace. Absent of the employees impacts negatively on the productivity of the workplace. So every company should have an efficient system for measuring the work hour. If employees are suffered from work-related stress, the productivity of the company will suffer for sure.
As much as attendance is important, the mental and physical health of the employees also very important to give you their best output. In order to manage the workload of the employee, measuring attendance is very necessary.
Some of the attendance measuring systems are, employees can manually enter attendance into a spreadsheet, the company can create a wall mount card swipe system where workers have to swipe their unique card while entering the workplace and data will automatically transfer to the computer where attendance will be counted, there are many effective workhour measuring systems are available which can make the process easier.
3. Set productivity comparison chart
Every company should create a daily, weekly, monthly, and yearly production comparison chart to always get aware of which direction the company is going. The direction in the sense productivity is increasing or decreasing compared to previous data. If production is decreasing manager can take the necessary steps to improve the production rate. A comparison chart helps to display that data on a timely basis.
The chart should be mounted in such a place, where every employee can easily see that. It will motivate them to perform efficiently and put in the extra work to reach the predetermined goal. This is an effective way to measure productivity. This data can be recorded either by using the software or by having individual employees fill out timesheets that specify work duties.
Also, the company can compare the performance between employees, it keeps them motivated to work more efficiently than others. Make sure that there will be an annual rewarding system. Rewards can be a promotion in the respective position or give them an extra bonus.
4. Set Benchmarks and Targets
For every company, productivity benchmarks and targets changed according to the nature of work. Generally, benchmarks are set automatically by working experience. Some company has pre-determined benchmarks which are compatible with the goals. However, many companies will have to establish these benchmarks by the worker themselves.
Based on these benchmarks, the company can set productivity targets. That is how many units they have to produce in one day or how much work they need to be done.
For example, some company set a time to assemble a product, workers have to complete the assembly within that time. If they do it for every product unit, we can say they are 100% productive.
Before evaluating the benchmark and target research the data of successful industries of your same domain and of your size. This will help you to create a benchmark that is realistic and achievable.
5. Consider Industrial factors
When you want to measure productivity by labour productivity methods, output changes based on types of industries.
To measure the productivity of sales industries, you have measured the number of units sold, new account opening, the number of calls made, meet the number of clients, the total number of sales completed in a particular time period, the number of new customers gained, etc. Note how much time your employees are spending on non-sale activities like attending meetings, travelling, etc.
It is very complicated to measure productivity in service industries because there are many external factors that can affect service industries. Services companies measure productivity by numbers of tasks completed, numbers of consumers served in a day or in an hour, other companies measured by the speed of service delivery or customer feedback, etc.
In the manufacturing sector, you are manufacturing goods. Here, you want to measure productivity in terms of the number of units produced per working hour. If workers work efficiently, more products will produce within the same working hours. So, high productivity means lowering the cost.
6. Measuring productivity by profit
Measuring productivity in terms of profit grains is becoming the most preferred types of productivity measurement in middle and small type organizations. Profit is a very effective tool for productivity measurement.
Tracking individual employee movement and performance is hard. Instead of that measure, productivity by profit involves watching only the bottom line and analyze that is a lot easier. Only higher-level functions are needed to watch closely. This method saves a great portion of the management time. A great business consultant Roger Bryan of RCBryan & Associates once said, “Watch the money and everything will fall in line.”
7. Measure productivity by the quality of tasks completed
Some company believes that the most accurate way to measure productivity is based on whether the work assigned actually gets done or not. They don’t care about how many hours workers spent in the workplace, completion of tasks with proper quality is the only way to measure productivity in the workplace.
In this method, the project manager breaking down the project into individual tasks and assigned the tasks to the employees according to their skills and expertise. This process continues until the project is completed.
There are some software tools like Producteev, Asana, Atlassian, etc. that help managers to map out the goals of the project, and divided into individual tasks, tracking project, and task completion, etc. After that, they track employees’ progress on each project, find out when the project will complete.
8. Time management method for measure productivity of employees
The time management method determines how employees are using their working time at the workplace. The time management method helps the employee to achieve their goals within a predetermined time and reduction of time losses.
This method includes tracking how much time they are spending for non-work related conversation, using social media, and how much time off they are taking for illness. From analyzing this data, the administration can take necessary action to improve productivity.
There is some software like TimeCorder, iDoneThis, Notworking that can help you with these. This software collects data on how much time employees are spending on social media, counting how many tasks they have completed, send emails for reporting, and giving the next task individually.
9.The 360-degree feedback method
360-degree feedback method uses to measure productivity by generating feedback from fellow employees. In some particular circumstances, this method can be a very effective strategy. Because every employee has their own criteria to judge their fellow employee’s productivity in terms of teamwork, leadership, completing tasks, co-operation, etc.
This method is implementable to measure productivity where teamwork is included. Employees should be well trained in giving correct feedback to ensure the opinion should not be biased or not affected by personal feelings to crowd their judgment. In order to do this successfully, every team member should have proper knowledge about the various functions and roles of the project.
- How to Calculate Productivity at All Levels: Employee, Organization, and Software – https://www.smartsheet.com/blog/how-calculate-productivity-all-levels-organization-employee-and-software#:~:text=You%20can%20measure%20employee%20productivity,by%201%2C500%2C%20which%20equals%2053.
- The Top 8 Methods for Accurately Measuring Employee Productivity – https://www.universalclass.com/articles/business/the-top-8-methods-for-accurately-measuring-employee-productivity.htm
What Is Management by Objectives – https://www.investopedia.com/terms/m/management-by-objectives.asp