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Productivity Measurement at Your Company: The Complete Guide

Learn how focusing on inputs in addition to outputs leads to more effective and actionable workforce productivity measurement. 

Productivity Measurement refers to the practice of measuring the results of inputs to outputs. For years productivity measurement has been based almost exclusively on total output — the new products or services a company and its employees create. On the surface, using total output as a productivity index makes sense. After all, outputs are easy to measure and they seem, at first glance, to be a perfectly reasonable way of measuring employee productivity and productivity change over time. Unfortunately, relying solely on outputs rarely, if ever, gives you a complete picture of labor productivity. In the modern enterprise, productivity measurement needs to look beyond outputs and seriously consider the input factors — specifically the employees, workflows, and technologies — that lead to those outputs.

In this chapter of the Productivity Management Playbook, you’ll learn why it’s so important to measure total inputs and why the old ways of measuring productivity are no longer a good fit for the modern enterprise. Plus, we’ll teach you how best to measure overall productivity and explain how you can use those productivity measurements to create positive change on both ends of the input/output spectrum.

By the end of this chapter, you’ll understand why it’s so important that we redefine productivity measurement and you’ll see how redefining it within your own organization can have a major positive impact.

Choose where to start:

A Quick Review of Productivity Measurement Outputs and Inputs

When you hear the words “productivity tracking” or “monitoring” you might be a little wary. That’s understandable! According to a 2017 Crowd Research Survey, a whopping 94% of organizations use some sort of employee monitoring software, but they sacrifice employee trust in the process. Only 10% of employees would trust their employer more and not less if they knew their software was being used to track their activity.

No one wants to feel like they’re being watched and judged based on how they spend their work time, whether it’s in the office or working from home. The thing is, there are actually a huge number of benefits to effective, transparent productivity monitoring that keeps employees in the loop with their managers. That’s why it’s so important that the dialogue around productivity monitoring — and the way managers approach that monitoring itself — focuses on it as a collaborative effort that is designed to empower employees, not micromanage them.

Over the years, ActivTrak has done just that, evolving from an employee monitoring tool into a powerful productivity monitoring solution that promotes transparency and trust between employers and employees. We believe that employee productivity monitoring isn’t about surveilling team members, tracking time, or springing impromptu check-ins on your employees during their idle time. Instead, it’s about using digital user activity in context to find out how work gets done, how teams interact, how employees can improve, and how results can be optimized.

Stats callout - 92% of employees are open to employee productivity monitoring

You’ll notice the language we use here — it includes a lot of “how’s.” With empowerment-based productivity monitoring, there are no more accusatory questions like “What are you doing on company time?” or “Why hasn’t more work been done?” Instead, our motto is “Insight, not oversight.” We want to give managers the tools and contextual data they need to help their employees make the most of their workday, not give them new ways to spy. This shift in perspective is key to creating an effective and ethical way to monitor employee productivity. This shift is also key to boosting employee buy-in and fostering a more open, data-driven workforce overall. According to an Accenture survey, 92% of employees are open to the idea of collecting data on their work activity as long as it’s used to boost their own well-being and performance. Here’s how to bring employee productivity monitoring software into your enterprise without spooking your team or compromising ethics.

The Do’s and Don'ts of Effective, Ethical Productivity Measurement

Before we can start redefining productivity measurement, let’s circle back around to the definition of outputs and inputs again. Outputs are tangible productivity metrics we can see. They are unique to each enterprise or small business but are generally defined either as the product or service that is provided to the market or the team’s function to the larger organization. Outputs can be anything from the total number of articles published this month, to how many sales leads were generated, to how many new products were put on the market.

Inputs are intangible and harder to see. They are the behaviors and processes that directly affect your outputs. For example, if your sales team is unfocused or misaligned on strategy (inputs), that could explain why sales leads might be low this month (outputs). Unlike outputs, inputs are fairly consistent across all service industries and businesses. The three key inputs at the core of every organization are people, processes, and technology (but more on that later).

Why Old Productivity Measurements Are Out of Place in the Modern Enterprise

At ActivTrak, we’ve noticed that many managers don’t measure input factors effectively because outputs are much easier to see and assess. We’ve also noticed that many managers aren’t measuring productivity as efficiently as they could be. The key is to find an easy, straightforward, and data-driven way to focus on inputs in your workforce productivity measurement. After all, the quality of your outputs is heavily dependent on the quality of your inputs.

The thing is, finding a way to measure those input-based productivity metrics is a lot easier said than done. Historical measures of productivity enablers like self-reporting, surveys, or deadline completion are a poor match for the needs of the modern enterprise. Why?

Accuracy Issues: These measures of productivity depend on a lot of subjective factors. 45% of HR professionals don’t think performance reviews and self-reporting are accurate representations of an individual employee’s work, and they have a good reason for thinking this. On an anonymous skills survey for a large vehicle manufacturer, for example, 76% of the engineers rated themselves above average. Since only 50% of any group can be above average, the only thing the survey correctly measured was that 26% of employees had a perception of their performance and productivity that was out of alignment with their actual output.

Also, these measures are heavily manager-dependent and generally based on hunches, meaning that they aren’t a good objective measurement of productivity.

Finally, surveys and quarterly one-on-one meetings between managers and employees do not track productivity in real-time.  Productivity levels naturally ebb and flow, and by the time you sit down with an individual employee to discuss their productivity blockers, it might be too late to take action and foster productivity growth.

Access Issues: Even if these measures of productivity provided an accurate picture of inputs, they would still present issues when it comes to access. Historical measures of productivity are difficult to capture at scale and are affected by too many variables to yield clear and reliable insights.

How to Get An Accurate Measurement of Productivity

To adequately measure productivity enablers, you have to shift your focus to progressive indicators. That starts with asking key questions about your three main inputs that will help you define your expectations for each of them:

  • People:
    • Is my workforce engaged?
    • Are strain and fatigue being alleviated whenever possible?
    • Are my employees focused for an extended period of time?
    • Are my employees spending an adequate amount of time on the right activities? Are they capable and trained?
  • Process:
    • Are my processes streamlined and efficient?
    • Is there space in the production process to innovate and improve upon certain workflows?
    • Where do process bottlenecks exist? What’s causing them?
  • Technology:
    • Is technology enabling organizational collaboration within my enterprise while also supporting automation?
    • Is technology being adopted, and adopted mindfully, across my enterprise?
    • Are my employees adequately trained on the enterprise’s technology? Do they have the right know-how?

Once you have answers to these questions, you can start measuring these progressive indicators. What does that look like? Let’s break it down by productivity enabler indicator type.

  • People: When it comes to your employees, you want to measure focus, alignment, effort, capacity, and collaboration. Specific productivity metrics to consider include focus scores, burnout risk, and break frequency.
  • Process: For process, you want to focus on automation, efficiency, innovation, and execution. Key productivity metrics to track include bottleneck points, automation opportunities, and granular completion times.
  • Technology: With technology, you want to measure value, security, adoption, usage, licensing, and training. Productivity metrics to focus on include tool usage, training to adoption ratio, and use-case realization.

Cracking the Productivity Formula with the Best Technology

Assess the impact of your efforts on productivity levels, all while avoiding the many issues that come with using the old methods of productivity measurement.

We know that adopting a new methodology can be challenging, so here are a few tips to help you get started:

1. Establish a productivity level baseline or set benchmarks so you can see where you are and start strategizing how you can get to where you want to be with concrete goals in mind.


2. Measure inputs as well as outputs. Inputs will help you identify areas for improvement and accurately assess how your actions have impacted employee productivity.


3. Focus on data that is accurately and frequently measured instead of relying solely on self-reporting and manager feedback.


4. Lean on technology to access that data and get the best results!

How do you turn productivity measurements into productivity gains? Find out in the final chapter of our Productivity Management Playbook.

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