Project Management Professional (PMP)® Articles - Five Ways to Best Measure Productivity at Your Office

Five Ways to Best Measure Productivity at Your Office

Today, it is almost impossible to read an article about the workplace without hearing the word "productivity." It has become a buzzword for those who want to improve outcomes and employee morale. However, one can plan to incorporate this concept in their office without receiving its benefits. The only way emerging trends like productivity, work-life balance, innovation, and efficiency truly work is if we can measure their effectiveness.

The phrase, "you can only improve what you can measure," has been attributed to many entrepreneurs and business leaders. Nevertheless, it is true. You can only develop strategies to enhance productivity if you know where you are starting. This scenario produces a new question, how do you measure productivity? Productivity is made up of a variety of different indicators.

Here are a few stats that reveal some productivity indicators:

  • Organizations with higher employee engagement see 17 percent greater productivity.
  • Employees who exercise their strengths daily are eight percent more productive, and six times more likely to be engaged.
  • Organizations with a strong onboarding process improve productivity by 70 percent.

These statistics are indicating that productivity is less about output, dollars, and cents, and more about the company itself. Ultimately, productivity is about the people you hire and how you motivate them. As a result, it is crucial to measure things like engagement, individual employee performance, and metrics related to employee hiring. So, to begin to effectively see the outcomes at your company, here are the five best ways to measure productivity at your office.

Employee Satisfaction

Again, productivity is intertwined with employee engagement. One of the ways to determine if employees are engaged is to track their satisfaction. An excellent method for measuring employee satisfaction is through things like pulse surveys and or one-on-one discussions. Both can yield useful quantitative and qualitative data. For pulse surveys, you can ask about factors related to their satisfaction and invite employees to use a Likert scale. On the other hand, you can receive real-time feedback from employees about their work environment, interactions with managers, and workload with a sit-down conversation.

Another practical way to measure employee satisfaction is the Net Promoter Score (NPS). This metric allows employees to rank how likely they are to recommend this company to someone interested in working there. The higher the score, the higher the engagement, which should also lead to higher productivity.

Goal Attainment

Whenever productivity is part of the conversation, goals have to be a priority. From the moment, an employee begins working at your company, you should be working with them to develop short-term and long-term goals that align with your company's overarching objectives. For example, let's say that you have hired a digital marketing specialist. The overarching goal that you have is to increase sales by 10 percent in the next six months.

An individual goal for them to attain would be to increase page visits to an e-commerce site that ultimately lead to sales. Their conversion rate is what you are after. This example is one that shows how individual performance can impact an overarching company goal. Ultimately, you need to determine if the efforts of your staff, allow you to meet your company goals within a specified period. If not, then it is time to reevaluate the efforts of your team or adjust the goals.

Industry Benchmarks

Much of the productivity metrics process is about the individual. Nevertheless, it is crucial to understand how your team works together as a whole. You need to find out if your company is productive. One of the best ways to measure this is to know how your company compares to the industry. When it comes to output and outcomes, how is your competition fairing? Look at the industry averages regarding market share, sales, production, and even customer satisfaction and experience. Is your team meeting or exceeding these numbers? If not, why? Your goal is to see how you stack up and develop ways to improve or maintain your standing.

Every company is indeed unique (even if you have similar competitors). You may have specific limitations that do not apply to them and vice versa. However, to genuinely know if you are on the right path, you need an idea of how the industry is fairing as well as how you compare. You may be knocking each measure out of the park, or you may excel at some over others. Ultimately, the purpose is to find where your strengths and weaknesses are in regard to your industry and develop the necessary strategies to stack up.

Employee Turnover and Retention

This one may seem unrelated to productivity as explicit output versus input numbers are not measured. Nevertheless, this metric can unveil the reasons why you are meeting—or not achieving—your goals. The official calculation for employee turnover is employees who have left your company divided by the average number of employees. This number is then multiplied by 100 to give you a percentage. Some will take the starting and end amounts of employees from quarterly or even monthly periods. Obviously, the lower the number, the better for your company.

While it is common for employees to leave a company for a variety of reasons, too many turnovers can negatively impact productivity. Each time an employee leaves, you have to:

  • Handle the loss of information and knowledge.
  • Take time away from business dealings to manage the hiring process.Those with access can easily find what they need, regardless of whether they are in or out of the office.
  • Divide the work amongst current employees until a replacement is found.
  • Divide the work amongst current employees until a replacement is found.

The loss of an employee is a disruption to your business and is an automatic loss of productivity. So, if turnover is high, your productivity numbers are taking a hit in the short and long-term. As a result, employee turnover is an excellent way to measure productivity and ensure that your team has a higher chance of being productive. As time goes on, you should also be measuring retention within one to three months of onboarding, and even after one to two years. Both will give you an indication as to whether your employees are engaged and satisfied enough to stay.

Profit Vs. Salary Measurement

While you want to have employees who are satisfied and engaged, you also want them to help you bring in a profit. Ultimately, those "soft metrics" should lead to increases in the standard productivity measurements like profit. The profit versus salary metric reveals the gross gain the company earns for every dollar spent on salaries. This measurement and indicator of productivity enable you not only to see if your company is profitable but also if the money you are spending on wages is a factor in profitability.

It is an excellent way to measure the effectiveness of salary increases like raises and bonuses while also not punishing employees for the time needed to innovate or develop creative ideas. Some may prefer this metric then utilizing time (which comes with a variety of limitations).

You Can Efficiently Measure Productivity at Your Office

Measuring productivity doesn't have to be a complicated process. You can keep a consistent pulse on your company. The mistake that many business owners make is that they think productivity is merely about outputs and outcomes. Outputs are a part of the equation; however, they should not be the only metric.

Understanding the best way to measure productivity is knowing that it is more profound than production. It is about employees and the teams that they are a part of. Are your workers motivated? Are they satisfied with the work environment? How high is employee turnover? Is investing more money in their salaries leading to higher profit? These are all questions the metrics above can help you answer. Your goal is to remember that productivity isn't just some broad term for getting work done. It is all about efficiency, motivation, and ensuring your employees are producing high-quality work with high levels of satisfaction.

How are you currently handling productivity? Do you measure any indicators? Are your metrics telling you all you need to know? If not, think about incorporating some of the measurements above. They can give you insight into factors that are helping to improve—or diminish—your productivity efforts.

Take the time to find what works for your company as each business structure, profit model, and business strategy is unique. If you do this and take measuring productivity seriously, you will be able to seamlessly track your company's performance and create the plans necessary to enhance it.


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