No matter what type of products or services your company offers, it is important to have methods to accurately evaluate employee productivity .

Ensuring productivity in the workplace can be a challenge, as many employees are not truly connected to what their workday actually entails. 

Distracted by smartphones, social media, personal emails, and the demands of their personal lives, most employees find it difficult to focus consistently and truly do their best work.

This lack of interest and participation often leads to low productivity. Monitoring employee productivity is a clear way to understand how trained, engaged and productive they really are.

Let’s learn about some methods that will help you correctly measure the work and make the necessary adjustments to improve its performance.

Importance of evaluating employee productivity

For an employee to be productive, they must know and, above all, understand clearly and unequivocally the boss’s expectations about their work and performance. The performance appraisal establishes the basis of expectations and promotes a productive exchange between the manager and the employee, which will subsequently lead to the achievement of objectives. By evaluating the productivity of your employees you can improve their weak points, discuss the difficulties encountered, but above all, focus on the strengths that are recognized and valued as an employer in order to recognize your workforce.

What are the productivity expectations?

Taking accurate measures of productivity can mean more than simply counting the number of products manufactured or sold, or where appropriate, services provided.

A toy factory worker can produce 100 toys per day. But if most of those toys are defective and cannot be sold, that means that in reality the productivity level of that employee is not very high, and both work time and materials are obviously wasted.

When you measure your employees’ productivity and discuss this topic with them, you let them know that you expect them to care about their work, do it to the best of their ability, and work toward individual goals that are aligned with company goals.

Having methods to evaluate productivity, in addition to revealing how individual employees are performing, can also reveal where workflow stops due to equipment failure, inefficient processes, poor job training, or lack of communication, among other problems.

When used correctly , accurate productivity metrics can also reveal how well your business is progressing toward company objectives and goals.

Methods to evaluate employee productivity

Before you can choose the most accurate employee productivity assessment methods, identify your key performance indicators ( KPIs ). Keep in mind that these are your drivers: the parts of your organization that generate profits and reputation.

Your KPIs should arise directly from the most important objectives of your company and should relate only to those aspects over which you have some type of control.

Most employees perform several tasks, some of which, of course, are easier to measure than others. When determining how profitable an employee’s actions are, keep in mind to include factors that affect those benefits, such as the cost of overtime, annual turnover rates, and overall job satisfaction.

Be open to different approaches and willing to try different methods at different times to see which ones reveal the most accurate data and what is most important in terms of your business goals.

Method 1: Management by objectives

To use the management by objectives method you must measure productivity in a way that reveals how well an employee’s production is contributing to the company’s goals and objectives.

For this to work properly, employees must first be given clear, individual productivity goals to work toward, as well as all the tools and information they need to achieve those goals.

If your goal is to increase customer retention by 25% over the next year, you’ll need to decide what type of training and incentives you’ll use to ensure employees are ready to help you achieve that goal.

Customer retention productivity will require you to provide high-quality service. To ensure measurement accuracy, employee actions should be noted regularly in addition to ongoing customer retention rates.

Annual or six-month employee reviews should reveal achievements, some of these could be focused on things like; “reduce customer complaints by 20 percent” and “consistently find solutions to customer problems.”

Employees should meet with their supervisors at regular times to discuss their progress and resolve any problems that arise. Measuring productivity throughout the year helps employees stay focused on their goals.

The annual review is what reveals how much progress has been made against individual and company goals. Depending on the results, new goals can be created for the following year. 

Method 2: Quantitative measurement of productivity

The quantitative method measures productivity by the number of parts or products an employee produces in a given period of time, for example, per hour, day or month.

This method works very well for small businesses, but even if you manage large groups, this type of performance measurement is simple and saves time.

Productivity can be quickly calculated through a dashboard, to know the number of products that an employee produces in a given period of time. Those numbers are averaged to reveal productivity gains or losses over time.

Production can be measured by the volume or quantity of products created, or by the financial value of the product or service.

First, create your baseline: the average number of individual worker hours, days, or weeks needed to create that part of the product or the product itself under typical working conditions, with the employee working at optimal levels. Every employee on the production line is measured against that ideal (but realistic) level of productivity.

This type of measurement should also take into account the amount of time employees spend on activities such as job training, time spent waiting for materials to arrive or repairing broken equipment, and other factors that are not under their control. .

Method 3: 360 Degree Feedback

Another method to evaluate employee productivity is to request 360-degree feedback to obtain feedback from coworkers and measure a person’s productivity. This method can only be used if employees in your organization interact a lot with each other.

This measure requires that the employee’s productivity be evaluated by everyone they work or interact with on a daily basis, including those above and below their hierarchical level. 

Everyone being evaluated should know and understand the overall role and function of their coworkers, daily work tasks, etc. 

This method of evaluating employee productivity works best in smaller departments or organizations where everyone knows and interacts with each other.

Everyone, from managers to workers to receptionists, can comment on an employee’s productivity levels in relation to how well they have fulfilled their duties and contributed to the company’s overall productivity. This method is basically an evaluation of the team as a whole, since only the team members are the ones who evaluate.

To achieve the greatest possible accuracy, employees should first receive training on how to evaluate in a balanced and impartial manner. They should be trained to offer feedback that is based solely on their coworkers’ professional skills, not their personal feelings or beliefs.

The precision of this method is based on the fact of evaluating a good number of people, all of them trained in objective feedback, and all of them influential in productivity in the company.

Method 4: Measuring Sales Productivity

It can be challenging to measure sales and team productivity with complete precision. There are many factors that affect a salesperson’s production.

It starts by recording the different aspects of productivity within a given period of time. Those numbers may include:

  • The total number of sales completed in that time period.
  • The total amount of sales made.
  • The number of calls made to current customers.
  • The number of sales made to current customers.
  • The number of new customers gained
  • The number of calls made to new potential customers.
  • Expenses for sales/acquisition of new customers

These numbers should be recorded in a sales dashboard to measure your teams.

Before evaluating those numbers, first establish a baseline for sales productivity levels that fit your company’s size, market, and particular product type. I recommend researching the sales levels of successful companies the size of yours that sell the same or similar products as this will help you create a realistic baseline.

Also keep in mind important elements such as current growth trends and changes in your market. Observe how much time your sales team is spending on non-sales activities, such as travel and internal meetings. Be aware that they may be busy renegotiating terms with existing clients for a few weeks, leaving less time to acquire new clients. 

Keep these and other important factors in mind to ensure salesperson productivity levels are measured as accurately as possible. 

Method 5: Service evaluation

If this is one of the most difficult methods of assessing productivity to measure, accurate measurements can still be obtained.

Some service companies measure productivity by counting the number of tasks performed or the number of customers served in a day or hour. 

Other companies measure productivity by the speed of product or service delivery, customer feedback, or by individual and departmental self-assessments.

Some record the amount of time a service employee spends on each job task. This can be recorded using appropriate software or by having individual employees complete timesheets that specify job tasks.

Call centers typically conduct customer surveys at the end of the call to record the extent to which employees have answered customer questions and resolved problems.

Customer service productivity can be measured in many ways, including:

  • The time it takes for a customer to be served (such as call wait times or in-person wait times)
  • The time it takes to complete a customer’s order
  • Customer retention rates: the percentage of customers who return at least once
  • The length of time those customers are retained
  •  How often products are returned
  • How many customer complaints are received in a given time period

Whatever set of criteria you choose, first create your baseline, keep in mind your company’s best service level under current conditions, and compare employee productivity to that.

Be aware of the issues that prevent your employees from providing optimal service, as well as the fact that some aspects of service are performed faster than others. Decide which optimal service factors apply to your business, such as quality, speed, courtesy, cost-effectiveness, or a combination.

Likewise, keep in mind situations under your control that can slow down service productivity, such as staff shortages and equipment failure.

Your employees may also be delayed by having to complete orders by hand, or if, for example, they don’t have a touch-screen cash register to work with.

Every six to 12 months, create a new baseline that accurately takes into account your current market and operating conditions, and remember to reevaluate employees against those new standards.

Here are the advantages of having a Customer Service Dashboard to evaluate the productivity of this work team.

Method 6: Time Management

The time management method determines the productivity of employees by recording how they use their work time. 

An accurate measurement will reveal how much time you spend completing work obligations in a timely manner, as well as how much time is lost due to illness or excessive time off, that is, non-work-related conversations and distractions such as text messages and conversations. social networks, etc.

Although this is one of the methods of assessing productivity that can help set goals to reduce time wastage, the larger your company, the more difficult it can be to accurately measure each employee’s time management.

Proper time management will help prevent employees from being late in completing their tasks, and keep track of how long it took them to complete certain tasks and projects.

Research the features of the different programs to choose the one that can help you obtain the data you really want to measure.

Method 7: Measuring profit

Profit can be used as an effective tool to measure team productivity. In fact, measuring productivity in terms purely of profits earned is becoming one of the preferred methods of evaluating employee productivity for many small and medium-sized businesses.

Instead of engaging with data that tracks individual employee movements, measuring for profit involves looking only at the bottom line. Basically only the top level functions are closely monitored.

This method ensures that productivity measurements do not prevent employees from working creatively. In this case, the results and added value exceed the hours of work any day of the week.

To measure results, one of the vital factors we rely on is the team effectiveness ratio. It measures the amount of gross profits the company obtains for each peso spent on salary. It’s better than measuring profits against time [full-time equivalents], because we want the team to work smarter, not longer.

Method 8: Measuring the quality of tasks performed

Many companies prefer to measure productivity only by whether the assigned work is actually done.

They believe that because personal and professional lives blend, it is more accurate to base productivity measures on task completion, “not minutes spent in the office.”

Productivity can be tracked by breaking down projects into individual tasks. They are assigned to employees who are considered most capable of handling them. Tracking continues until projects are completed.

The best methods for evaluating productivity are based on “monitoring results” and employee progress, rather than work habits and behavior.

There are a lot of good productivity-related software tools, which help managers track projects and task completion.

There are different project management methods that serve to keep track, write down individual and group tasks, and track employee productivity on each particular project. These also allow you to write down the time that should be dedicated to different tasks and let you know when each one is completed.

Beyond reviewing an employee’s job performance, productivity measurements can be an important part of helping employees understand how much they have done to help your company achieve its goals.

Accurate productivity measurements can be a further step in ensuring not only higher profits, but also greater employee motivation, as well as job satisfaction and recognition of team achievements and individual achievements.

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