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com/articles/business/the-top-8-methods-for-accurately-measuring-
employee-productivity.htm
A toy factory worker might produce 100 toys each day. But if most of those
toys are defective and unsellable, that employee's productivity level is not
very high, and both work time and materials are being wasted.
When you measure your employees' productivity and discuss your findings
with them, you're letting them know that you expect them to care about
their work, perform it as well as they can, and work toward achieving
individual goals that are aligned with company goals.
Studies have shown that employees who are able to see a direct connection
between their productivity and company goals are far happier-and therefore
more productive-than those who don't see how their work affects company
goals.
Yet 2014 statistics show that only 40 percent of workers know what their
employer's goals and strategies are.
Before you can choose the most accurate productivity methods for your
business, identify your key performance indicators (KPIs). These are your
drivers-the profit-making, reputation-making parts of your organization.
Your KPIs must spring directly from your business's biggest goals, and must
relate only to those aspects of your business that you have some control
over.
If your store sells umbrellas in a very dry part of the country, the weather is
not a KPI for you, because you have no control over it. Because you do have
control over your inventory, sales for items such as sunglasses can be
considered a KPI.
For this to work correctly, employees must first be given clear, individual
productivity goals to work toward, as well as all the tools and information
they need to meet those goals.
The annual review then reveals how much progress was achieved toward
individual and company goals. New goals are then created for the upcoming
year.
This method works very well for small businesses, but even if you're
managing large groups, this kind of performance measurement is simple and
time-saving.
This type of measurement must also factor in the amount of time that
employees spend on activities such as job training, time spent waiting for
materials to arrive or broken equipment to be fixed, and other factors not
under their control. [http://smallbusiness.chron.com/measurements-
employee-productivity-1227.html]
The accuracy of this method is based on the fact that it involves a good
number of people, all of them trained in objective feedback, and all weighing
in on how well the employee's productivity meets their team and company
goals. [http://smallbusiness.chron.com/examples-employee-performance-
measurement-10776.html]
Keep in mind that many factors will come into play. If a sales rep's expenses
per sale amount to $3,000 when each sale only brings in $5,000, their work
is not providing a good return on investment.
Also factor in important elements such as current growth trends and shifts in
your market. Note how much time your sales team is spending in non-sales
activities, such as travel and internal meetings. They might also be busy re-
negotiating terms with existing customers some weeks, leaving less time for
acquiring new customers.
Take these and any other important factors into account, to ensure that
salesperson productivity levels are measured as accurately as possible.
[http://www.bizfilings.com/toolkit/news/office-hr/measuring-employee-
productivity.aspx and http://salesvue.com/how-do-you-measure-sales-
productivity/]
Some record the amount of time a service employee spends on each work
duty. This can be recorded either by using the right software or by having
individual employees fill out timesheets that specify work duties.
Call centers often use end-of-call customer surveys to record how well
employees have answered customer questions and solved problems.
How long it takes for a customer to be served (such as call waiting times or in-
person waiting times)
Factor in the problems that keep your employees from delivering optimal
service, and keep in mind that some aspects of service are performed more
quickly than others. Decide what factors of optimal service apply to your
business, such as quality, speed, politeness, cost-effectiveness, or a
combination of those.
Note the situations under your control that can slow service productivity,
such as staff shortages and equipment breakdowns. Your employees may be
also slowed down by having to fill out orders by hand, if 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 re-evaluate
employees based on those new standards.
[http://www.infoentrepreneurs.org/en/guides/measure-performance-and-
set-targets/]
Though this method can help employees and managers set goals for
reducing time losses, the bigger your business gets, the harder it can be to
accurately measure the time management of individual employees.
[http://www.hrworld.com/features/16-ways-measure-performance-
021908/]
There are helpful software programs that accurately measure how much
time employees actually spend (or don't spend) being productive. Some
programs require daily updates from employees, which reveals their
progress on a particular task or project. This keeps employees from
procrastinating, and creates a record of how long it took them to accomplish
certain tasks and projects.
Research the features of different programs, to choose the one that collects
the data you want to measure.
Notworking tracks exactly how much work time your employees are
spending on Twitter, Facebook and other social media, while their work is
neglected. The software is downloaded onto employees' desktops, to record
wasted work time. It also keeps track of the amount of money that could
have been made by the business, if the employee had been working during
that time.
Rather than getting involved with data that tracks individual employee
movements, measuring by profits involves watching only the bottom line.
Only higher level functions are closely watched.
This method ensures that productivity measurements don't keep employees
from working creatively or take a great deal of management's time. As
business consultant Roger Bryan of RCBryan & Associates says, "Watch the
money and everything will fall in line."
"To measure results, one of the vital factors we rely on is the team
effectiveness ratio. It measures how much gross profit the company gets for
every dollar spent on salary. It's better than measuring profit against time
[full-time equivalents], because we want the team to work smarter, not
longer." [http://www.allbusiness.com/16-ways-to-measure-employee-
productivity/16799830-18.html]
She believes that because personal and professional lives are increasingly
blending and overlapping, it's most accurate to base productivity
measurements on completion of tasks, "not minutes spent at the office."
Megan Berry, founder of social media startup LiftFive, agrees that the best
productivity measurements are about "keeping an eye on outcomes" and
employee progress, instead of on-the-job habits and behavior.
References
Mood Tracker™ Fall 2012 - Revealing Key Practices for Effective Recognition
-
http://www.globoforce.com/resources/research-reports/mood-tracker-fall-
2012-revealing-key-practices-for-effective-recognition/