Your Ultimate Mini Guide to Skyrocketing Employee Productivity
What's employee productivity, and how does it affect overall work performance? Can you measure it, and how can you improve both? These are vital questions for organizations. Let's delve into solutions and insights in simple terms.
- Meaning of employee productivity and top factors influencing it.
- Why is employee productivity now at its lowest in the last 75 years?
- 8 key strategies to improve employee productivity.
- How to measure employee productivity?
- Case Studies: Why Apple, Dell, Google are 40% more productive than others?
- The future of employee productivity.
To know employee productivity better, let us first understand the concept of productivity.
What is Productivity?
Understanding productivity is crucial for organizations aiming to optimize their workforce and resources.
The Bureau of Labor Statistics defines productivity as “a measure of economic performance that compares the amount of goods and services produced (output) with the amount of inputs used to produce those goods and services.”
On a personal level, most of us evaluate whether we "felt" very productive on a certain day. However, the following suggests integrating various perspectives on productivity:
Personal Productivity: As previously mentioned, personal productivity refers to how well a person completes duties or realizes personal objectives. Like evaluating how well you handle your own workload.
National Productivity: When we discuss productivity nationally, we're interested in how well a nation uses its resources to produce goods and services. It depicts both economic development and rising living standards.
Business Productivity: Business productivity refers to an organization's ability to profit from the time and resources used. It is frequently expressed as pay per hour performed. Businesses use it to evaluate their performance and competitiveness.
Organizational Productivity: This measures the overall productivity of a business. It's like looking at the broad picture—how much revenue a company makes per employee. It aids businesses in streamlining their procedures.
Employee Productivity is the last one, which we'll discuss in more detail in this blog.
What is Employee Productivity?
Employee productivity is the rate at which employees convert their actions into results. In basic terms, it assesses how productive workers are.
Let's break down employee productivity using some fundamental questions to gain a better understanding.
- How fast can your employee complete a task?
- Do they do it correctly?
- Do they frequently require help or guidance?
You can gauge an employee's productivity by tallying up the responses to these questions. Doing this for all your employees gives you a sense of your overall workplace productivity.
To fully appreciate its impact and optimize it effectively, it's essential to understand the different perspectives— ranging from personal goals and national economic policies to business strategies and organizational performance.
Let’s briefly understand the significance of employee productivity in each of the aspects:
Economic Growth: It propels both national and global economic expansion.
Competitiveness: Provides businesses with a valuable competitive advantage.
Profitability: Enhances organizational profitability and sustainability.
Quality of Life: Elevates the overall quality of life for individuals.
Engagement: Fosters higher employee engagement and satisfaction levels, benefiting individuals and organizations.
Top Factors Influencing Productivity
The importance of employee productivity is closely related to the factors that affect it. The full potential of a productive workforce can only be realized when these elements are considered.
1. The work environment and corporate culture
The culture and values at work greatly impact productivity. Employee performance typically improves in environments that are welcoming and cheerful.
2. Career development and growth opportunities
Giving employees the chance to advance personally and professionally inspires them to perform more productively over the long run.
3. The role of modern tools and technology
Tasks can be streamlined to become quicker and more effective, increasing overall productivity.
4. Psychological safety, feedback culture, and clear expectations
When employees feel comfortable sharing their ideas, get helpful criticism, and know what is expected of them, they are more likely to be engaged in their work.
Read our blog on: Psychological Safety
Employee Productivity Now At Lowest In 75 years: Is Remote, Hybrid Work To Blame?
The last quarters regarding worker productivity is a unique and unprecedented occurrence in the recorded history of U.S. labor statistics.
Reportedly, in the first quarter of 2023, U.S. worker productivity dropped by 2.7% compared to the same period in the previous year. Infact, this decline trend has also continued for the past few consecutive quarters.
The main reasons for this drop were that people worked 3.0% more hours but only produced 0.02% more output. Additionally, unit labor costs increased by 6.3%, and compensation for workers increased by 3.4%.
But what are the root causes of such a drop in productivity?
Fortune interviewed Gregory Daco, EY-Parthenon's chief economist, to understand the reasons behind this trend. He suggested that remote and hybrid work arrangements might contribute to this decline due to reduced employee engagement
Other important factors include the high number of job openings, fast hiring rates, and increased resignations, all of which have hit record levels since the pandemic. This suggests that it has been challenging for employers to train their employees to reach pre-pandemic productivity levels.
8 Key Strategies To Improve Employee Productivity
Here are eight ways through which you will surely see a positive productivity output from your workforce:
1. Ditch Meaningless Meetings
Time spent on meetings is one of the biggest obstacles to employee productivity. Yet we continue to schedule them, attend them and inevitably complain about them.
Almost 47% of employees complained that the time spent on meetings was the number one time-waster during work hours, as reported by Atlassian.
Meetings prove to be great interrupters when employees get pulled out of their "zone" during work hours. Only to hear information that could have easily relayed through an email.
Also, consider that employees spend an additional amount of time preparing for a meeting (read "waste time") instead of focusing on getting their actual job done.
But if you must conduct a meeting, do it as Steve Jobs did.
After every meeting, Jobs had an actionable list of tasks describing exactly what needed to get done and which team member is responsible for getting it done.
He even assigned a title for that particular employee- "Directly Responsible Individual."
Thus, everyone in the meeting has a clear idea of their expectations and the person responsible.
No frills and flares. Just plain old employee productivity at its best.
Here are some additional pointers on running productive meetings with high-efficiency gains:
- Before scheduling the next meeting, justify the purpose of the meeting. If you can send the same information through an email, then conducting that meeting is probably not worth the effort.
- But if you must conduct a meeting, then go prepared with the required arsenal. Make a list of requirements and agendas to discuss at the meeting.
- Limit the number of people allowed in the meeting. The larger the size of team members, the larger is the possibility of increased distractions.
- Give employees the option to opt-out of a meeting during their work hours if they have some other work.
- Set a limit on the amount of time spent on the meeting.
2. Emphasize Quality Over Quantity
The goal should always be not on the amount of time spent working but instead on what you accomplish during your work.
Bosses like to measure employee productivity by conceptualizing the idea of everyone being an "ideal worker."
An ideal worker comes to the office before anyone else and leaves after everyone else.
But this is hardly a suitable benchmark in measuring employee productivity as a whole.
In 2014, Stanford researchers discovered the phenomenon called the "productivity cliff." The study found that people who put in 70 hours per week produce nothing more than those put in 55 for similar work.
Longer hours do not always yield better results. To summarize, the quality of the work done has greater efficiency gains than the quantity.
Here are some ways through which you can encourage a better quality of work rather than the quantity:
- Research shows that a shorter workday (such as a 6-hour workday in Sweden) resulted in employees feeling healthier, less stressed, and take lesser sick days.
- Offer regular breaks at work so that employees can feel recharged at an individual level.
- Encourage team members to leave their work at the office and not let it hamper their personal life.
3. KPI's and OKR's To Hold Your Employees Accountable
The one thing that every manager should never forget about employee productivity is this:
Stop managing their time. Start managing their goals.
Smart managers know that micromanaging will not make life easier for anyone.
When managers become obsessed with time tracking every aspect of employees' work hours, the chances are that employees become even more prone to slacking off.
And that's not all.
Manager's who micromanage are more likely to be more resented by their team members. It, in turn, results in a communication bridge between them.
Your best option at an individual level?
Invest in collaboration tools, products, or services that focus on completing the goals. It is much better than focusing on micromanaging your employees' work hours.
If an employee finishes a project in half of the amount of time and spends the other half on social networking, it should be the least of your worries.
The goals are getting smashed, as far as concerned.
Some ways through which you can give goal completion more priority overtime tracking are:
Invest in OKRs
The term OKR, which stands for "Objectives and Key Results," is a goal-setting system innovated by Google.
As the name implies, OKR has two major components- the Objective and the Key Results:
- Objectives are the SMART goals that an employee needs to complete. Objectives should be achievable and specific.
- Key Performance Indicators are a set of metrics that measure one's progress towards fulfilling the objectives.
Hire A Project Manager
When a single manager has to oversee multiple projects, a lot of mishaps can happen.
The amount of time for the completion of projects will significantly increase. Instead of working, employees would spend time on tasks that are unrelated to work.
And this is exactly why you need a project manager.
A project manager is better attuned to looking over projects that he handles. He has the experience and credibility to make better decisions and ensure that the project gets completed well within the time limit.
4. Make The Email Experience Less Disruptive To Workforce Productivity
Adam Alter, author of "Irresistible: The Rise of Addictive Technology", explains how checking email during work hours can drastically change your level of productivity:
So, on average, we check our emails six seconds after they arrive, which is a staggering number. Now it's staggering because when you check your email, it takes about 25 minutes on average for you to get back into the zone of maximum productivity.
Once your employees get into the continuous flow of their incoming email, half of the employee productivity battle gets lost.
And here's the thing- you can't do anything to remove such distractions.
After all, emails in the workplace are as similar to peanut butter and jelly in a sandwich. There is no one without the other.
But what you can do is try to control this email flow in a way so that it affects the workforce productivity in the least.
- Encourage good email etiquette among the team members for higher efficiency gains.
- Keep the subject lines of the emails short and clearly describe what the email is about.
- Instead of relying on emails to manage projects (which can turn chaotic and hectic at best), invest in a project manager or project management tool like Trello. A project management tool will work wonders to help you manage your organization's projects better and thus also help in boosting overall employee productivity.
- To make communication between employees easier, you can try out good collaboration tools, products, or services like Skype, Slack, etc.
5. Invest In "Still Spaces" To Boost Workforce Productivity
Today's workplaces are usually mayhem of noises, distractions, and constant interruptions.
A workplace is bound to be noisy and chaotic at times.
But it comes at the expense of dwindling concentration and menial productivity output.
Limiting noise and distractions can slightly improve employee productivity, but it still might not be enough.
That's why workplaces of today are incorporating "silent thought spaces."
It's where employees can go to have a session of uninterrupted work done, meditate or simply recharge their overworked minds.
To combat this, Steelcase has developed a set of five Quiet Spaces, incorporating the company's Vertical Intelligent Architecture soundproof architectural walls.
These silent settings make these "spaces" ideal for yoga, meditation, or simply peaceful work time.
6. Exercise Breaks Help To Improve Employee Productivity
Taking out time to exercise may help improve employee productivity, according to a study published in the Journal of Occupational and Environmental Medicine.
Frequent exercise can have innumerable benefits, including:
- Keeping the mind focused and thus increasing productivity.
- Increased energy levels and improved work ethics.
- It keeps people mentally sharp and agile.
- Acts in reducing stress among employees working long hours.
- It helps prevent a multitude of illnesses which brings down workforce productivity.
Here are some ways through which you can encourage employees to sneak in some form of exercise in the workplace:
- Encourage employees by rewarding employees if they make their daily commute through a cycle or by walking.
- Instead of regular desks and chairs, invest in standing desks or stability balls to sit upon.
- Conduct "walking meetings" to utilize time spent on meetings.
- Encourage employees to work out by offering "exercise breaks."
- Invest in a corporate wellness program to build a culture of health and ultimate productivity in your organization.
7. Give Them Something Nice To Look At
Sometimes unexpected factors can have a bigger impact on increasing your workforce productivity than you think.
It might sound unlikely, but your office decor has (more than a little) significance in increasing productivity among your employees.
Research suggests that an office enriched with potted plants can increase productivity by up to 15 percent.
Here are some ways to design your office for maximum employee productivity:
- Optimizing the lighting in your workplace is one of the easiest ways to improve employee productivity. It ensures that the eye strain gets reduced to the minimum.
- Utilize natural lighting during work hours as much as possible.
- A cluttered workplace is more likely to make someone feel far more stressed than they are. Minimalistic working environments make a workplace look all kinds of chic and inviting. It also makes it easier for employees to get their work done without getting distracted.
- Workplace colors play a huge role in building inspiration and motivation among employees working.
- Make sure that your workplace smells nice and fresh. Scents like peppermint aim to refresh one's senses. Meanwhile, citrus aromas are great to de-stress any anxious employees.
8. Employee Engagement To Improve Employee Productivity
Here comes the last but the most vital factor in influencing employee productivity.
The single best thing a company can do to boost employee productivity is to ensure that employees are happy, motivated, and engaged.
A highly engaged workforce can outperform a company experiencing low employee engagement by a whopping 202%.
An engaged employee is more likely to be happier, be more productive, take fewer sick days, and create better working environments.
Here are some ways through which you can build a more productive and happier workforce:
- Make employee appreciation a norm in your company. If an employee has done an excellent job, show that you know it.
- Give continuous feedback to your team members.
- Give frequent and exciting rewards for time spent on good work.
- Involve employees in the company's decision-making processes. Make them feel like they contributed to the productivity output.
- Let employees know that their opinion counts. Regularly take their input, suggestions, and ideas into consideration.
- Invest in a corporate health care plan for better workforce productivity. Health is the greatest form of care that you can offer.
Cracking the Code: Measuring Employee Productivity
Meetings, group chats at work, and emails now take up two-thirds of the working day? Employees spend more than five hours daily at work yet are not working effectively. A system that solely considers the worthwhile labor being done is necessary for measuring productivity, especially to increase it.
Employee productivity must be improved, but so must the method by which it is measured.
First, we must develop a method of measuring productivity that correctly reflects the modern worker.
It is, therefore, necessary to abandon the conventional measurements that emphasize quantitative factors like output per hour or cost per unit generated. Indeed, traditional measures are easy to understand, but they do not give the whole picture.
The question that now arises is: What do the measures for current employee productivity look like? What factors should we take into account, most importantly?
Today's workforce productivity measurement calls for a more subtle approach.
Four elements provide us with important information about how modern employees perform and highlight areas where productivity can be enhanced. They are as follows:
Task completion: How much valuable work was completed during the period?
Hours worked: How much time was spent working on the value-added work?
Work quality: How useful is the work product that is being produced?
Efficiency: Is the work being done efficiently?
Now, let’s understand what valuable work is.
Employees do valuable work when it advances the business's goals and objectives but takes up less than three hours of their workday.
Here are two examples of calculating employee productivity in terms of valuable work beyond project completion:
**Customer Service Team **
A customer service team assesses their productivity in handling customer inquiries effectively. In a month, they received and resolved 10,000 customer inquiries, and the team collectively worked for 1,000 hours.
Productivity = Resolved Inquiries / Service Hours Productivity = 10,000 inquiries / 1,000 hours = 10 inquiries resolved per service hour
This indicates that, on average, the customer service team successfully addressed 10 customer inquiries per hour of work, reflecting their efficiency in providing support.
Research and Development (R&D) Department
An R&D department in a technology company wants to measure how effectively they generate innovative ideas. Over a year, the R&D team generated 100 innovative ideas, and the team members collectively worked for 5,000 hours.
Productivity = Innovative Ideas Generated / R&D Hours Productivity = 100 innovative ideas / 5,000 hours = 0.02 innovative ideas per R&D hour
This demonstrates that, on average, the R&D team generated 0.02 innovative ideas for every hour they spent working, reflecting their ability to produce valuable intellectual property.
Apple, Netflix, Google, And Dell Are 40% More Productive Than Others. Let’s Know Why.
Companies like Apple, Netflix, Google, and Dell are 40% more productive than the average company, according to Bain & Company research. It's not just about hiring star players – they all start with similar talent.
What sets them apart? They optimize time, talent, and energy. Their efficient processes make them 40% more productive and 30%-50% more profitable than peers. They achieve in the morning what others do in a week, compounding their advantage over time.
In a decade, they can outproduce others 30 times over with the same team.
Let’s know how did they crack it.
1. They kept quality talent in a handful of crucial ranks
Typical companies distribute top talent evenly, while Apple and Google concentrate 95% of A-level talent in critical roles.
Example: Apple took 2 years with 600 engineers for iOS 10. Microsoft took 5 years with 10,000 engineers for Vista due to different team structures.
2. They kept a team-centric rewards system
Apple employed a team-centric reward system: Everyone on the team had to excel for anyone to receive an exceptional performance appraisal. In contrast, Microsoft adopted a stacked ranking system, where 20% of each team could receive an exceptional review primarily based on individual performance. Eventually, Microsoft abandoned the stacked ranking system.
3. Peak productivity without organizational drag
Organizational drag is a silent productivity killer. It is very common as businesses expand, leading to excessive processes replacing human judgment. A study featured in Harvard Business Review sheds light on this drag's staggering cost, draining over $3 trillion from the US economy annually.
Let's look at expense management, a common productivity hurdle. Most companies have strict limits, audits, and tracking. Netflix? They keep it simple: "Act in Netflix's best interest."
It's all about trust. They empower employees to contribute positively, skipping resource-draining processes. This trust boosts productivity.
4. Inspiring leaders set them apart
An engaged employee is 44% more productive than a satisfied worker, but an employee who feels inspired at work is nearly 125% more productive than a satisfied one, says Bain & Company partner Michael Mankins.
Dell Technologies recognized this productivity difference between inspired and average teams. According to Dell’s values, there are no exceptions for exceptional leadership, and good leadership is not enough now. They realize and execute the following guiding principles in leadership:
Leadership Listens: Leading by truly hearing.
Leadership Learns: Growing through every experience.
Leadership Links: Connecting the dots to success.
Leadership Lifts: Elevating individuals, elevating teams.
Leadership Loves: Leading with passion and care.
Future of Employee Productivity
As the twenty-first century progresses, technology will continue to influence how we work and how we assess productivity.
Below are some significant predictions regarding employee productivity for the upcoming years:
Artificial Intelligence and Machine Learning
AI and ML will streamline tasks, offering data-driven insights for smarter decisions.
Automation will free up employees' time, enhancing productivity and creativity.
Augmented and Virtual Reality
AR and VR will revolutionize training and remote work, boosting engagement.
Immersive experiences will transform how teams collaborate and learn.
- Flexible environments will encourage teamwork and adaptability.
- Digital tools and shared spaces will foster real-time collaboration, accelerating projects.
According to a survey performed by the International Facility Management Association (IFMA), 90% of those who had installed collaborative workplaces reported to have witnessed an increase in employee collaboration and productivity.
In our ever-changing world of productivity, one thing remains constant: the limitless potential of individuals and teams. As we journey into the future, embracing technology, fostering collaboration, and nurturing creativity, we unlock new horizons of effectiveness and fulfillment. Remember, productivity isn't just about doing more; it's about doing better. To create a workplace where success knows no bounds, empower your teams, leverage future tools, and unite efforts. Here's to a future brimming with boundless success and an extraordinary workforce!