Three Truths behind Employee Productivity (& How to measure and Improve it)

It seems that managers everywhere in every industry are asking how to improve employee productivity.    

Given the current economic outlook for 2023 and amidst wicked uncertainty, this question will only get louder and more frequent. 

Companies are cutting costs, downsizing, and squeezing the most out of the least amount of resources possible. 

If only there were something you could add to the water to make every one of your employees work faster.

But there isn’t. And working faster and increasing productivity isn’t always the solution to get ahead of an economic downturn.

Consider instead a strategic approach to setting the foundation for employee productivity and a human-centered approach to improving it. 

Kind of like how you would approach building a puzzle.

Here are three widely-recognized truths about jigsaw puzzles:

1. You can’t put a puzzle together without the picture on the front of the box.
2. Expert puzzlers have a consistent process they use for every puzzle, every time. (Not always, but typically they begin with corners and edges, then fill in the middle.)
3. A puzzle doesn’t build itself. People put it together.

The same goes for Employee Productivity. 

1. You cannot improve productivity without creating clear and aligned pictures of your current and desired states of productivity.
2. Expert managers have a consistent process they use for measuring employee productivity.
3. Productivity doesn’t happen. People are productive.

Let’s break down each of these three truths a bit further. We’ll also explore how to turn these truths into actionable steps you can apply to improve employee productivity (and basically any company metric when you think about it!).

Are looking to build high-performing teams? Our expertly crafted goal-setting guide will equip you with the efficient tools to take your team to the next level. 

TRUTH 1 - You cannot improve employee productivity without creating clear and aligned pictures of your current and desired states of productivity.

Simply put, employee productivity begins with clarity and alignment. Just like putting a puzzle together starts with the picture on the box.

Call them KPIs, OKRs, lions, tigers, bears, oh my! Honestly, what you call your metrics is really what matters least. Don’t get ahead of yourself. Back things up and keep your approach simple.

Start with answering one question: What are the most important things we need to track to measure employee productivity? (And back to the analogy: If productivity is a puzzle, what are all the pieces that make it up?)

Employee Productivity is all about input vs. output and is typically identified as “how many” or “how much.” 

How much can you produce (output) with what you put in (input)? Total output divided by total input gives you a productivity measure.

How many projects can you complete in a quarter? How many kits can you assemble in a shift? How many employees does it take to manufacture one widget? How much does it cost to pack one order? 

How to Improve Workplace Productivity: 

1. To increase efficiency and productivity in the workplace, leverage your front-line leaders and your leadership team to create an exhaustive list of every metric needed to measure as input to determine overall productivity.

After you’ve created the list, share it with each leader and ask them for feedback to ensure clarity and alignment. Eliminate everything you don’t need and solidify your final list of metrics. 

2. Create the current state of your productivity by beginning to actually collect data. (We’ll talk about how to do this when we discuss the second truth.)

Have you already been measuring these metrics but not really tracking or reporting them? Great. Pull the data from the last four quarters. 

3. Once you have productivity data, plot them against your other KPIs (profitability, quality, etc.) to make predictions about what the actual productivity standards should be. 

4. Set some productivity goals to create a desired state picture. The difference between your current performance and the performance in your desired state is the productivity improvement you are seeking. 

5. Communicate these productivity goals throughout your organization in relation to current performance so employees understand the extent of improvement necessary. Ensure all leaders are aligned with this picture you’ve created together.

Bottomline: Begin with creating clear and aligned pictures of your current and desired states of productivity. Start with the picture on the box.

TRUTH 2 - Expert managers have a consistent process they use for measuring employee productivity.

Management guru Peter Drucker famously said “If you can’t measure it you can’t manage it.” 

Let’s apply that to productivity. You cannot improve employee productivity if you cannot measure your productivity consistently and accurately. 

How to Measure Employee Productivity: 

1. Decide how each metric will be measured, then make sure it is measured the same way every time. Keep all other factors as consistent as possible so you can clearly identify and analyze trends.

2. Determine how you will document these measurements. In a software system? In an Excel spreadsheet?

3. What will be the frequency and structure for tracking and reporting collected data to identify trends and understand progress toward your goals? 

4. Enlist the wisdom of your leadership team to determine the right-fit systems for measuring, tracking, and reporting and to ensure alignment throughout the process.

5. Engage and align your leaders around consistent and accurate measurement processes that provides increased transparency and visibility to what is being accomplished and what still remains to be improved when it comes to your productivity.

Bottomline: Create systems and processes that drive productivity improvements through the consistent and accurate measuring, tracking, and reporting of the metrics that determine your productivity. And ensure at every step that your team is aligned.

Interested in finding out if your team is aligned or not? Download this free scorecard to do with your team.

TRUTH 3 - Productivity doesn’t happen. People are productive.

At the end of the day, productivity is all about people. Like we said at the start, the puzzle won’t build itself.

You simply cannot improve employee productivity without engaging your leadership team, front-line leaders, and employees in the process.

Employee Engagement begins with effective hiring and onboarding:

• A clear job description;
• Pointed questions to ensure candidates are either qualified or coachable for the specific role;
• Connecting new employees to the most important people in the organization to help them do their jobs successfully;
• Effectively training new employees, then asking them to train you so you can check for learning. Retrain where needed;
• Show new employees what success in their role looks like.

Of course, then comes ongoing management and communication.

Micromanaging is not - and never will be - the answer. You hired them. Tell them what they need to know, give them the tools to be successful, then get out of their way and let them do what you hired them to do. 

Communicate when role expectations change. Any time there is a change to a team member’s role and/or related processes tell them immediately.

On an ongoing basis, the most effective thing you can do is hold your leaders accountable to engaging employees. Make sure they talk to them, ask them what’s working and what isn’t, and listen to them. 

It is a leader’s job to commit to removing obstacles that could get in the way of productivity aims.

Make sure leaders are holding their team members accountable and providing quick and clear feedback for improvement. 

The days of annual employee reviews are gone. Managers should constantly be reviewing employee performance and providing feedback.  

And as the organizational leader, remember that it’s your job to recognize progress to goals and successful contributions. Build in time to celebrate when employee productivity improves. Not only does this keep up employee engagement, but it also reinforces expectations.

Overall, take a look at how you are and are not creating an environment of psychological safety for employees. Companies that engineer high psychological safety experience many benefits including 50% more productivity.

Bottomline: Businesses are not productive - people are. A human-centered approach to improving productivity requires effective hiring, onboarding, expectation setting, feedback loops, performance touchpoints, and celebration of successes. But most importantly creating a workplace with high psychological safety will ensure employees feel engaged in the work they do, which will ultimately result in desired performance outcomes.

Are you a CEO who needs to up your organization’s productivity game but aren’t sure where to begin? Or maybe you know where to begin but the implementation of the key elements outlined here feels overwhelming given current pressures, competing priorities, or lack of bandwidth.