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Productivity in the workplace: How to measure. The most effective way

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“Productivity shows a company’s effectiveness level of producing a certain number of end products/services (outputs) having a certain number of resources (inputs) during a specific amount of time.”

Productivity in the workplace

Productivity in the workplace refers to the efficiency and effectiveness with which tasks and responsibilities are carried out to achieve organizational goals. It is a measure of how well resources, including time, skills, and tools, are utilized to generate desired outcomes. Here are key aspects and factors influencing workplace productivity:

Efficient Time Management: Prioritizing tasks, setting deadlines, and managing time effectively contribute to enhanced productivity. This involves creating schedules, avoiding multitasking, and focusing on one task at a time.

Clear Communication: Transparent and open communication fosters collaboration and ensures that everyone understands their roles and responsibilities. Clarity in communication helps in preventing misunderstandings and delays.

Effective Leadership: Strong leadership provides direction, motivation, and support to the team. Leaders play a crucial role in setting expectations, aligning team members with organizational goals, and resolving challenges promptly.

Employee Engagement: Engaged employees are more likely to be productive. Providing a positive work environment, recognizing achievements, and involving employees in decision-making contribute to higher levels of engagement.

Appropriate Tools and Resources: Equipping employees with the right tools and resources eliminates obstacles and streamlines processes. Technological advancements, suitable software, and adequate infrastructure enhance overall efficiency.

Training and Skill Development: Continuous learning and development opportunities help employees acquire new skills and stay updated in their fields. Well-trained staff members are better equipped to handle challenges and contribute to productivity.

Workplace Culture: A positive and inclusive workplace culture promotes collaboration, innovation, and a sense of belonging. When employees feel valued and supported, they are more likely to invest their efforts in their work.

Flexibility and Work-Life Balance: Offering flexibility in work arrangements and promoting a healthy work-life balance contribute to employee well-being. This, in turn, positively impacts productivity by reducing stress and increasing job satisfaction.

Goal Alignment: Ensuring that individual and team goals align with organizational objectives creates a sense of purpose. Employees are more motivated when they understand how their work contributes to the overall success of the company.

Recognition and Rewards: Acknowledging and rewarding employees for their contributions boosts morale and motivation. Recognition programs can range from verbal appreciation to tangible rewards, fostering a culture of appreciation.

Streamlined Processes: Simplifying and optimizing workflows eliminates unnecessary steps and bottlenecks. Streamlined processes reduce the likelihood of errors and save time, contributing to increased productivity.

Feedback and Improvement: Regular feedback mechanisms enable employees to identify areas for improvement. Continuous improvement, both at an individual and organizational level, is essential for sustained productivity.

Overall, workplace productivity is a multifaceted concept that involves various interconnected factors. By addressing these factors strategically, organizations can create an environment conducive to high levels of productivity and achievement of their objectives.

This is the definition of productivity as most of the world knows it. One might think that it sounds pretty simple and reasonable, right? You have a specific amount of resources (like different tech, human resources, budget, etc.) and you produce many end products.

Then you just take the number of outputs, divide those by the number of inputs, multiply whatever you get by 100%, and get the productivity rate of your workforce.

Is it easy to measure productivity in the workplace?

Except there is a problem here. If it’s that simple, why do most companies (even the best ones) struggle with measuring it?

Well, the problem is you know, EVERYTHING.

  • Number one workplace productivity depends on individuals as much as it depends on the team as a whole. Just because your team seems to be doing pretty well, doesn’t mean that it’s productive. For all you know, there could be just one guy doing 80% of the job and just dragging the team forward.

  • Number two the above formula has the potential to work if we consider cyborgs for example. Machines, ready to serve, work every day with the same attitude with no crashes, no jitters, no illness, etc. simply perfect workforce in other words. Sadly, we are humans :/ and we screw up all the time. It doesn’t work the same way with us.

  • Number three The timeframes of output delivery have a lot of influence on productivity. Delivering a website design in a month might be okay, but delivering it in a week is much better, right? But the difficult part is deciding how much time is right for a certain project. How do you calculate that time?

  • Number four Even if we consider that the quality of outputs (which is kinda of the most important thing) is always consistently high, (which is technically impossible, but hey, just for the sake of argument) the number of those outputs can be considered satisfactory or not depending on the number of inputs. What I mean is one person who can deliver two products in one month, has higher productivity than two people delivering three projects in that same month.

All of this technically means that you might have the most productive team in the world, or the worst possible productivity in your workplace (but still be profitable!) and never be able to tell. So how do you fix that?

Implementing project management software can enhance workplace productivity.

Measuring productivity

Google suggests tons of content on how to measure productivity and most of it includes talking with your employees, discussing means, looking for solutions together, etc.

Studies suggest that the best way to measure productivity is to do it industry by industry.

I say that’s all bullshit.

And here is why.

People, I mean all people including employees, want to work less and get paid more. It’s the simplest, unspoken rule of life and if anybody tells you that it’s not true, they lie. Having a conversation with employees about productivity measurement isn’t the brightest idea. Most of them will just suggest what suits them best on an individual level.

Measuring productivity by industry makes a bit more sense since you will have some kind of a non-subjective benchmark to base your opinion on and do comparisons. But this can’t be the best solution for every occasion.

Every business is different in its regard, different businesses have different teams (and all teams are unique as well), teams have different skills, companies have different clients, and so on. All of this happens in the same industry, with pretty similar companies, when utilizing close to the same amount of inputs to produce a certain number of outputs, in the same amount of time, (monthly/annually) and yet it’s never the same for each team. The best you can achieve with this approach is a rough estimate, which can be useful later.

To measure productivity in the workplace though, each company has to have its own, personal approach and benchmarks to base its decisions upon and compare this with the industry estimates for maximum efficiency and precision.

Imagine an example

Say we have two marketing teams with the same amount of monthly marketing budget, human resources, and available time that have to complete the same project. But the first team is exceptionally good at social media (thanks to the individual skills of employees doing the social marketing) and average with the rest of the activities, while the other one is average with everything.

Well obviously, the first team will finish the project sooner and maybe deliver higher quality (thanks to the individual strengths of social media marketers), but does it mean that they are more productive than the other team?

Not exactly. Their productivity, both as a team and as individuals, should be measured by separate benchmarks.

This is what you need to do for your team:

“Establish personal benchmarks on the team level that will tell you how many outputs perused inputs can be considered satisfactory for your workplace, and update those benchmarks consistently.”


Because the business world isn’t stuck in the same spot. It moves and evolves at a ridiculous pace. With the number of demands and client sophistication rising exponentially, productivity benchmarks have no option but to go up accordingly.

What’s considered good today, will be not good enough tomorrow. That’s an important point to keep in mind.

Setting the benchmarks

For this purpose, there are several things you can do:

  • Consider each of your team members on an individual level as the manager, you should have a pretty solid understanding of the capabilities of each of your team members: what they do well, what they struggle with, etc. You don’t need to go into too much detail, just have a bit general picture of the matter.

  • Look at the teamwork take a look at past projects. How much time did it take to complete one on average, given the resources available? Try to take into account the difficulty of the project as well. Also, consider how long your team members have been working with you: some may have just joined (which technically means low productivity by default) and some are more seasoned workers and should be able to cope with the same work much quicker than before.

  • Identify your strong and weak areas knowing what your team does easily and what they struggle with will help you understand what aspects need additional coaching/training to improve overall efficiency.

  • Draw a timeline knowing all the answers above, you should be able to draw a timeline for an average project to be completed using the, more or less, same resources.

After you have your timeline, you can calculate how many such projects your team can handle monthly/annually, and knowing the average profit and cost numbers associated with each project, you should be able to define the number of projects, which after completion, will render your teams as productive.

After this, come the industry benchmarks. You can compare your own established benchmarks to the industry average and understand how you are doing on a broader level, in addition to the personal level. This is important for understanding whether you are competitive on an industry level in terms of workforce productivity or not (again, regardless of being profitable).

For example, your industry average productivity might be something like 15%. Your team’s productivity, on the contrary, could be around 18%. This means that you only need to worry about the future and improving productivity continuously, to meet the rising demands of the business world.

On the other hand, if your team’s productivity is around 8%, then you are technically losing money, even if you are profitable at the same time. Knowing that most of the industry typically performs better than you is a hint that changes should be implemented in the areas where your team struggles (which you already found out before).

Measuring productivity is very relative. It depends on so many things that one might get lost when trying to put it all together. This is why the personalized approach works best in this case. Figure out how your team is performing currently, and the next steps will be easy to decipher.

As Lord Kelvin, a wise man once said: “If you can measure something, you can improve it”. This is, by far, the best approach there is.

Try project management software to increase team productivity for free

What Else Can Affect Productivity?

While the factors mentioned above are crucial for enhancing workplace productivity, several other conditions also play a significant role. These conditions, often overlooked, can have a profound impact on how efficiently and effectively work is performed. Here are some additional elements that can affect productivity:

Meal Quality: The quality of meals consumed by employees can significantly influence their productivity levels. Choosing good nutritious meal plans provides the necessary energy and mental clarity needed to perform tasks efficiently. On the other hand, poor meal quality, such as diets high in sugar and unhealthy fats, can lead to energy crashes, decreased focus, and overall lower productivity. Employers can enhance productivity by providing healthy meal options and encouraging good dietary habits among their workforce.

Work Environment: The physical work environment, including lighting, temperature, noise levels, and ergonomics, can affect an employee’s ability to focus and perform tasks. A well-designed workspace that minimizes distractions and physical discomfort can boost productivity. For example, ergonomic chairs and desks can prevent physical strain, while proper lighting can reduce eye fatigue.

Health and Well-being: Employee health is directly linked to productivity. Chronic health issues, stress, and burnout can severely hinder an employee’s ability to work efficiently. Promoting a healthy lifestyle, offering mental health support, and providing adequate sick leave can help maintain a healthy workforce. Wellness programs and regular health check-ups can also be beneficial.

Sleep Quality: Adequate and restful sleep is essential for cognitive functions such as concentration, decision-making, and problem-solving. Employees who suffer from sleep deprivation are more likely to experience decreased productivity and increased errors. Encouraging a work-life balance that allows for sufficient rest and promoting awareness about the importance of sleep can help improve productivity.

Workload Management: An unmanageable workload can lead to stress and burnout, negatively impacting productivity. Proper workload management, including realistic deadlines, delegation, and adequate support, is essential. Ensuring that employees have a balanced workload and providing them with the resources they need can prevent overwhelm and maintain productivity levels.

Employee Relationships: Positive relationships among employees and between employees and management can enhance workplace morale and productivity. Team-building activities, open communication channels, and conflict resolution mechanisms can foster a collaborative and supportive work environment. When employees feel respected and valued, they are more likely to be motivated and productive.

Technology and Tools: The availability and efficiency of technology and tools can greatly impact productivity. Outdated or malfunctioning equipment can cause delays and frustration, whereas advanced and user-friendly technology can streamline processes and enhance efficiency. Regular updates and training on new tools can ensure that employees are working at their best capacity.

External Stressors: Factors outside the workplace, such as personal issues or socio-economic conditions, can affect an employee’s mental state and productivity. Offering support through employee assistance programs (EAPs), flexible working hours, or remote work options can help employees manage their personal lives better, thereby improving their productivity at work.

Professional Development: Opportunities for growth and development can keep employees engaged and productive. Providing training programs, career advancement opportunities, and continuous learning resources can help employees feel more competent and motivated. A workforce that is constantly improving its skills is more likely to be productive.

By recognizing and addressing these additional conditions, organizations can create a more comprehensive strategy for enhancing productivity. A holistic approach that considers both the well-being and the work environment of employees is key to achieving sustained productivity improvements.

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