For every business, employee productivity is of supreme importance. After all, employee productivity translates into the profitability of your company. But, how productive are your employees?
Are they productive or it only seems so on the surface? When it’s about employee productivity, you can’t assume things, you need evidence to know the efficiency of your workforce.
Even if your workforce appears to be productive, don’t settle until and unless you have quantifiable proof that things are exactly the way they appear. You need to take steadfast steps to measure employee productivity. After all, productivity isn’t about sitting at your desk for the entire day.
It’s way beyond and complex. So, don’t be glad if you see your workers glued to their desks for the whole day. You can bubble up with joy once you have proper metrics that indicate high workforce productivity.
Having said that, there are some Key Performance Indicators to determine workforce productivity. Here, we’ll discuss them and create a dedicated doorway for you to measure and take employee productivity to the next level with steadfast steps. Let’s begin by digging into the meaning of Key Performance Indicators (KPIs).
What are key performance indicators?
Key performance indicators as the name suggests are metrics that help you measure the overall performance of your organisation, employees or team and improve team management. In simple terms, we can say that KPIs are metrics that help us identify where we stand with respect to our goals and endeavours.
For example, if you aspire to enhance employee productivity, KPIs can indicate whether your efforts are reaping the desired results or taking you astray.
Now, the question that arises is what KPIs can help measure employee productivity? Let’s explore them together.
Human resource KPIs to measure employee productivity
Did you know that employee absenteeism is indirectly related to employee productivity? When your employees exhibit frequent absenteeism, they spend plenty of time away from work which they could otherwise spend on accomplishing different tasks. Given that, absenteeism rate is an indicator of lost efficiency.
If you measure your company’s current employee absenteeism rate and bring it down, you’ll naturally take your organisation’s productivity up the graph. But, to begin with you need to have a baseline according to which you can measure whether your company’s absenteeism rate is on the bad side.
Usually, an absenteeism rate of 1.5% gets considered good. But, remember it’s not a standard. Your organisation may have different rules and policies related to leaves and paid time off. Depending on that, you can decide the absenteeism rate that you find appropriate. Then, you can use it as your organisation’s standard and see where you actually stand with respect to it.
If your current situation is that your company’s absenteeism rate is higher than the standard, it’s time for you to implement some strategies to pull it down. You can devise these strategies depending upon your organisation’s culture and employee preferences.
Then, after implementing the strategies for a specific period of time, you can again calculate your organisation’s absenteeism rate. If it declines, you are on the right track. If it doesn’t, you need to think of some other strategies.
How to calculate absenteeism rate
This is not at all challenging. You just have to divide the number of workdays lost due to absenteeism by the total number of workdays in any given time period. Then, you have to multiply it by 100. You’ll get the absenteeism rate in percentage.
One of the best key performance indicators of employee productivity is ‘planned-to-done ratio.’ You can share daily tasks to accomplish with your employees and ask them to create a daily plan. They can create the plan on paper or with the help of the collaboration software your company uses if it has such features.
Then, at the end of the day or week, you can calculate the planned-to-done ratio for your employees. This will help you analyse how much your team is achieving in a given time frame. If you find the results to be satisfactory, that’s great.
But, if you don’t, it’s time for you to have a word with your team and devise some strategies to improve the overall productivity of your team. But, when tracking this ratio, it is important to understand that it is impossible for us to achieve whatever we planned absolutely.
We are humans not machines, right? So, you should keep a room for some discrepancies. You only need to ensure that the planned-to-done ratio remains satisfactory.
How to measure planned-to-done ratio
It’s pretty simple. Just divide the number of tasks your team or a particular employee accomplished to the number of tasks that were planned to be achieved in a particular time frame.
For example, if your team planned to achieve 14 tasks in a month but could achieve only 7, the planned-to-done ratio is 50%. As 50% is not a satisfactory ratio, it is obviously important to talk to your team and take this ratio up.
Average time for task completion
Productivity if defined in simple terms means the work done in a particular interval of time. As ‘average time for task completion’ is a KPI which is in alignment with the basic definition of productivity, it is one of the best metrics to measure employee productivity and performance.
To measure this KPI, you’ll have to measure the amount of time taken to complete a particular task or project and divide it by the number of times it was performed within a given time frame. From the calculations you’ll drive average employee productivity.
Once you have the numerical value with you, you should analyse it and see if it aligns with your organisation’s productivity goals. If not, then you know, it’s time to do something about it.
How to calculate average time for task completion
You only need a simple formula. Total time to complete a task (within a given time frame)/ number of times it was performed.
Quality of work
You may wonder what does quality have to do with productivity? Folks, there is a strong relationship between productivity and quality.
If an employee delivers work quickly but the quality is not satisfactory, would you consider him productive? Obviously not! To meet the standards of quality he might have to do the task again or do something to better the quality.
Whereas there might be some other employee who takes more time to complete his work but delivers impeccable quality. Whom will you consider to be more productive? Obviously, the latter because he delivers better output. Now that we have established a relationship between quality of work and productivity, let’s discuss how to measure quality as a KPI.
How to measure quality as a KPI
Cost of poor quality
Cost of poor quality implies the total losses due to poor quality. You can measure it by calculating % rework, %defects, right first time percentage and time dedicated to resolve issues. You can use this KPI for individual employees as well as teams.
Overdue corrective action rate
This KPI is helpful in measuring the extent to which your employees are capable of preventing recurring mistakes and sustaining quality. You can calculate it by dividing the number of overdue improvement actions by the number of open improvement actions.
The numerical value will be an indicator of how good your team is at preventing recurring errors which will ultimately help you estimate their productivity. If the same type of errors keep occurring frequently, naturally you are losing productivity and it’s time for you to take steadfast actions to stop the loss of productivity.
Your workforce’s ability to stay productive and competitive depends on their ability to learn. If your workers don’t learn from their mistakes, the training programs you conduct and other things, they are likely to exhibit the same levels of productivity or move down the graph due to stagnancy.
However, if they keep learning continuously, their productivity will eventually also witness a boost. Hence, you can use learning ability as an indicator of your workforce’s productivity. The following are some ways to measure the learning ability of your workforce.
Training program completion rates
If you offer training programs to your workers, how many of them complete them? To what extent do your employees complete their courses? These questions and their answers will help you determine the learning ability of your workforce.
Learner performance and progress
If your employees recently completed a training program, you can track their performance and progress via assessments such as online tests, real simulated taste etc. For example, if you trained your content writers to boost their writing speed, then you can assign them a task and see if they take less time than earlier or not.
Adherence to timelines
This is one of the simplest KPIs to measure productivity. It helps you determine the productivity of your workforce by evaluating their adherence to the set timelines.
For example, if a task requires around two hours to complete and keeping in mind the distractions that might occur, the deadline was set for 2.5 hours but your team still didn’t achieve it, then it’s an issue of concern.
When such instances happen once in a while, it’s okay. But, if they happen frequently, it indicates that your team isn’t as productive as it should be.
How to measure adherence to timelines
For this, you should keep a record of the total number of assigned tasks with timelines and the number of timelines met. Then, you can divide the number of timelines met to the number of timelines that were there in total. Finally, multiply it by 100 to achieve the percentage adherence to timelines. Further, you can also assign the task of determining adherence rates to team managers.
Revenue per employee
This KPI is specifically designed to help you measure the overall productivity of your team in terms of generating revenue. Though, it is not a direct indicator of employee productivity, it indirectly reflects it. After all, the profitability of an employee indirectly indicates his productivity only. The higher your revenue per employee, the more productive your workforce and the more profitable your organisation.
How to measure this metric
It’s pretty simple. All you have to do is divide the revenue generated by your workforce or the segment of workforce whose productivity you are determining to the total number of employees or the number of team members in the segment you are considering.
Your organisation’s growth directly relates to the productivity of your workforce. To be productive means to give your best at work everyday. If you aspire to enhance the productivity of your workforce, it is first important for you to determine the existing productivity of your employees.
Who knows your workforce might already be functioning at its best or it might not be as productive as you suppose it to be. You can use the different KPIs mentioned above to determine the productivity of your workforce. Wish you All the Best and may your workforce function at the best of its productivity.
About the Author
“Doing what you love is the cornerstone of having abundance in your life.” Wayne Dyer’s thoughts are well suited to Kiara Miller. She has been working as a content marketing professional at The Speakingnerd. Her passion for writing is also visible in the innovative joys of material she provides to her readers.