How to Measure Your Team’s Productivity and Unleash Their Potential

We already know that productivity is a key component in any company’s growth and success. It is a fundamental element in remaining competitive, resilient, and agile through any economic or market challenge. However, varying business industries measure productivity in different ways. Every organization needs to determine and develop a strategy that will be most beneficial to them.

There are numerous approaches to assess an organization’s productivity, but they all have one thing in common: the best methods utilize reliable data and metrics relevant to the roles of each individual employee. This is why 80% of the largest companies in the US monitor the productivity metrics of employees in real time.

Through quantifying productivity, organizations can quickly recognize areas for development, make data-driven decisions, implement strategic gameplans, and essentially drive greater success.

In this article, we’ll discuss the value of measuring productivity, the essential metrics to consider, and how you can leverage these insights to unleash your team’s potential as they work towards achieving the company’s overall business goals.

What are productivity metrics?

Many organizations still fall into the trap of measuring productivity based on impression, rather than the quality and timeliness of output. A classic example is how leaders consider employees who spend most of their time on their desks as highly productive individuals, simply because they take less breaks. As a business looking to succeed, you can’t base the organization’s productivity solely on employees being at their desks.

Productivity metrics are data points essential in uncovering actual results versus the time spent in accomplishing their work. These statistics allow you to determine whether your team is meeting their targets. It provides a leading indicator of the organization’s overall performance. This will help determine their strong points, areas for improvement, and how you can support their individual productivity and growth.

Why do you need to measure your team’s productivity?

There are many reasons why productivity metrics are important in any organization, but the core benefits you can leverage are:

• Generating accurate insights on employee performance and whether or not the organization is on-track towards the company’s targets
• Understanding how much time it actually takes for employees to accomplish their tasks and produce valuable output to boost productivity and efficiency
• Making smarter decisions and strategies to enhance workflows, manpower management, project management, and resource allocation

All of these factors contribute to minimizing the input while maximizing the output. It results in the company’s longevity, profitability, and growth. However, it’s important to note that while basic productivity monitoring through status updates and quarterly assessments can provide some insight into employee performance, you still won’t generate real-time, reliable data that can be leveraged to achieve your organizational goals.

This is why collecting and analyzing the right metrics relevant to your industry is the only way to develop an effective approach to measuring productivity.

How to Measure Productivity and Unleash Your Team’s Potential

Determining the right productivity metrics to track in your organization depends on what you need to measure. The specific metrics for a construction company are different from that of a marketing agency’s. Sometimes companies in the same industry also track different measures of productivity.

So, how do you know how and where to start measuring your team’s productivity?

STEP 1: Outline your SMART business goals

Determining your company objectives is the most crucial aspect of any business. They set the targets your organization will aim for. In adopting productivity metrics, what you need to measure and how you’ll calculate them will depend on these identified goals.

As such, it’s critical to have SMART goals. This will provide a concrete direction to help focus your efforts and resources on tasks or projects that will lead you closer to achieving your definition of success.

SMART is an acronym for Specific, Measurable, Achievable, Realistic, and Timely. These are five aspects essential in developing actionable, targeted strategies that are promptly executed, constantly monitored, and accurately optimized.

Once you have outlined your SMART goals, each department can then drill them down into Key Performance Indicators (KPIs). These KPIs should now be specific to their roles and responsibilities. This leads us to the second step of the process: know what and how to measure the team’s productivity.

STEP 2: Identify what you need to measure

Despite having diverse businesses, the fundamental approach remains the same: it all starts with the KPIs most relevant to your business. These metrics are ideally based on your overall SMART business goals. As far as actionable goals are concerned, they need to be quantifiable for you to gauge its effectiveness.

Some of the recommended productivity metrics that generally apply to all types of businesses are:

• Overall Labor Effectiveness – Measures the time employees spent fulfilling their role in the team, the quantity of products/services/tasks they accomplished in a specific period of time, and quality of products or services provided by your organization. Calculating these factors will give you a better idea of your team’s strongest and weakest areas.
• Output Formula – The basic formula is Productivity = Output / Input. This metric will help you understand the revenue against the work produced. Essentially, the output (total revenue earned in a specific period) is divided by the input (total hours worked during the same timeframe). This will give you a quantifiable measure of the organization’s labor productivity to identify loopholes or areas for optimization. The formula may also be utilized to measure output per machine, per unit of material, and other factors critical to your business.
• Time Spent on Tasks and Projects – Time is the most expensive resource in any business, so it only makes sense to ensure that it’s being spent in the most impactful areas as possible. Monitoring how much time your employees invest in each task and project will not only improve their productivity, but also enable bigger financial savings. A time tracking software can help you generate detailed and accurate time data that you can use to optimize workflows, address bottlenecks, and streamline processes to boost productivity.
• Customer Satisfaction – Whether you’re in the industry of consumer goods or client servicing, client feedback is of utmost importance to the success of your business. Customer satisfaction can be measured through surveys, online ratings, and the number of repeat buyers or loyal clients.
• Sales Growth – The primary anchor for the profitability of any business is sales growth. It is always logical to compare the previous year’s revenue to the present number. To do so, you can use this formula: This Year’s Sales – Previous Year’s Sales / Previous Year’s Sales x 100%

However, note that there are more industry-specific KPIs you will need to measure on top of these identified criteria. In order to do so, involve the departments concerned in drilling down the most important metrics relevant to their roles. They have the best understanding of their output vs. input.

Once you are able to determine which productivity metrics are most applicable to your business, it’s time to start delegating them to each of the concerned departments.

STEP 3: Develop your implementation plan

The accuracy of your productivity metrics depends on the employees. Getting the collective buy-in of the entire organization is as important as the first two strategically-inclined stages.

To implement your productivity metrics seamlessly, ensure that your teams understand the following:

• What are productivity metrics and how can the company benefit from it?
• What are your company’s SMART goals?
• What is their role in achieving the business goals?
• What data points do they need to pay closer attention to, as needed in computing for each metric?
• How will they provide the information they have collected? Is there a streamlined system where they can easily plug in the data?
• What happens afterwards? Are there quarterly or annual reports that will allow everyone to understand the value of the metrics they helped fulfill?

By providing employees with answers to their common questions, they will have a better understanding of what needs to be done, why it is being implemented, and how they are going to play their part in it.

It would be highly beneficial for the entire organization to adapt automated systems such as a time tracking software to accurately log time spent on projects and tasks, for example. These programs help preserve the precision of data, while making it convenient for your teams. Likewise, these systems can be integrated with each other. It creates a synchronized and unified workflow that reports reliable information for smarter decision-making and targeted strategies.

Conclusion

Productivity metrics can significantly impact any business, maintaining its profitability and competitive advantage. This can be achieved through using measures that will:

• Help identify loopholes in operations and address them appropriately
• Optimize the allocation of time, money, and other resources, avoiding losses and unnecessary expenses
• Magnify the areas that need support and improvement even before it disrupts the business
• Provide accurate and timely data on employee performance
• Increase customer satisfaction and retention

By first outlining your SMART business goals, identifying what you need to measure, and driving a cohesive implementation plan across the organization, you will be on the road to achieving or even exceeding your targets.

It’s time to get Productive.

Productively is a time tracker app that lets you elevate work efficiency with advanced time tracking, real-time reports, and powerful analytics. We believe that if you can manage your hours, you can handle everything else.

With a streamlined dashboard that lets you visualize time tracked by days, weeks, months, or even by client and project, you will be able to make more informed decisions based on accurate data. Its seamless invoicing feature allows you to automatically generate account statements for a more organized billing and receivables system. Altogether, it provides a comprehensive view of your teams’ efficiency, hours worked, billables, and profit.

Bolster productivity, reduce unnecessary costs, and improve the way you do business with the app that empowers you to visualize your untapped capacity.

Learn more about what we offer by signing up for a free demo.