The Ultimate Guide to Measuring & Assessing Employee Productivity

Are you productive during the workday? Most of us would like to think we are, but it’s hard to be sure unless you actually assess employee productivity.

We’re all guilty of having off days — or even unproductive stints within a single day. However, we usually make these judgments based on feeling.

That’s why employee productivity remains a buzzword in many office cultures.

Luckily, this guide will help to ensure productivity is accurately measured and rewarded.

But first, how do you actually define productivity for your team?

In its simplest form, productivity measures how quickly a person or machine can produce work or complete specific tasks.

According to SHRM, “Productivity can be defined as the relationship between the input of resources that result in the output of goods and services.”

Of course, productivity can’t really be understood from a simple definition. Understanding team productivity really only happens once you establish a method to track employee productivity.

To estimate future workloads and project budgets, you need to understand what your employees can produce.

Measuring productivity

To measure employee productivity, you need to be tracking tasks and the rate at which you complete them.

The most straightforward applications of productivity measurements are in production environments, where a machine is guaranteed to produce an exact number of outputs per hour.

Measuring human productivity is much more complicated. People are not machines and will never function at 100% productivity 100% of the time.

Metrics get even harder to define in service and creative roles. While a team may create logos or solve support tickets every day, there isn’t a one-size-fits-all solution for each task.

Luckily, there are tools that can help.

How Hubstaff can help with productivity

As a company grows, tracking performance indicators becomes increasingly urgent. Eyeballing productivity or using paper timesheets won’t work anymore.

One of our clients, LinkUp, illustrates this growth conundrum well:

As the LinkUp team began to do more work, take on additional clients, and grow their business, they noticed that they were having a hard time keeping up with all the variables.

It didn’t take long to realize they needed a better solution for organizing this information.

Ultimately, they settled on Hubstaff. We helped them build and track reports, improve their project management, and track time efficiently.

Why do great managers measure productivity? Because it gives them insight into their teams’ performance and helps develop team members into happier, more successful, and more engaged employees.

Managers with a productivity mindset organically create better growth opportunities for their organization and employees.

Employees who are encouraged to perform at their best have more job satisfaction. This then leads to increased employee retention rates— something that every business should strive for whenever possible.

However, concentrating too much on efficiency and micro-managing team members has the opposite outcome.

A healthy organization is one where employees want to be more productive, and managers want to work with them to help improve their productivity.

Let’s look at the common obstacles to productivity and the tactics you can implement to prevent them.

Obstacles to productivity

There are plenty of distractions that keep talented teams from being productive. Here are some specific productivity barriers that organizations of all sizes face:

• Poor communication of expectations. Leadership does not communicate what employees are supposed to do.

• Broken or redundant processes. A lack of project management and planning leaves people confused about the process.

• Overly complex workflows. Extra steps and approvals that aren’t needed slow down work and demoralize team members.

• Undefined workflows. Often, teams lack essential documentation about what is expected without project management.

If your team or organization encounters challenges like these, perhaps it's time to review workflow processes to find gaps and redundancies.

Positive ways to increase productivity

Focusing on the obstacles to productivity is helpful, but identifying those obstacles may not fix employee productivity. So far, you’ve only removed the bad.

What those obstacles get replaced with is up to you and your team.

Once you’ve begun to deal with productivity obstacles, you’ll also need to focus on positive methods for increasing productivity, like:

• Establishing effective team communication strategies. People cannot reach a goal that they can’t see. As a leader, it’s your job to establish effective team communication strategies.

• Celebrating wins. Some of your team members need a reason to get motivated. Respond to their hard work with celebration, not indifference. You’ll soon see the difference that reaction can spark.

• Rewarding autonomy. Leaders should constantly move their team members toward greater independence (with accountability). As employees take initiative and demonstrate strong decision-making skills, reward and recognize the results.

When executed correctly, you’ll motivate others to seek greater autonomy and free up more of your workload.

You won’t find one magic productivity formula for assessing productivity in your workplace. Each company (and sometimes even each team) will need to find the best approach to achieve results.

It would be too simplistic to boil down productivity to the number of calls made, hours worked, or tasks completed. While each of these labor productivity metrics are valuable at times, none of them are end-all, be-all productivity measurements.

So what’s the right way to define productivity for your business? What criteria should you consider when trying to assess productivity?

Let’s look at some productivity measurement examples.

Productivity vs. performance

Performance is a measurement of how well employees do the tasks and functions of their job. With some positions, you will be able to measure performance easily by the quantity of work they produce.

However, the quality of a team member’s contributions is more challenging to measure.

For example, a staff photographer may take thousands of photos, but only one or two may be worth editing and publishing. Performance considers how much high-quality work an employee can produce.

Performance metrics are not necessarily about the amount of time an employee spends on a project but an overall measure of individual employee output.

Productivity is another measurement of performance, and it’s less wide-ranging in scope. When we look at productivity, we’re talking about the rate at which the employee completes work.

But the more creative, complex, or intangible the work product becomes, the less apparent the measurement for productivity becomes.

Consider an in-house graphic designer. Somedays, they may be able to churn out eight pieces of art in one day. Other days, they may struggle to create one.

Which day was the designer more productive? That depends on the project scale, the quality of the designs, and the importance of their contribution.

The number of pieces produced is an obvious measure of productivity. Still, it doesn’t deal with how complex the pieces were or the graphic designer's other responsibilities that day.

Maybe they attended valuable client meetings all day and churned out that single piece at the end of their workday. Or perhaps that single piece was more complex and valuable than the eight pieces from the previous day combined.

Performance, compared to productivity, is a much more flexible way to measure employee output. It considers other work, the complexity of work, and the quality of the deliverables.

Efficiency vs. effectiveness

Efficiency is another business term that’s reached buzzword status. Management philosophies such as the Lean Six Sigma and the Toyota model elevate efficiency above all else.

But is efficiency the right way to think about the work that your business and employees do? Or is effectiveness a more dynamic way to think of productivity?

In his book Management: Tasks, Responsibilities, Practices, Peter Drucker says that “efficiency is concerned with doing things right. Effectiveness is doing the right things.”

We think that it’s important to look at the employee tasks and goals with effectiveness in mind, not just efficiency.

If employee focus doesn’t align with company goals, they aren’t working effectively — but that might fall on management too.

Many factors affect an employee’s efficiency — including personal productivity and the work environment. When you have a system to measure productivity, you can assess whether any changes you implement are working.

Task-focused vs. time-focused

Time clocked in and tasks completed are two dimensions of tracking an employee’s productivity. You can track employee time and tasks completed separately to have basic information about employee performance.

However, linking the two by specifically tracking how much time tasks take gives you more actionable insights into employee productivity.

Tracking the average task length also helps you better plan projects. When you know precisely how long the previous ten iterations of a task have taken, you can plan how long an employee will need for the next ten.

There is no single way to measure productivity that will work perfectly for every team or business.

You will need to choose the best method for your business — or a hybrid of these methods based on your existing company goals and objectives.

In some situations, one productivity measurement strategy may work for specific teams, while another measure makes more sense for another team in the organization.

That said, there are three primary methods for measuring and calculating productivity:

• Management by objectives

• Measuring quantitative productivity

• 360-degree feedback

Let’s look quickly at how each works.

Management by objectives

Using this method, productivity measurements will always relate to specific organizational goals. These measurements can be either quantitative or qualitative.

Taking an objective-based approach to productivity will help you track task completion alongside company or department goals. You can then use tools to record it as a percentage of these long-term goals.

This performance management method is often criticized and has fallen out of favor. Critics point out that this form can frequently increase hostility and even distrust between managers and employees.

Setting realistic, achievable goals and objectives is critical. When employees are held to productivity metrics they don’t believe are humanly possible, they tend to experience burnout and become even less productive.

If you use this method, realize that you’ll need other tactics to motivate your team as well.

Measuring quantitative productivity

In contrast to the first option, measuring quantitative productivity seems simpler and more direct. This method always results in measurable or quantitative figures like the number of tasks completed or total output in a workday.

There are numerous pros to this method when it works. It’s easier to:

• Compare co-workers

• Track progress over time

• Set project budgets

It’s also eminently objective — at least it looks that way on the surface. With everything else being equal, an employee who outputs 15 deliverables is more productive than one who outputs 12.

We’ve already discussed this method's primary dangers and limitations: the more complex and varied your deliverables, the less effective it is to count how many items people complete.

This method also doesn’t directly deal with time management. It can show you who is getting more tasks done, but it doesn’t show you what tasks people are focusing on.

360-degree feedback

One of the more progressive productivity measurement techniques is 360-degree feedback.

There are a few different versions of this concept, but here’s the rough idea: in 360-degree feedback, an individual receives anonymous feedback from a handful of co-workers, their manager, and direct reports.

Depending on the system used, the employee receiving feedback can respond to each participant.

In some versions of 360-degree feedback, the manager’s feedback is not anonymous, and the employee is encouraged to respond with their feedback regarding the manager’s performance.

360-degree feedback can be a great way to learn what co-workers think and lead to positive changes. However, it can be a flawed tool for measuring actual productivity because it’s opinion-based.

Take care to design questions to lead to more objective answers about real productivity. You don’t want 360-degree feedback to devolve into bullying.

Whichever method or combination of methods you choose, you’ll still need to take the time to apply what you’ve learned and build an assessment process.

Use these ten steps to help you build an employee productivity assessment method that achieves the best outcomes for your organization.

Step 1: Define baseline goals

Start by defining baseline goals so that you and your employees have a clear direction. No one can achieve a goal that does not exist.

Before you get any further in the process, take the time to identify benchmarks and targets that people should strive for. Take all data you have on current performance into account during this step.

Step 2: Communicate goals and expectations

If you poll your team, you'll likely find various opinions on ideal productivity levels. Your team needs to know the goals and expectations for both individuals and teams.

Step 3: Track task-oriented goals

Next, begin tracking task-oriented goals. A high-quality project management tool will include time tracking and task reporting. These features give your teams reporting features to know exactly what’s happening.

Step 4: Track personal growth

Progress in productivity isn’t just about tasks. Personal growth matters, too.

Track progress toward personal goals like reading work-related books, improving on time management, creating a healthier work environment, etc.

Step 5: Solicit feedback

For employees who interact with clients or customers, you can seek feedback directly from the source. This shouldn’t serve as your only source, but it can be a valuable one.

For non-customer-facing roles, you can get feedback from co-workers or team leads.

Step 6: Check-in frequently

Be present with your teams and check-in frequently on progress. Don’t create an environment of excessive pressure, but be encouraging and reward progress.

People tend to be more productive when they know someone is paying attention. However, be aware that you are not wasting your time holding too many meetings.

Step 7: Consider employee engagement

Consider whether employee engagement needs attention — especially with employees who aren't meeting goals.

Ask important questions like, is the person a cultural fit? Do they enjoy the company? The work? The specific role?

Step 8: View progress over time

Don’t just compare employee performance with the next team member. Consider the trajectory of each individual. Ask yourself:

• Is this person making significant or even steady progress since the last check-in?

• Is this person declining instead?

• Is this person committed to improving?

Step 9: Assess the whole picture

Make sure to consider an employee’s entire skillset. Even if employee productivity is low in one area, it may be high in another. If they’re struggling in a core job function but excelling in other areas, perhaps they aren’t in the right role.

Step 10: Provide actionable feedback

Always make sure your feedback is actionable. Employee growth requires clear objectives provided to employees during reviews.

People don’t know how to simply “be better” or “do more.” Give them tangible, actionable steps they can take to improve.

Using Hubstaff to measure productivity

Assessing employee productivity is crucial for any organization that wants to continue growing, improving, and investing in its people.

Hubstaff was designed with productivity measurement in mind. Our time tracking software, reporting, and built-in efficiency tools help teams work smarter.

Ultimately, measuring company productivity is only a means to an end. Your goal is to use employee productivity to grow and better your team members so that they can do the same for your company.

The real goal is happier, healthier people that feel the value they receive is equal to the value they put in each day.