How to Increase Employee Productivity

I've never been the type of leader who looks to continuously add more and more resources, whether it be equipment, tools, or employees. I've always looked to maximize the talent of employees mostly because I have sought to help people tap into their full potential as a person and as an employee. In addition, from a financial standpoint, I've always thought about how much money is wasted unnecessarily when people in leadership positions look to continuously add resources as their go-to-strategy instead of working on increasing employee productivity.

I fully understand that when financial times are good, many companies have no focus on productivity because we often look at the good times as never-ending. Until the situation rapidly changes, like what has been seen across the globe over the last 18 months. When business leaders are not focused on maximizing the talent and potential of employees, they are setting themselves and the employees up for failure. In a Business Insider article from March 13, 2023, Thomas Siebel, the billionaire CEO of C3.ai, noted the "craziness" has finally gone out of the market when it comes to over-hiring at companies like Meta and Google.

"This whole thing just has to clear itself out," Siebel told Insider, saying that it's "weird" that Google and Meta hired employees when they "didn't have jobs for these people." "They really were doing nothing working from home," said Siebel,

Companies like Meta and Google went on hiring sprees during the onset of the pandemic, but in more recent months the companies have laid off tens of thousands of workers amid fears of a recession.

The phrase "doing more with less" has been tossed around significantly lately, which is not surprising as you typically hear it being used during economic downturns or times of resource constraints. It is during these challenging times, such as what we have been experiencing over the last 12-18 months, that organizations often face a hiring freeze and must find ways to increase efficiency with existing resources. Ultimately, it is about a business trying to increase the employee's productivity. However, what they should be doing is maximizing the talent of the employees, not looking for ways to have them do more work.

The question that comes up is: How do I create productive employees? The answer to that can lead to massive business success.

Understanding Employee Productivity

Before diving into figuring out how to improve productivity, we should probably get a handle on what employee productivity means. Employee productivity measures how successfully employees utilize their time, skills, and resources to accomplish objectives. It can be quantified by measuring output factors like revenue, customer satisfaction, error rate, or tasks completed per hour. High productivity means achieving maximum output with minimum wasted effort or expense.

For any business leaders and organizations, the ability to increase productivity is crucial to accelerate growth, offset costs, and increase profitability. It empowers you to do more with existing resources. Employees also benefit from higher productivity through greater accomplishment, rewards, and career progression - creating mutual value for all stakeholders.

For most business leaders or managers, the question that will arise first is, "How do I measure employee productivity?" Let's find out.

Key Metrics for Tracking Productivity

The best ways to measure employee productivity are diverse and can depend on the specific context of a workplace. However, some universally recognized methods are:

Key Performance Indicators (KPIs):

KPIs are specific, quantifiable measurements that relate directly to the organization's goals. They can be individual or team-based and often vary by department or role.

Objectives and Key Results (OKRs):

This method involves setting clear, measurable objectives and tracking outcomes to assess progress. OKRs encourage setting ambitious goals and tracking their completion in a quantifiable manner.

Management by Objectives (MBO):

In MBO, managers and employees set specific objectives together and then periodically review the performance. This method aligns individual objectives with company goals and focuses on results rather than activities.

Productivity Insights Tools:

Modern digital tools provide real-time insights into employee productivity. They can track various aspects such as task duration, output quality, and overall efficiency. While implementing these tools may raise concerns about trust levels with employees, they can be a viable option for certain companies.

Task Tracking:

Monitoring the tasks assigned to employees and their completion rate is a straightforward way to gauge productivity. This method focuses on the quantity and quality of tasks completed and can be particularly useful in project-based environments.

Common Quantitative Metrics

Understanding what aspect of your company you would like to increase productivity is extremely important. Without knowing where you would like to improve employee productivity, how can you put the right strategy in place?

Revenue per Employee:

This metric indicates the amount of revenue generated by each employee in an organization. It's calculated by dividing the total revenue by the total number of employees. It's a useful gauge of employee productivity and the overall efficiency of the organization.

Labor Cost Percentage:

This metric measures the proportion of total revenue that goes towards paying employee salaries and benefits. It is calculated by dividing total labor costs by total revenue and multiplying by 100. A lower percentage indicates more efficient use of labor relative to revenue generation.

Profit per Employee:

This metric assesses the average profit generated by each employee. It is calculated by dividing the total profit by the total number of employees. A higher value suggests greater efficiency and productivity of the workforce.

Billable Hours:

In service-oriented businesses, billable hours refer to the amount of work time that can be charged to clients. This is measured by tracking the time employees spend on client-specific tasks. It's a key metric for professional services firms, indicating revenue-earning efficiency.

Project Velocity:

This metric is often used in project management to measure the speed at which a team completes work items or tasks in a given time frame, typically measured in story points or similar units. It's calculated by dividing the number of units of work completed by the time taken to complete them.

Measuring Employee Productivity Qualitatively

Can I measure employee productivity qualitatively? Great question! While it is definitely easier to measure productivity quantitatively, the greatest impact within a company will occur when quality is being measured. Let me provide you with an example so you can better understand.

In my prior role, I was the director of an outpatient, orthopedic clinic that employed physical therapists, medical doctors, chiropractors, occupational therapists, and acupuncturists. Part of evaluating the providers was to look at how many patients they see per week, month, etc., what was their cancellation rate, what was their retention rate, what was their discharge rate, among other things.

However, what I never used to measure was the quality of their sessions. For instance, we could assess that a chiropractor performs 125 sessions per week. What we didn't assess at that point was, what was quality of their patient education, how good was their ability to diagnose correctly, how good were their spinal adjustments, whether they were progressing patients, etc. For the most part, we weren't measuring the most important aspects of patient care.

Measuring employee productivity using qualitative information involves assessing aspects of their performance that aren't easily quantified by numbers but are clearly equally, if not more, important. Here's how you can approach this:

Observations:

Regularly observe how employees handle their tasks, interact with team members, and approach challenges. Note their problem-solving skills, creativity, and ability to work under pressure.

Interviews and One-on-Ones:

Conduct interviews or one-on-one meetings with employees to understand their perspectives on work, the challenges they face, and their self-assessment of their performance.

Surveys and Feedback Forms:

Utilize surveys or feedback forms to gather insights from other employees, managers, or even clients about the individual's performance. This can include questions about teamwork, communication skills, and leadership qualities.

Focus Groups:

Organize focus group discussions where teams can openly discuss projects and individual contributions. This can provide valuable insights into how an employee collaborates and contributes to team objectives.

Self-Reports:

Encourage employees to self-report their achievements, challenges, and learnings. This not only provides qualitative data but also encourages self-reflection and personal development.

360-Degree Feedback:

Implement a 360-degree feedback system where employees receive anonymous feedback from their peers, subordinates, and supervisors. This offers a comprehensive view of their strengths and areas for improvement.

Performance Reviews:

Use regular performance reviews to discuss and evaluate an employee's contributions, work ethic, attitude, and growth.

Remember, qualitative assessment requires a nuanced approach and an understanding that productivity is not just about output but also about the quality of work, teamwork, creativity, and adaptability.

The Role of HR in Boosting Productivity

Human Resources (HR) plays a crucial role in enhancing employee productivity within an organization. This involvement ranges from creating positive and engaging work environments to implementing strategic initiatives for talent development and retention.

By setting clear objectives, managing benchmarks, and tracking productivity metrics, HR helps align individual goals with the company's broader objectives, driving overall productivity. Additionally, through initiatives like regular goal tracking, HR ensures that employees have clear targets and the motivation to work towards them passionately, which significantly contributes to enhancing overall productivity in the workplace. HR's role includes:

Designing Fair Compensation Programs That Incentivize Results:

This involves creating salary and benefits packages that are equitable and competitive, and also link rewards to performance outcomes. Such programs motivate employees to achieve specific results, aligning their goals with organizational objectives.

Providing Learning Opportunities to Enhance Efficiency:

Offering training and development programs helps employees acquire new skills and knowledge, enhancing their efficiency and productivity. Continuous learning opportunities also keep the workforce up-to-date with industry trends and technologies.

Tracking Productivity Metrics and Analyzing Trends:

This includes measuring various productivity indicators such as output, quality, and efficiency. By analyzing these metrics over time, organizations can identify trends and areas for improvement, enabling them to make informed decisions about workforce management.

Identifying Low Performers for Targeted Coaching:

By recognizing employees who are underperforming, organizations can provide them with specific coaching or training to improve their skills and performance. This targeted approach helps in addressing performance gaps effectively.

Fostering Positive, Engaging Work Cultures:

Creating a work environment that is positive, inclusive, and engaging is essential for employee satisfaction and retention. A positive culture encourages collaboration, innovation, and a sense of belonging among employees.

Promoting Open Communication, Recognition, and Growth:

Encouraging open and transparent communication within the organization fosters trust and collaboration. Recognizing employee achievements and providing opportunities for career growth are also crucial for maintaining high levels of employee engagement and motivation.

While the role of HR with regard to employee productivity is quite significant, who is responsible for carrying out the day-to-day actions? Also, what if you don't have a Human Resources department or you don't have a high-functioning HR department? For those of you in leadership positions, I'm looking at you.

How Your Leadership Affects Employee Productivity

Author Liz Wiseman's book, Multipliers, discusses the negative or positive effect that leadership can have on the productivity levels of employees. "Doing more with less" is about leaders utilizing the talent and potential of their existing workforce more effectively, rather than relying on increasing headcount or resources.

The key lies in how leaders view and manage their teams. Wiseman suggests that by adopting certain leadership behaviors and mindsets, which she refers to as "Multiplier" behaviors, leaders can encourage their teams to achieve extraordinary results. This involves seeing and exploiting the hidden potential in employees, challenging them to stretch their abilities, and fostering an environment where innovative solutions to problems are encouraged. The goal is to create a culture where employees are motivated and committed to doing meaningful work, thereby increasing productivity and performance even with fewer resources.

I mentioned earlier that I felt that my leadership should be the biggest driver of employee engagement. Therefore, when I started evaluating employee engagement within the company and saw how poor it was, I had no choice but to look myself in the mirror in order to see where I needed to make adjustments to my leadership style. What I realized is that I had many toxic behaviors that were severely limiting and impeding the employees. In addition, I had, what Liz Wiseman would call, many diminishing behaviors.

Effective leadership plays a pivotal role in improving employee engagement. Leaders are responsible for setting the tone and direction of the organization, which significantly influences the work environment, culture, and overall morale. Here are key aspects of how leadership impacts employee engagement:

Building Trust:

Effective leaders foster trust within their teams by consistently demonstrating integrity, transparency, and open communication. This creates a sense of security and belonging among team members, enabling them to collaborate more effectively and contribute their best work. Trust serves as the foundation of a positive work environment, where employees not only feel valued and supported, but also empowered to take risks, share ideas, and innovate.

Providing Support and Feedback:

Good leaders understand the paramount importance of consistently supporting their employees, offering timely and constructive feedback, and wholeheartedly recognizing their hard work and accomplishments. This approach not only serves as a powerful motivator for employees, but also fosters an environment that encourages their professional and personal growth. By providing a nurturing and empowering atmosphere, leaders can inspire their team members to reach new heights and unlock their full potential.

Keeping Teams Inspired and Informed:

Especially during challenging times, effective leaders play a crucial role in keeping teams motivated, engaged, and focused on achieving collective goals. They understand the importance of clear communication and ensure that employees are well-informed, empowered, and aligned with the organization's strategic objectives. By fostering a positive work environment and providing support, leaders inspire their teams to overcome obstacles, adapt to change, and drive success even in the face of adversity.

Prioritizing Organizational Health and Well-being:

Leaders who prioritize the health and well-being of their employees contribute significantly to fostering a positive and engaging workplace environment. They understand the importance of promoting work-life balance by implementing flexible schedules, wellness programs, and encouraging employees to take time off when needed. Additionally, they actively listen to employee concerns and address them effectively, creating a supportive and inclusive work culture where everyone feels valued and supported.

Setting the Organizational Culture:

The actions and behaviors of leaders play a pivotal role in setting the precedent for the overall organizational culture. When leaders are committed to fostering a positive, inclusive, and collaborative culture, it creates an environment that encourages high levels of employee engagement, productivity, and satisfaction. By promoting open communication, valuing diverse perspectives, and empowering employees, leaders can effectively cultivate a culture that inspires innovation, teamwork, and continuous growth.

Now we need to assess if you have the leadership skills necessary to maximize the talent and productivity of your employees.

How Can I Assess My Leadership Skills?

Being fully aware of your leadership skills is necessary to create a positive impact on employee engagement. Here are a few ways you can assess your leadership and identify areas for improvement:

Self-Awareness:

Self-awareness refers to the ability of an individual to understand their own emotions, strengths, weaknesses, values, and drivers. It involves a high level of introspection and the ability to recognize how one's actions and emotions impact others.

Only when I started to evaluate my actions, words, and emotions did I start to realize how negative of an impact I was creating for the rest of the employees. Identifying areas of improvement was the single greatest action I took as I looked to improve my own skills and employee productivity.

360-Degree Feedback:

Gather feedback from various sources, including peers, subordinates, and supervisors. This method provides a well-rounded view of your leadership skills from different perspectives.

Asking for feedback from your team members is a crucial step in assessing your leadership. Actively listen to their perspectives, concerns, and suggestions for improvement.

Assessments:

1. MindTools Leadership Skills Assessment: This tool helps in assessing various aspects of leadership skills and identifies areas for development.

2. IHHP Emotional Intelligence (EQ) and Leadership Assessment: This tool evaluates emotional intelligence, a crucial component of effective leadership.

3. DISC Profile: DISC is a behavior assessment tool that focuses on four different personality traits: Dominance, Influence, Steadiness, and Conscientiousness. It's useful for understanding an individual’s behavior in team settings.

4. MindTools Leadership Style Quiz: This quiz helps you identify the leadership style you naturally lean toward and introduces you to alternative approaches that might be helpful for your personal development.

5. Leadership Styles Assessment Test: This type of assessment can help you understand your predominant leadership style, including whether you tend toward a transformative approach.

6. Leadership Style Test from Indeed: Offers an overview of different leadership styles and helps you determine which one aligns with your approach.

7. Myers-Briggs Type Indicator (MBTI): Although not specifically a leadership tool, MBTI can give insights into the personality traits that affect your leadership style.

What Other Business Productivity Factors Have an Effect?

Beyond measurement, there are several business productivity factors that affect each company. Knowing what factors affect employee productivity is crucial:

Collaborative Goal-Setting:

Involves employees in the goal-setting process, ensuring their personal and professional aspirations align with organizational objectives. This approach fosters a sense of ownership and commitment towards achieving these goals.

Job Enrichment:

Enhances job roles to make them more fulfilling and engaging. This can include adding variety, increasing responsibility, or providing opportunities for personal growth, leading to increased job satisfaction and productivity.

Incentives and Rewards:

Implementing a system where employees are rewarded for meeting or exceeding performance standards. Incentives can be monetary, such as bonuses, or non-monetary, such as extra vacation days, contributing to increased motivation and productivity.

Public Recognition:

Acknowledging and celebrating employees' achievements in a public setting. Recognition from management and peers can boost morale and motivate employees to maintain or improve their performance.

Constructive Feedback:

Providing regular, constructive feedback helps employees understand their performance and areas for improvement. It guides them in the right direction and encourages continuous development.

Promoting Work-Life Balance:

Encouraging a balance between work and personal life helps reduce burnout and stress. Flexible working hours, remote work options, and respecting off-hours contribute to a happier, more productive workforce.

Learning and Development:

Offering opportunities for professional development, such as training programs, workshops, and continuous learning paths. This not only enhances employees' skill sets but also keeps them engaged and motivated.

Empowering Staff with Autonomy:

Giving employees the freedom to make decisions about their work processes and methods. Autonomy fosters innovation and creativity, leading to higher job satisfaction and productivity.

Conclusion:

As leaders, it's essential to continually assess our leadership skills and strive towards creating a positive impact on employee engagement. By fostering a culture of self-awareness, actively seeking feedback, and utilizing various assessment tools, we can identify areas for improvement and enhance our leadership skills.

Along with these efforts, implementing initiatives such as collaborative goal-setting, job enrichment, incentives and rewards, public recognition, constructive feedback, promoting work-life balance, learning and development opportunities, and empowering staff with autonomy are crucial in creating a productive and motivated workforce. It's only by continually evaluating our leadership skills and implementing strategies to improve them that we can drive employee productivity and contribute to the success of our organizations.