When you google “how to improve productivity in an organization,” you’ll find numerous articles promising that if you apply these 10 random productivity hacks, you’ll unlock workplace productivity.
But it’s often unclear how these tips relate to each other and combine to move the needle on productivity organization-wide.
In this article, we’re taking a different approach. We’ll start by defining organizational productivity and how to measure it, and then provide best practices for HR and leaders to create a culture of productivity. And, we’ll hook you up with real-world examples to help you get started.
What Is Productivity And Why Should You Measure It?
One of the reasons that productivity can be so elusive for an organization is a lack of consensus on what makes an organization productive.
In a factory setting, you can measure productivity based on how much of something workers can produce within a defined amount of time. But in a knowledge economy, where workers typically produce services rather than products, it’s less straightforward.
One option is to calculate business productivity as revenue generated based on the number of hours worked. The more money you make in less time, the more productive you are.
While a logical metric for an organization, this type of measurement can be difficult to translate at the employee level because a knowledge worker typically assesses personal productivity based on the number of tasks they check off of their to-do list. But, for an organization to consider that worker productive, the items on that list must generate value for the business.
If we define productivity as a way to optimize revenue, you can understand why organizations would be keen to measure it. Increasing revenue (and therefore increasing productivity) is a sign of a healthy, growing business.
How To Measure Productivity
When you’re considering how to measure productivity at your organization, focus on outputs that help you achieve company goals.
Depending on the nature of your business, examples of metrics might include revenue, customer satisfaction, or time to production.
Determine what you’re going to track
The first step is to determine what you’re going to track and, more importantly, why it matters to track it. How does your chosen productivity metric relate to business goals?
To make sure your productivity metrics aren’t simply a shot in the dark, work with business leaders to establish a clear goal-setting process.
This process should align departments on desired objectives and how they’ll assess progress against those objectives.
Employees can then see how the work they do on a daily basis connects to the mission and supports key milestones.
Devise a method for tracking metrics
One common mistake when setting OKRs is to choose key results that are too difficult to measure.
For example, if your stated objective is to track customer satisfaction, but assessing it requires you to synthesize data points across multiple sources of input, then you may not be ready for a key result in this area. Your time would be better spent cleaning up disparate data sources to streamline the data collection process.
Aligning with cross-functional stakeholders might include developing and documenting a metrics glossary. Think of this as a data dictionary that orients stakeholders to a common definition of what you’re trying to measure and where the data comes from. For example, who counts as a user or subscriber? What’s the time period you’ll use to measure engagement?
Although creating a glossary can be a lot of work, I’ve seen organizations achieve better productivity as a result.
That’s because the more time your team spends on measuring, the less time they have available to work towards business goals. Doing the legwork upfront to clean and organize your data and agree upon common definitions pays dividends in the long run.
Analyze the data and use it to determine potential methods for improvement
As you track results quarter over quarter, use the data you’ve collected to help you figure out areas of improvement and optimize your processes.
You can experiment and test hypotheses on a small scale and, if your tests are successful, ramp up to apply the process change organization-wide.
For example, in a recent study, the use of generative AI improved knowledge worker productivity by as much as 35% for entry-level and novice employees.
How To Improve Productivity In Your Organization
Some organizations may be tempted to assess employee productivity based on the amount of time they work each week or how busy they appear to be (e.g. how many hours they show up at an office, or what after-hours work events they attend).
We saw this when many knowledge workers transitioned to remote work during the COVID-19 pandemic. Leaders could no longer take attendance to measure output, and the debate on how to define and measure employee productivity resurfaced with a vengeance.
But does it matter how many hours employees work so long as they’re driving value? Is it even possible to work productively for 8 hours per day?
IMHO—probably not. Contrast a factory worker making widgets with a product designer.
If you assess the designer based on the number of designs they produce during the workday, but none of these designs are good, then you’re missing the mark. It only takes one winning design for an organization to surpass its competitors.
But how can you predict how efficient team members are at completing their tasks? What’s the difference between a superstar team member and an average performer? How do you create a healthy company culture that unlocks the superstar potential within your workforce?
Here are some tips for how HR and leaders can create a work environment that ensures productivity across your teams (hint: motivation is key!).
Ensure clarity, responsibility, and accountability
Define clear roles and responsibilities so it’s clear what the priorities are and who’s responsible and accountable for what. This includes crafting thoughtful job descriptions when hiring for new roles, working to ensure the hiring process itself is as equitable as possible, and creating career paths for existing roles so employees understand what it takes to perform well and advance in the organization. For advice here, check out The CRA of Leadership.
Show employees that what they do matters
Team members will quickly become disheartened if they think their work is in vain. On the flip side, if they can see how their daily tasks contribute to the bigger picture of what the organization is trying to achieve, they’ll be more motivated to perform each day. Goal setting using OKRs is an effective method to achieve this.
Foster employee well-being
It almost goes without saying that ensuring mental and physical well-being through time off, dependent leave, wellness benefits, etc. will help ensure team members are working at their full potential and help prevent burnout.
Further, research shows that employees crave intellectually stimulating work as well as the freedom to choose how to execute that work. Think about it: if you knew that you had no control over the work you were being asked to do, why would you worry about doing it better?
Cultivating a productive work environment also means removing potential impediments to success and optimizing systems.
HR teams can create guidelines for how employees should use an organization’s technology stack (e.g., email or Slack) to limit context switching and use surveys to determine if people have the tools and resources they need to work effectively. They can also create and maintain an information repository to support employee onboarding and minimize time spent on information retrieval.
Recognize your team
Recognition doesn’t only mean monetary rewards—although appropriate compensation certainly helps! Recognition also encompasses opportunities for career growth, performance awards, or even a simple shout-out for a job well done. Here are some great employee recognition ideas.
Lastly, it’s nearly impossible to strengthen employee engagement and minimize the risk of burnout without middle managers.
Managers transform executive priorities into operational plans and ensure alignment at the working level. They’re also key to team development and retention.
And, you can’t have effective middle managers without appropriate training. HR is critical to help your organization craft a strong training program for line managers so they can practice effective communication and grow into successful business leaders.
Case Study: Improving Employee Productivity
There’s a lot you can do to improve employee productivity, even if you’re not part of the C-suite.
Back in my strategy consulting days, I led a team of 15 people and focused relentlessly on employee engagement. Across a 200-person pyramid, my team earned >50% of promotions.
Here’s what made my team successful:
- I instituted a monthly motivation survey to get a pulse on employee engagement and leadership satisfaction and reviewed the anonymized results with the team monthly to: 1) normalize getting feedback and 2) shorten the feedback loop for learning and action.
- I prepared a weekly shout-outs email to recognize team members for their accomplishments and copied the entire leadership team. I made sure to celebrate high-quality work and also instances where team members were delegating tasks, supporting each other, and caring for their mental well-being.
- I established regular weekly check-ins with each of my direct reports to understand their concerns, coach them to improve employee performance, and build trust.
Employees felt supported without micromanaging, and they had an incentive to perform better because they felt that their contributions mattered.
Join The Conversation
How has your organization implemented strategies to boost productivity? What challenges have you encountered along the way?
Let us know in the comments, or join us in the People Managing People community, a supportive network of HR and business leaders passionate about building organizations of the future.
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