Measuring and improving employee productivity is a hot topic for hybrid and remote managers. It was also lively discussed at our NAVIT "Back-to-Office" panel on 16 November. We've put together a full overview of employee productivity and how HR managers can improve the productivity of their teams.
Employee productivity is the measure of how effectively a person fulfils a task. It refers to the relationship between the output (goods and services) a company produces and the input (e.g. labour, capital, energy or other resources) used to provide them.
Productivity is a priority for companies for three main reasons.
Therefore, companies are often looking to improve their productivity by optimising their processes, investing in new technology and equipment, and providing training and development opportunities for their employees. And so it's no surprise that managers can become frustrated when productivity drops.
A loss of employee productivity can have serious consequences, such as the inability to deliver to customers. Maximising employee productivity is therefore everyone's responsibility, from junior team members to C-level executives.
Organisations usually set expectations for employee productivity and employees are expected to complete a certain amount of work within a certain amount of time. Examples of this are:
However, real measurement is often difficult.
Productivity has always been difficult to measure as it has traditionally been based either on self-assessment (asking employees if they feel productive) or on employee activity data, such as the number of emails sent or lines of code written. Neither of these is particularly meaningful.
What's more, these metrics can be subjective. Microsoft reports, for example, that while 87 per cent of employees say they are productive when working in a hybrid working environment, 85 per cent of managers believe the opposite. Microsoft refers to this discrepancy as "productivity paranoia".
Below are six ways to measure productivity
One common method of measuring productivity is time tracking. Desktop apps record minute by minute what employees are doing and whether this is productive. Employees can also allocate time to different projects.
Companies can set OKRs or KPIs for the entire organisation and have each employee set and meet specific targets. The level of detail is less than the software model, but it allows companies to track productivity in terms of the number of goals achieved and improve alignment with the organisation's priorities. One drawback is that setting and tracking goals can take a long time.
A more reactive way is to analyse the actual time spent using reports. Creative agencies and law firms usually take this approach. Employees are asked to submit reports on their time spent. Management can see how many hours are worked and what the time is spent on.
Remote and hybrid-orientated companies could take an example from software development teams. In these teams, the workload is clearly defined and the individual employees assign "story points" to each task, indicating how long they are likely to need. When the work starts, management has an insight into whether the tasks are being completed on time and whether the teams are therefore as productive as expected.
How well employees collaborate and communicate with each other can be tracked. This can include measuring response times to emails and messages, tracking the number of meetings attended or using tools such as Slack or Microsoft Teams to monitor team communication. Of course, absences and sick leave need to be taken into account here.
Going back to how productivity is usually measured: It always helps to encourage employees to give feedback on their own productivity and that of their colleagues. These qualitative statements can provide valuable insights into the way work is done and help to identify areas for improvement.
Improving employee productivity can be achieved in two ways:
Any improvement that the team strives for should fulfil one of these two requirements, otherwise it may miss its target.
In the age of hybrid and remote work, team members work differently than they used to. They utilise the flexibility of working from home and may work different hours than in an office environment, depending on when they feel productive. This is to be expected and should be welcomed. In short, you let employees be productive as they see fit and focus on the bottom line rather than the 8-hour workday that organisations are used to.
Ask yourself and your leadership team: "What does productivity mean to us?"
Lisa Rieh from Babbel explained it this way at the NAVIT "Back-to-Office" panel:
"For me, productivity is the most tangible result of one's work. Employees may feel more productive working from home as they can concentrate better there. At the same time, they should be able to go into the office to work on something important and also be able to help their team mates achieve their goals. In this way, I want to encourage teams to understand why they come to the office."
The subjective measurement of productivity by managers has outlived its usefulness. A completely different management and leadership style is needed on the way to a hybrid working world. A style that focusses on communication and in which managers continuously hold discussions with employees and obtain feedback from them.
What matters is whether someone is doing their job effectively or not. The team goal should be aligned with the organisation's (annual or quarterly) goals. It should then be clearly articulated how individual team members are expected to achieve these goals and how their progress will be measured. The most important thing here is regular and transparent communication.
As mentioned earlier, regular check-ins are especially important when team members are working from home. Even if priorities are aligned at first, things tend to drift over time. It is therefore advisable to hold weekly meetings at the beginning of the week to prioritise the week ahead. Short daily check-ins to see who is stuck and who can use help are supportive.
Goals can be very transactional and not align with internal motivation. Therefore, the importance of continuously communicating the organisation's mission and vision should not be overlooked. It also comes down to the leadership team, whose "main role is to have a vision, achieve results and develop themselves and others", as Meg Telson from GetYourGuide pointed out at the NAVIT panel.
For hybrid teams to be successful, however, it is crucial to promote and live a shared corporate culture so that employees identify with and feel connected to the company. The valuable, shared experience of coming together in the office should not be overlooked.
Eric Grieben from Lendis compares the importance of a corporate culture with being a fan of a football team. This is how he described it at the NAVIT "Back-to-Office" panel:
"You can be a football fan of a club without living in the city. I was in the stadium once and I always tell my friends and colleagues about that incredible day. I really believe that it's a moment when you come together and celebrate something that you can cherish. You can't replace that with just any video meeting."
Especially in times of micro-productivity, managers should be careful with meetings. Meetings can be a productivity killer. A meeting that interrupts the daily routine can be very disruptive and very expensive.
Shopify made headlines in early 2023 for eliminating the majority of its meetings, removing around 10,000 calendar events from employee calendars and saving around 320,000 hours of meetings. It is doubtful whether the move to cancel all recurring meetings without exception is the one-size-fits-all solution. Above all, it is crucial that meetings have a clear intention, a clear format, an agenda and summarised meeting notes in order to conduct meetings as effectively as possible.
Hybrid working describes a spectrum of locations and working styles.Therefore, organisations should look at workspace options beyond the home or office.Just because employees can't concentrate at home doesn't mean they want to visit the office.
"Back-to-office" does not necessarily mean a productivity gain if employees spend a significant part of the day commuting to the office to take part in Zoom calls that they can also do from home. Julia Carloff-Winkelmann from Dance suggests "giving employees the freedom and flexibility to choose where they want to be productive. This can be from home or from a coworking space."
Bringing employees back to the office requires the creation of a pleasant office environment, an environment in which employees can feel comfortable and in which they know that there are good reasons to work here, for example because they can collaborate with others in person.
