Employee productivity seems like a simple concept. It's the amount of work someone produces within a set period. For example, if employees on a manufacturing line produce widgets, you might measure worker productivity as widgets per hour per person.
Increasing employee productivity has been a top concern for many businesses for decades. But it's not always easy to do. Find out more about why productivity is important, why it can be hard to move the needle and what strategies you can bring to your organisation to improve productivity.
why is worker productivity important?
The more output you can drive in a similar timeframe, the more effective your organisation can be in the market. What the exact metrics depend on your company, but increased productivity can lead to more units to sell, more efficient services or the ability to charge more.
The benefits on a national scale are that the economy produces many more goods without the same increase in work. That supports higher consumption and a better ability to export.
The benefits are similar on a smaller scale, such as the business level. Businesses that produce more can drive increased revenues. Those that produce more with fewer hours worked drive better profit margins. Both of those things have a positive effect on stability and growth.
At a worker level, benefits of higher productivity can include the satisfaction of meeting goals and quotas, potentially more happiness with the job and an increased chance at raises, promotions or other aspects of personal career growth.
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worker productivity trends
According to the Bureau of Labor Statistics, increases in productivity in the United States over the past 50-70 years have led to an exponential growth of outputs without a similar growth in hours worked. For example, from 1947 to 2013, outputs for the nation increased by a factor of nine while hours worked didn't even increase by a factor of two.
This trend is not the same for all other nations. From 1972 to 2019, for example, the UK has experienced a fluctuating productivity growth metric with no real change overall. In Australia, labour productivity has trended down from 1996 to 2020.
UK HR experts and others have named this lack of growth in some countries the productivity puzzle.
The productivity puzzle refers to the question of why global productivity growth has declined ever since the Global Financial Crisis in 2008. Economists and other experts have, of course, put forward theories, and they've also argued whether this puzzle of productivity is one that needs to be addressed.
One theory is that the low hanging fruit has all been picked when it comes to productivity. During much of the last century, industrial and computer revolutions spurred productivity growth. Management changes and programs, including concepts such as Lean Manufacturing and Six Sigma, did the same. Some experts hypothesise that those types of wins have been almost maximised.
Other theories include that people returning to the labour market following job losses in the 2008 financial crisis aren't as motivated or that productivity isn't being counted in a way that's appropriate for modern markets.
And while theoretical ideas are all well and good in the larger contexts of global economies, when it comes down to your business, you need actionable concepts for dealing with issues of productivity.
3 strategies for increasing employee productivity
Whether you've noticed a decline in productivity that's hurting your bottom line or you want to scale up to meet future demands, here are three strategies you might try.
1. remove micromanagement from your processes
A study in the UK asked senior HR professionals in the UK what issues were reducing employee productivity. Micromanagement was in the top five, with 28% of HR pros noting it as an issue.
Another survey asked employees about why they left their jobs, and 55% cited poor management. Micromanagement, along with bullying or other aggressive behaviour, were some of the examples employees gave of poor management.
It's not an issue unique to the UK. Almost 60% of workers in a U.S. survey said they had worked for micromanagers, and almost 70% said it decreased their morale. More than half said micromanagement impeded their productivity. A separate study originally published by the Journal of Experimental Psychology found that often, workers who are being watched are less productive than people who are not being closely monitored.
Here are some tips for removing micromanagement from processes in industries such as manufacturing, automotive or logistics:
- Put people in the right positions. When you're able to match the skills, talent and interests of people with the requirements of the job, they don't need to be managed as closely. Everyone needs accountability, but people who know how to do the job and want to do it well are more likely to be self-starters.
- Empower employees within the process. When employees have to call supervisors for every little thing, it can breed micromanagement and decrease productivity. Build worker-based decision-making into your processes where possible, trusting your well-trained talent to make the right decisions and follow up with management as appropriate.
- Be wary of negative biases. Leaders can sometimes develop a bias for certain workers, assuming that the person or people in question will not perform well. This can lead to only seeing the mistakes or problems—and never the positives—which creates a negative feedback loop that can cause a demoralised worker to be less productive.
- Encourage employees to speak up. One sign of micromanagement is that employees don't feel comfortable speaking up or providing their own ideas. They may believe that a supervisor's way is the only way that will be allowed. This can lead to situations where solutions and good ideas that might improve productivity aren't brought up.
- Ensure management speaks to processes it understands. Another potential complaint about micromanagement isn't that supervisors are always around or involved. It's that leadership doesn't actually understand the day-to-day process but shows up to make decisions anyway—possibly making decisions that actually reduce worker productivity.
2. minimise the meetings
A poll of UK workers found that the majority of employees felt that unproductive meetings were wasting their time—so much so that 66% said they would make excuses to get out of such meetings.
The problem is the same elsewhere in the world. The same survey indicated that German workers were even more likely to lie or come up with excuses to get out of meetings. And around 67% of workers in the U.S. pointed to excessive meetings as a reason for poor work performance.
Even when you're managing workers in logistics or manufacturing, where board meetings aren't something on everyone's schedule, the team still likely come together for communication at least periodically. And that's a good thing—some messages just don't work well in email. Besides, not everyone on a production line has regular access to email or other forms of communication throughout the day.
But before you implement a morning team check-in every day or call everyone to the team meeting room, ask yourself these questions:
- What is the purpose of the meeting? Does it enhance company culture, build team skill sets or add to productivity? If meetings aren't serving a specific business-facing purpose, you may want to curtail them.
- Does everyone need to be in on the meeting? It's tempting to invite every team member as a demonstration of transparency or inclusion, but doing so could be making workers' jobs harder. Talk to team members, line supervisors and others to find out what type of communication works best for everyone and who needs to be in various meetings.
- Can the information come in a different format? Pre-recorded videos that people can watch at their convenience on the job, emails or even paper memos are all messaging options. Always consider whether a meeting is the most effective method and if it's not, go with something else.
3. incentivise productivity
There's a lot you can do as an employer to increase worker productivity, but there's also a lot of team members can do. Incentivising production might help motivate employees to do their part to increase performance.
Incentives start to cut into compensation territory, so ensure you work closely with your human resources, legal and compliance teams when putting programs together. And remember that incentives don't always have to come in the form of bonuses or other monetary compensation. Some other ideas might include:
- Recognition programs. Thanking employees publicly or rewarding them with accolades or special perks may incentivise some. Program options might include lunch with the executive team, getting recognised as employee of the month or a certificate or other tangible evidence of the high performance that employees can use in the future to support career growth.
- Extra time off. Being able to leave early on Friday, added PTO time or an excused late arrival with no questions asked are examples of potential rewards.
- Meals or snacks. Treat the team to lunch, an ice cream break or other food for making a goal. Or, offer gift cards for individuals who improve productivity performance or break a goal.
- Contests and giveaways. Offer tickets or entries into giveaways for certain positive actions or productivity. Then, pull a name out of the hat each month and give someone the prize.
want more ways to improve productivity for your business?
The three strategies described above are just some of the ways you might increase worker productivity in your business. Whether or not they would work with your teams and processes is something you have to decide for yourself—hopefully in conjunction with your human resource team who can help you create seamless, effective talent management policies.