How to measure & improve employee productivity in the new year

by Liam Martin
Project Time Tracking Software

Your company’s success is directly linked to the productivity of your employees. 

If your employee productivity rate is high, chances are you’ll be profitable and thrive even during difficult times. 

But how do you improve employee productivity?
Well, productivity is a nuanced topic. 

For instance, if you think making your employees work long hours will improve productivity, you’re wrong. It’ll simply tire them out, reduce their engagement, and lead to their burnout. 

In this article, we’ll explore what employee productivity means and how to measure it. Then, we’ll discuss the three major factors that could negatively affect productivity and the 13 measures you can implement to increase it. 

This article includes: 

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Let’s begin. 

What is employee productivity? 

Employee productivity can be simply defined as the amount of valuable work (output) they produce in a given timeframe. Since it’s often calculated by comparing an individual’s performance to their peers, it’s also called workforce productivity. 

Higher productivity usually indicates a high level of employee engagement, helping you stay competitive in the market. 

However, managers need to be aware that individual differences will always exist between employees and that employee productivity varies considerably from country to country.

Why is employee productivity important? 

When employees are productive, it will directly translate to:

  • Higher profits.
  • Increased employee satisfaction and retention. 
  • Better customer service. 
  • A positive work environment. 

Understanding how to maximize employee productivity also requires you to take a look into existing workflows. It will help you understand if any roadblocks exist and how to remove them. 

Let’s now look at the productivity measures you can use to calculate employee productivity at every level of your organization. 

How to accurately measure employee productivity

Now, there’s no standard formula you can apply to calculate employee productivity across industries. Additionally, several factors affect an individual’s productivity. 

For instance, in manufacturing, you could use the following equation to gauge your team’s productivity:

Labor productivity = Total output (volume created)/total input (labor hours and resources)  

If your company has a revenue of $100,000 among 50 team members in a week,

100,000/50 = 2000

This means that each team member generates around $2,000 for your company every week. 

While this productivity measurement formula is pretty straightforward, you can’t use it in another industry, like customer support. There, you’ll have to consider the various call center productivity metrics.  

So, here are some factors that can help you gain a complete picture of an employee’s productivity:

1. Speed and efficiency

Speed is always an important measure of productivity. However, it’s always balanced with quality. 

So, if an employee can produce a high volume of work in a short period while also maintaining quality standards, then that is a productive employee. 

2. Quality of work

An individual employee whose work requires constant changes and revisions lowers the team’s productivity level. 

However, this should also take into account the employee’s experience. 

For instance, a new employee may take a long time to complete a task. Here, it’s important to view their performance over some time. 

3. Dependability and consistency 

Another important aspect of employee performance is how dependable they are. 

Can they consistently produce high-quality work in the given time frame? If so, then that factors into their overall productivity.

Now, let’s look at what might negatively impact productivity. 

3 major factors affecting employee productivity 

The three factors detailed below can hinder productivity but also provide a blueprint for improving it.


They have a common theme: employee satisfaction

Let’s explore how low employee satisfaction negatively impacts productivity.  

1. Work environment 

Your employees’ work environment plays a massive role not just in their productivity but also in their job satisfaction. 

A negative environment where office politics, backbiting, and gossip reign supreme can erode an employee’s confidence. Similarly, if employees feel they can’t approach HR (Human Resource) with their concerns, it could increase anxiety and resentment. 

Their workspace – lighting, ventilation, decor, etc. – can also impact productivity. 

For instance, a dim-lit environment can cause eye strain, while uncomfortable chairs can lead to muscle tension and long-term health problems. 

These factors may also affect remote employees. If they don’t have a quiet, dedicated workspace, it may lead to constant distractions and interruptions. 

2. Employee wellbeing 

If employees are unwell, it can impact their job performance. In the case of infectious diseases, their presence in the office can put others at risk. 

While this isn’t a concern for remote work, employees here might feel the effects of social isolation and a blurred work-life boundary. All of this can contribute to mental health issues like depression and anxiety. 

However, employees might be fine themselves but worry about dependents such as children, elders, etc. Juggling all these responsibilities can lead to employee burnout, often resulting in low productivity. 

3. Company culture and management practices

Did you know that 86% of entrepreneurs believe that company culture helps boost employee productivity? 

Your company culture is how your employees feel connected to and invested in your success. If your values align with theirs, they’re likely to put in more effort. 

However, this culture isn’t just relegated to your mission statement. 

Employees should be able to visualize their journey and growth opportunities in the company. Supervisors and higher level managers should also provide constructive feedback and show appreciation often. 

If employees don’t receive these things or receive them intermittently, they’ll feel detached from your company and likely leave. 

Let’s explore some ways you can remove these obstacles to create a productive workforce.

13 easy ways to increase employee productivity

Increasing employee productivity requires a multi-pronged approach tackling various organizational, environmental, and psychological aspects. 

Here are 13 ways you can start this journey: 

1. Optimize workplace conditions

Numerous studies have shown that workplace productivity is directly linked to employees’ satisfaction with their physical environment. 

Simple things such as improving ventilation and providing comfortable lighting can positively impact employee satisfaction and, as a result, their productivity. 

While open-plan offices are known to boost creativity and teamwork, they can also create a lot of noise and distraction. This may result in lost productivity, leading to dissatisfaction and frustration. 

Instead, you can assign a separate creative space where employees can collaborate and a quiet area to focus on work. 

2. Match employee skills to tasks 

A great way to maximize employee efficiency and satisfaction is by assigning them tasks they’re well-suited for. 

For instance, an introverted employee may not prefer to give too many group presentations. They might thrive in detail-oriented work, which their more extroverted coworkers may find challenging. 

However, this doesn’t mean you shouldn’t encourage them to test their limits. 

But, if an employee has a particular skill set and you assign them a task that utilizes it, they’ll feel more confident and produce better results. 

3. Invest in the right tools 

With constant technological advancements, your employees require the latest tools to perform their jobs efficiently.  

For instance, if moving all communication to Slack, a free app, will drive remote employee productivity, it might be worth looking into. Similarly, you can get cloud-based project management tools like Asana or Basecamp so employees can keep track of their tasks and projects. 

It may seem like a high cost upfront, but it will improve the overall employee experience leading to increased productivity. 

4. Offer training opportunities

Training employees goes beyond the initial onboarding stage. 

For instance, you can train employees about a new project management tool or software system. 

Constantly learning new skills will challenge your employees, increasing their engagement in the workplace. You may also discover that some employees quickly learn certain aspects, allowing you to focus on developing those skill sets and offer better services. 

When employees receive all these learning opportunities through their workplace, they’re more likely to stay loyal and put in the effort to advance further. 

5. Improve communication protocols 

Communication is a two-way street. 

If employees notice their employer isn’t responsive to them, they’ll stop communicating with management as well. 

Communication goes beyond words, whether it’s taking an employee’s concern seriously or proactively solving potential problems.  

For instance, if an employee is struggling with their workload, who can they approach?
What steps will be taken, and how soon will a solution be available to them? 

In this case, even a rough timeline and clarity regarding the communication flow will ease employee anxiety and help them feel more confident about asking for help. 

On the other hand, if the employee gets rebuffed, it may cause them to withdraw, become angry, and quit. 

So, to increase employee satisfaction and engagement, you must have transparent communication practices in effect. 

6. Show trust by delegating tasks 

You can’t expect your team members to perform to the best of their ability if you’re micromanaging their every move!

Instead, you can delegate certain tasks to employees who have proven their capabilities. It will help them gain valuable leadership experience and give them a sense of accomplishment. 

Delegating responsibilities is also a great way to show your appreciation for employees’ hard work. 

7. Allow flexible schedules 

By implementing flexible work schedules and offering remote work options, you can empower employees to choose their own hours while maintaining a healthy work-life balance. 

A hybrid workplace also helps you cut back on the cost of maintaining an office and hire talent from all over the world. 

You can set specific benchmarks for remote workers, e.g., minimum working hours per week or month. Or you can take a quality-over-quantity approach to encourage high-quality work. 

Learn more about the different types of flexible work schedules here. 

8. Set SMART goals 

Your employees can’t meet your productivity expectations if they don’t know what they are. 

You can use SMART goals for this – “specific,” “measurable,” “attainable,” “realistic,” and “timely.”

You should also ensure that each employee knows the following: 

  • How you measure employee output.  
  • The steps they need to take to achieve a target. 
  • The amount of time it should ideally take to complete a task. 

As the employee progresses, their goals should change and evolve. Communicating these changes will reduce frustration and guesswork, keeping everyone on the same page. At the same time, check in with the employee to see if they need any assistance or incentive to nudge them along. 

Since everyone works differently, accommodating their individual needs will lead to significant productivity gains. 

9. Reduce distractions 

Due to constant social media notifications, your employees may find it challenging to focus on a task for an extended period. 

To combat this, you can create a quiet room in the office where employees can work without team members popping by their desks. They can also use noise-canceling headphones for deep work. 

You can utilize employee monitoring software for remote work to ensure employees aren’t spending too much time on social media unless it’s for work.  

Removing these distractions will help employees increase their individual productivity and get more done in a single workday. 

10. Utilize time management tools 

If you want to see a productivity improvement across various departments, you need to have detailed records about how your employees utilize their work time. 

You can use Time Doctor, a powerful employee productivity tracking tool. 

Trusted by small as well as large businesses alike, Time Doctor provides valuable real-time insights into employee performance. 

Here are some ways Time Doctor helps you boost employee productivity: 

Using this productivity app will help you understand where you and your employees need to improve – on a company and individual level. 

11. Hold effective meetings 

Remote working has changed the landscape of work, including meetings. Employees are attending more meetings, leading to Zoom fatigue. 

Instead, schedule meetings for smaller blocks of time and only include essential personnel in each. 

Additionally, analyze whether an issue requires a meeting. If you can send out an email or a Slack message instead, it will help save your employees’ time, allowing them to become more productive. 

If you decide a meeting is needed, go into it with a plan. Have some talking points ready and end the meeting by assigning action items to team members. 

12. Emphasize employee wellness 

If your employees are stressed out and sleep-deprived, it can lead to low productivity and more mistakes, hurting your bottom line. 

However, you can counteract this by offering wellness programs at work. If an employee feels anxious, they can utilize the breathing techniques they learned at your work yoga class. 

Similarly, you can encourage employees to take time off (personal days) to rest and recharge. You should also lead by example – taking leaves when needed. 

Doing this will help employees understand the importance of setting boundaries and give them the tools to engage in effective self-care. It will also open communication between employees and HR professionals, creating a more cohesive unit.  

13. Encourage employee engagement

Employee engagement is a deceptively simple practice with high productivity gains.  

For instance, you can take the initiative by showing your appreciation when employees perform well consistently. This could take the form of rewards, public recognition, or even promotions. 

Additionally, you can incentivize high productivity through team challenges where the winning team wins a cash prize or paid time off. 

Creating an open-door policy where employees feel comfortable approaching supervisors with suggestions and improvements will also contribute to your overall growth. You can take this further by implementing realistic suggestions and giving the employee credit. 

Steps like this can go a long way towards creating a positive work culture where employee appreciation is a norm. 

Wrapping up 

Consistent employee productivity is key to your organization’s success, but you need to pay attention to the various factors that impact it — both positive and negative.

You can also use productivity software to gain a complete picture of your company’s workflows. This will help you recognize and remove any roadblocks to employee productivity. 

Additionally, it will help you understand how to improve communication between employees and management. This will help create a positive, accepting environment where employees feel cared for and safe. 

As a result, you’ll notice an uptick in employee satisfaction, organically increasing productivity.

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