Companies now operate in a data-driven world. Every step of the business cycle may now be logged, monitored, and reported on. However, increased scrutiny follows increased exposure. Where should your focus lie in terms of data collection? Which bits of information do you find most useful? What should you be doing with so much data at your disposal?
In the eyes of some small-scale business owners, productivity is just another term. You’ve heard that increasing productivity is vital to growing your business, but you’re not sure what that means. In this post, we’ll discuss how to quantify that nebulous concept known as “productivity” and how to use those findings in your business.
The 360-Degree Approach to Feedback
In this method, colleagues’ opinions are taken into account while evaluating an employee’s performance. It’s hard to fathom, yet there are times when this approach is the best course of action. Each worker’s performance is assessed based on how successfully they have carried out their responsibilities and contributed to the company’s overall objectives as judged by their peers, both above and below them in the organizational chart. All members of the team need to know their specific responsibilities and the level of performance that is expected of them in order to accomplish the goal.
1. Productivity Output Formula
This technique only requires a one-liner formula, so it can be easily implemented across your organization. It’s the most straightforward approach to getting actual figures and the most fundamental definition of “productivity.”
This formula is optimal in a production scenario where all products are of the same quality and quantity. However, it may not adequately account for aspects such as job complexity, individual differences in responsibilities and working styles, and other contextual considerations in other types of firms. Consequently, it is recommended to supplement this straightforward productivity formula with other productivity indicators.
2. The Profit = Productivity Strategy
Profitability is paramount in the corporate world. After all, as the adage goes, “money talks.” So judging productivity at your firm by the amount of profit earned makes perfect sense. Profit is typically used as a measure of productivity in small enterprises since it is direct and easy to understand.
In service organizations, such as creative agencies, assessing by profit also guarantees employees aren’t penalized for time spent thinking creatively or attempting to generate the finest product possible for the most significant client. The value they create for the business, in the form of profits, is used as a replacement metric for their performance.
The “team effectiveness ratio,” or the amount of gross profit generated per dollar of salary, is the primary indicator of productivity = profit. To motivate your team to work smarter rather than longer, this metric may prove more effective than one that measures profit against time.
3. Regular Check-In
Not all business owners care about productivity as much as they do about whether or not their employees can stay on target. So they have their team deliver daily updates of what they’re working on and what has been achieved. Each day’s updates feed into the subsequent week’s and month’s planning and goal-setting.
Employees who battle with procrastination and require constant encouragement can benefit significantly from a daily check-in system. Still, it’s essential to keep in mind that some people may find it too controlling. Avoiding the trap of micromanagement requires the careful execution of this strategy. It’s best deployed alongside a system of trust and ownership when each team member can be responsible for defining their own timetables and deadlines.
4. Project Management Software
There is smart online time monitoring and project management software available to assist you in keeping tabs on your productivity in a snap. Employees can keep better tabs on data using electronic timesheets, and managers can see how productive each team member is down to the task level. This software allows you to track who is doing what and when and then analyze that information to determine who is the most productive.
Online time tracking and project management software is an excellent option if your team works in a distributed fashion, either locally or remotely, throughout the world. Timekeeping is only one indicator of an employee’s productivity and contribution, and it may not be the ideal indicator for your organization.
5. Focus On Results Not Time Put In
Productivity can be monitored by dividing projects into subtasks (which is done as part of the project management system). Afterward, we can delegate those responsibilities to the staff members who will do them most effectively. Each team member may monitor their own Key Performance Indicators (KPIs) for the tasks within their purview and see how many they complete per hour, day, week, and month.
By keeping everyone in the loop about the project’s progress and upcoming milestones, we can ensure that our work is completed on time and that each individual task is prioritized over the time it takes to complete it.
6. The Service With a Smile Strategy
It might be challenging to assess efficiency in service organizations. Avoiding a queue means you should encourage your team to handle as many support tickets as they can. However, good customer service should not be sacrificed for faster service. Being responsive is useless if your replies are arrogant and unpleasant.
When developing a formula to evaluate the performance of your support staff, it is essential first to determine a standard against which to measure improvement. As a result, you will have a better basis for evaluating employee performance. Once a year, you can readjust this basis to reflect the market’s new realities.
These productivity indicators are helpful for small business owners in general, not just you. They also provide insight into the market value your firm offers, as well as the skills and motivation of your staff. More importantly, though, is the fact that productivity metrics can provide insight into employee and contractor performance, allowing you to strengthen areas that need it. They can help your team members stay on task, take pride in their work, and develop their potential as leaders.
Need more assistance in making your organization productive? Reach out to us today!