If you want your business to be successful, you need to think about, optimize, and measure employee productivity. Productivity is an intuitive concept that most people claim to understand, yet when it comes time to objectively track, measure, and calculate employee productivity, many managers and leaders are at a loss. That’s because productivity can be defined in many different ways, and there are literally hundreds of different tools that can help you measure it, each with their own advantages and limitations.
In this guide, I hope to shed some light on the elusive nature of how to measure employee productivity, and give you some of the best tools, approaches, and strategies to use when trying to measure employee productivity in your own organization.
Table of Contents
- What Is Employee Productivity?
- Creating a Baseline Calculation of Employee Productivity
- Areas of Employee Productivity to Measure
- How to Monitor Employee Workload
- Measuring Employee Productivity: Bonus Tips
What Is Employee Productivity?
Let’s start high-level by defining what productivity is, or what it can be within your business.
These are the three dimensions I’d like to focus on:
- Effort. It’s possible to judge an employee’s productivity based on the level of effort they put into their job. For example, let’s assume your office has the standard 9-5 schedule; if an employee comes in at 8, stays until 6, and doesn’t appear to take a break, you might consider that employee more productive than a counterpart that shows up late, takes a long lunch, and leaves early. Judging productivity by this metric alone is flawed, because it doesn’t factor in how much value those hours are truly worth.
- Results. You can also judge productivity based on results. If you’re running a manufacturing facility, you might use the number of products you manufacture as a baseline for your productivity. Otherwise, you might look at the number of sales closed, the number of articles written, or the number of calls made, or even Gmail metrics. This metric is in some ways superior, because it allows you to judge how much value an employee is bringing your company—and after all, productivity is all about judging relative value. However, it does have weaknesses, since it means some employees could be wasting time or resources in the pursuit of those results.
- Efficiency. Efficiency requires you to look at how much you’ve spent in order to get a certain result. For example, you might look at how many hours of work it takes to reach a certain level of manufacturing or closed sales, or you might judge how many weeks it takes to complete a specific project. Efficiency attempts to close the gap, letting you determine productivity as a rate over time, rather than a final measure in any way.
Ideally, you’ll be able to track employee productivity in all of these dimensions at once.
Creating a Baseline Calculation of Employee Productivity
Let’s start with your conceptualization of productivity, since different businesses will have different overall goals. You’ll need to solidify your understanding of what “productivity” means for your business, and create an equation that allows you to determine whether or not an employee or your team is “productive.”
1. Individual vs. collective.
First, you’ll need to decide whether you want to focus on individual productivity or collective productivity (or both). Collective productivity allows you to optimize high-level facets of your organization, such as team dynamics, resource allocation, and policies and procedures.
It also gives your team a reason to work together. Focusing on individual productivity allows you to better analyze each member’s strengths and weaknesses. It enables you to scout for potential issues proactively, and reward your best-performing employees as well. Most companies are best served focusing on a blend of the two.
2. Output vs. input.
You should also have a system that focuses on both output and input. Input includes things like how much you pay for your equipment, how much you pay your employees, and how many hours your employees are on the clock.
Output includes things like how many products you’ve created, how much revenue you’ve brought in, or how many tasks you’ve completed.
3. Goal vs. reality.
When measuring productivity, you should also have an idea of what “productive” actually means for your business, and for each of your individual employees. For example, you might expect a sales employee making $50,000 a year to bring in $100,000 or more in gross sales per year, or you might expect a software developer to fix 10 bugs in a given shift.
Some of these goals are easier to quantify than others, but you should have some kind of expectation in place. At the very least, you can put a goal together based on your initial discovery phase.
Areas of Employee Productivity to Measure
Next, you’ll need to consider which variables to plug into those equations. In other words, how are you going to judge an employee’s effort, or results, or efficiency?
These are the main areas you should focus on:
When most managers get serious about measuring employee productivity, they usually gravitate toward time tracking. The idea is to track not only when employees are working, but what they’re working on during those hours.
This is beneficial because it gives you insight into how an employee is spending their time, and gives you an objective way to evaluate the “input” value of your eventual outputs; for example, you can see how long it took you to put together a client proposal, or how long it took to finish a $3,000 project.
Time tracking also has some weaknesses, however; most time tracking apps can easily be manipulated with retroactive changes or timer controls, and it can’t always help you pinpoint the nature of the productivity problem (if there is one). If you discover that time management is a problem with your employees, be sure to review these essential time management skills.
A better way to track productivity is through employee email. With the right email analytics platform, you can determine how many emails an employee is sending and receiving, who their top senders and recipients are, how long they spend writing and reading each email, and what their email thread composition looks like.
By crunching these numbers, you can quickly determine what each of your employees’ workloads looks like, and pinpoint key areas where email isn’t being used effectively. See our list of email productivity tools for options on tracking employee email productivity.
If you have a project management platform, or if a role can be reduced to a sequence of individual assigned tasks, you can use the completion of tasks and projects to evaluate productivity.
This is useful because it ties productivity to a trackable objective, but can get complicated, since those objectives aren’t universally equal; for example, one employee might fix 20 small bugs, while another focuses on 1 large bug in the same timeframe.
It’s hard to compare these employees’ productivities against each other without digging into the details.
7. Successes and tangible goods.
You can also track productivity in terms of other successes, or tangible goods. These will vary tremendously based on your industry; for example, you might track the number of gears you manufacture, the number of sales you close, or the number of ads or logos designed within a given timeframe. This metric is best used in industries that have predictable, tangible, and/or countable results that are important to their overall performance.
To get the best of all worlds, it’s best to track a combination of these metrics at the same time.
How to Monitor Employee Workload
The next thing you need to worry about is measuring productivity in an objective and consistent, reliable way. Thankfully, there are many employee productivity tracking tools that allow you to do this, which range from broad business analytics tools to employee monitoring software.
These are some of my best recommendations if you’re looking for an employee productivity tracker:
EmailAnalytics is our own comprehensive email analytics tool that gives you insight into how your employees are sending and receiving email. With it, you’ll see a visual breakdown of multiple key metrics (including emails sent/received, busiest times of the day/week, average words per email, average response time, etc.), and be able to track how those metrics change over time. It’s ideal for not only tracking and measuring productivity, but also figuring out how to improve that productivity over time. Think of it as an employee productivity calculator.
Asana is a project management platform that allows you to create individual workspaces, and assign tasks within those workspaces. It’s highly customizable, which is ideal if your team has unique needs, and is perfect for tracking how many tasks your employees are completing (and how they’re completing them). If you’re looking for a time tracking solution as well, you’ll have the opportunity to integrate one.
Basecamp has been a leading name in project management for years, and for good reason. It has a wide range of features, so it appeals to many types of businesses, and uses discussion boards to organize messages between employees, clients, partners, and other contacts. Again, the idea here is to track employees’ completion of tasks and projects as a measure of relative productivity.
Trello is another project management platform, and possibly one of the most intuitive ones on this list. With it, you’ll create lists of cards that you can drag and drop to different phases of completion on a fully customizable screen. You can create different boards for different projects or for different teams, but unfortunately, there’s no built-in time tracker. If you use this platform, you’ll probably want to use it in conjunction with another method of analyzing productivity.
Todoist is a simpler platform you can use to organize your team’s tasks, files, and intercommunications. It also comes with a built-in activity log, and several data visualization features that allow you to easily determine how your team is performing as an admin. It also features an integration with Gmail, so it’s even more convenient for your team—though you won’t be able to track emails with this platform.
Salesforce has made a name for itself as the ultimate customer relationship management (CRM) platform. It’s a bit on the pricey side, but with the sheer number of customizations possible with the platform make it a potential fit for any business. It’s ideal to track the successes of your team, whether you’re focusing on closed sales, client retention, or other metrics.
Pipedrive is another CRM platform that’s a bit less expensive. It integrates with email, so you’ll have access to some email tracking features, and you’ll have an intuitive interface you can use to track the progress of your sales and marketing teams.
If you’re looking for a simpler, less expensive platform to give you a baseline in time tracking, try Toggl. It’s a platform that specializes in team-based time tracking, and is fairly easy to implement, without all the bells and whistles (or costs) of a more robust project management platform.
If you’re interested in something a little different, you can try TINYpulse. This platform categorizes itself as an employee engagement app, which asks your employees for feedback at periodic intervals. You can use these self-reported metrics to see what your team is doing, how they’re handling their respective workloads, and gauge their level of morale all at once.
If you’re looking for a simpler, albeit less objective platform, you could also institute your own self-reporting system. For example, you might encourage your employees to send you a list of their daily accomplishments at the end of each workday, or use morning meetings to get a feel for how everyone is working, and how your workloads are balanced.
With a tool or selection of tools in place, you should start by getting a baseline measurement—otherwise, you won’t have a control that you can use to gauge the effectiveness of your employee productivity improvement strategies. Then, take consistent measurements over time so you can see how your employees improve.
Also, keep in mind that the tools I’ve listed here are just the tip of the iceberg—there are dozens of other time trackers and project management platforms to choose from.
Measuring Employee Productivity: Bonus Tips
I want to leave you with a handful of tips you can use to track employee performance more effectively:
- Understand personal limitations. A team member whose productivity lags behind the others isn’t necessarily lazy or incapable; there may be personal limitations at play that make them less qualified for this work. For example, if they’re having trouble closing sales, they may perform better if they step into a supportive role, drafting service agreements or facilitating active client relationships.
- Find solutions, not problems. It’s easy to spot pain points, flaws, and problems when you start looking into your employees’ productivity, but if you focus exclusively on the issues, you’re going to breed resentment within your team. Instead of pointing out problems, try to find solutions proactively. For example, if you notice an employee is spending far too much time on email, suggest that they spend a few hours each day away from their email platform, or give them tips on how to write more concise messages.
- Be transparent. You can try to track your employees secretly, but it’s better to be open and transparent about it. Doing so will make your employees feel more trusted and respected, and will actively encourage them to work harder. Make it clear that they’re not going to succeed or fail within the company based solely on a single productivity metric.
- Update your tracking and thinking regularly. Your first solution probably won’t be the best solution. It’s going to take time for you to experiment with different productivity analytics tools, figure out your team dynamics, and decide which metrics are truly most representative of “productivity” in your organization. Keep brainstorming new solutions and approaches, and don’t be afraid to tinker with the system you have in place—even if it seems like it’s working. And adjust your tracking based on circumstances; for example, if your goal is to monitor employees working from home, the tracking solutions you use will need to be updated accordingly.
Maximizing employee productivity is one of the most important steps you can take to ensure the success of your business, and now that you know how to track and measure employee productivity, you can move on to implementing the strategies necessary to improve it.
You can start by signing up for a free trial of EmailAnalytics, which can help you understand how your employees are using email. From there, you can take a snapshot of your team’s current level of productivity, and use whatever productivity-enhancing strategies you can uncover to facilitate positive changes within your team.
Jayson is a long-time columnist for Forbes, Entrepreneur, BusinessInsider, Inc.com, and various other major media publications, where he has authored over 1,000 articles since 2012, covering technology, marketing, and entrepreneurship. He keynoted the 2013 MarketingProfs University, and won the “Entrepreneur Blogger of the Year” award in 2015 from the Oxford Center for Entrepreneurs. In 2010, he founded a marketing agency that appeared on the Inc. 5000 before selling it in January of 2019, and he is now the CEO of EmailAnalytics, and co-host of the podcast The Entrepreneur Cast.