When an organisational leader asks themselves the question, 'Is my team productive?', how do they know the answer? 'Productivity' has become a buzzword in business and many people don't know where to start with measuring productivity and productivity improvement.

What data should you track and what tools and programs should you use to measure productivity? How will you analyse the information to make it useful? Read on to learn more about how you can create an effective productivity measurement process for your organisation.

Keep It Simple With a Productivity Output Formula

This method works well for industrial or assembly line jobs where numbers are simple to calculate, but can also be helpful for sales departments where team members have specific quotas. Here's how to calculate a simple productivity formula:

• Determine the total output you are going to measure. It could be phone calls made, sales closed or the number of qualified leads in the sales pipeline.
• Get your input number. This is the actual number of phone calls, sales, leads, etc.
• Simply divide the output by the input
• Give a dollar value to this number for a cost-benefit ratio.

If you use the formula over time, it can be quite easy to see productivity growth. This works well for some teams to measure labor productivity, but not all. It can be combined with other methods.

Performance Management Systems

There are many tools and resources available that help companies large and small track productivity and individual performance.

For example, Samewave is social performance management software that helps organisations track progress towards goals and targets while increasing accountability towards reaching them with Promise-Based Management.

Team members can assign goals, collaborate about them, communicate via chat streams and upload documents. Samewave will even show individual productivity statuses by indicating if someone is in the green, yellow or red by tracking their adherence to promises, generating productivity increases. Furthermore, it can generate productivity reports automatically and have them instantly emailed to the people that need them.

Measuring Productivity Through Profit

Revenue is the bottom line for every business, so measuring productivity through profit often comes naturally, especially for sales-driven teams.

If you work in a marketing or creative role, be careful not to lean on this measure of productivity too much. Team members shouldn't be punished for spending time in creative thinking, brainstorming or creating the best products. Measure their productivity by measuring the value of the products or services they bring to the organisation.

How much time does it take your teams to take raw materials or ideas and turn them into profitable products or services? The key productivity vs. profit measurement is called the team effectiveness ratio. This measures how the dollar amount of gross profit the company makes compared to every dollar spent on employee salaries. Many companies prefer this method over time tracking because it encourages teams to work smarter rather than put in more hours.

Daily Check-Ins

Frequent and robust communication does wonders for keeping teams on task and helping them support one another. It also increases accountability when team members have to report on their progress on a daily basis.

Some workers need validation for accomplishing tasks and want a place to share successes. Employees who struggle with procrastination get an extra push to reach goals. If they know they are going to have to report out on their progress they are more likely to do the right thing. Be careful to keep the check-ins brief to avoid a sense of micromanagement.

Be cautious not to schedule long, unproductive meetings just for the sake of checking in. Keep your check-ins simple with the right tools. Have brief phone or video calls or use software like Samewave to communicate. With Samewave, team members can create chat streams where they update the entire team on their progress, collaborate and share files. They can even communicate updates on the go with mobile apps for Android and iPhone.

Create a Dynamic Productivity Plan

Create individual and group benchmarks and milestones for every department. Don't let them get stagnant or filed away in some human resources folder. Revisit them regularly as your team changes, as the industry moves and the organisational goals evolve.  

Take the strengths and weaknesses of co-workers into account when creating a plan for optimal productivity. If you have one employee that can generate social media ads in half the time as another employee, make them responsible for social media and assign different work to the other employee.

Create a Productivity Index

Productivity is a relative measurement — that's why there is often so much confusion around the term. Creating a productivity index allows you to compare your productivity data against something else.

Measure productivity during different time periods and compare them against one another. For example, if you use the productivity output formula to measure productivity, compare the numbers quarterly. If a team member had a total productivity score of 4.4 in the first quarter and 5.7 in the second quarter, divide the numbers to calculate a difference of 1.29, for a 29 percent improvement in productivity.

Use Longitudinal Reporting

When you measure productivity over time, you have the advantage of being able to notice long-term trends and productivity changes. You know who your highest performers are, who is ready for promotion and who is struggling or needs to be removed from a team.

You'll also be better able to predict the time period it will take to complete certain projects and tasks, if you need to hire more staff and how many people you need on one project.

Start Improving Overall Productivity Today

Use these strategies and tools to begin creating a more productive organisation and reach your business goals faster. Continually tracking productivity levels and performance gives you more insight into your strengths and weaknesses and helps leaders develop the most efficient business processes.