How to Measure Productivity? – Providing Solutions to this Dilemma
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Productivity is recognized to be the driving force behind business triumphs. Therefore, managers need to answer the question of how to measure productivity in order to come up with strategies that will improve overall organization productivity.
How to measure productivity? This is a question that plagues people occupying supervisory positions. While many may still be confused about how to measure this aspect of job performance, it is widely recognized that productivity is an important criteria for business success.
Productivity, as an economic term, is defined as the overall measure of generated output against a given number of inputs. Productivity in the workplace, in particular, refers to the generated output of a business organization given their available resources. The workforce is considered by many companies as their most important asset. The employees also happen to be companies’ biggest expense generators. In fact, in many firms, salaries, allowances and training expenses make up a large chunk of company’s operating expenses. Today, more and more top level management of companies recognize the need to raise the level of employee productivity for them to generate larger revenues.
Efficient leadership and management is considered to be very crucial in helping employees become more productive. Managers should be able to create a positive and conducive working environment for their subordinates and team members for them to be motivated to explore all opportunities for the benefit of the company. Work and job descriptions should also be carefully analyzed and assigned so that there is harmony within the workplace. The use of necessary technologies is also imperative to increase efficiency. Collaboration and networking with other corporate departments should also be encouraged to facilitate exchange of information and ideas that will be mutually beneficial to two parties. Investing in credible and efficient training and development programs also enhances productivity as they can help employees develop skills that will make them capable to do more and better things.
While the productivity tips discussed previously are widely used in organizations, more and more companies now realize the importance of measuring productivity before any of the strategies mentioned are to be implemented. Measuring productivity is not easy. First, managers should be able to overcome the challenge of identifying what measures or performance metrics truly matter to the organization. These metrics will eventually be used as basis of the individual performance of employees. Managers should be able to relate the metrics they have identified to the organizational objectives they want to achieve.
In response to this common dilemma of identifying important performance metrics, numerous companies and management experts have advocated the Balanced Scorecard approach. This is a management style introduced by Robert S. Kaplan and David P. Norton back in 1992. Implementation of the Balanced Scorecard approach typically starts with the translation of a company’s vision into short-term operational goals. The second step in the process involves reconciling company vision and individual employee performance. The next steps include business planning and strategy learning and feedback. These processes led to the focus on four perspectives under this management approach which are the customer perspective, the financial perspective, learning and growth perspective and internal business processes perspective. Through the Balanced Scorecard management approach, managers should know how to measure productivity using performance metrics that truly matter.
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