The Importance of Productivity Monitoring

This article discusses and defines productivity monitoring. It also lists a few reasons why productivity monitoring should not be overlooked by companies no matter what their size.

Some companies may preach that monitoring Productivity is already redundant because all they need to look out for is the Revenue and Profit reports. They would say that as long as the profit and revenue levels are at an optimum level, they don’t need to look at productivity reports – wrong! Even if productivity levels do not present a direct view into the health of a company, the productivity levels of a company can in turn help company executives to determine where they can improve their performance. It is also a way for companies to reward deserving employees who have excelled in their productivity.

Why are revenue and profit reports not enough? They are not enough because they only present the end result and not the process with which it got to be so. They do not give the intermediate data like that of individual or sector performances. It also does not give proper commendation to those that deserve it. Another reason why revenue and profit reports are considered inadequate is because it is only useful when a company has positive output. When that output is less than what is desired, heads would then turn to more intensive reports like productivity reports.

Why is productivity monitoring important, if not imperative? One reason why productivity monitoring is important is that it helps companies to determine their strengths as well as their weakness. Once these points are determined, measures can be taken in order to remedy it, as a result it may even bring in greater profits for the company as a whole. Another is to regulate the output of the different departments. No one department should carry to much weight and if so, it should be delegated to others. Below you will find a case of a multinational company that lost a lot of money because they were lost in enjoying their profit reports without once glancing at their Productivity Levels.

Company A has had a very impressive year. Their profits were at an all time high and their costs were as little as possible. It seemed like everything was going well until a weight bearing department collapsed without warning. The damaged department was apparently the one that was bringing in a bulk of the profits and they were already buckling under the weight of their responsibilities and no other department was assigned to help relieve the strain. This resulted in Company A loosing a lot of money during the time that their most profitable department was recovering. Later investigation into the cause of the downfall produced a productivity reports showing that the department was producing more than is advised and what is healthy for something of its size. If company executives had just glanced at the productivity report, they would have prevented the disaster by delegating tasks to other less stressed departments.

The above example should be a caution to all other companies that tend to neglect productivity reports and other company health indicators. Profit reports are not everything, Productivity Monitoring reports and other processes are also necessary to ensure a smooth flow and to avoid such financial disasters.