Before knowing how to measure productivity at work, we must learn what is productivity. Productivity is defined as the quantity of production of a unit of product or service per input of each factor used per unit of time. Measuring productivity and using it to improve further is a common practice in leading companies.
Factors That Help To Determine The Productivity
Productivity measurement is much more complex than it seems, and it is determined and impacted by many factors, including the following:
- The quality and availability of natural resources, which impacts production.
- The structure of the industry and changes in the sectors.
- The level of total capital and its increase.
- The pace of technological progress, more and better technology improves the level and quality of technology used in production.
- The quality of human resources (education), which impacts the results of human contribution.
- The macroeconomic environment, which can facilitate or hinder the participation of entrepreneurs and workers.
For measuring the productivity of a business or company quickly we can apply the following formula:
Productivity = (Products Produced In Quantity) / (Resources Needed For The Production).
Or, what is the same, a business is productive when it is possible to optimize the use of resources.
It seems, easy, but it is common that we make some errors that disturb the formula. If we really need to determine how productive our business is, we can start by following some tips that will aid us to measure the real productivity.
4 Formulas To Measure Productivity
- We should not evaluate each person or department individually, but rather the business as a whole. By collecting the results separately, there will only be information about that particular person or department. In addition, managers must have a complete vision of the business so that its objective is the company, not just its department.
- If we do not have an employee in charge to get these statistics, we can create that position. This expert should develop indicators to measure productivity, take charge of updating them and relate them to the business strategy.
- In order to connect the different departments of the company, we must measure the productivity of all employees.
- Once we have the measurement indicators linked to our business strategy, we will have to collect data periodically.
Tips To Measure Productivity
Productivity is also understood as the amount of work done in the shortest possible time. Of course, that work must be of high quality. Therefore, other quick tips to measure the productivity of a workplace would be the following:
- Compare the current results with those of previous periods (shifts, day, month and year).
- In the case of an industry, know how many hours and men have been needed to produce a unit. Nor would it be worth knowing how much electricity, water or gas has been consumed, for example.
- Know how much raw material or material has been wasted.
- Control the number of items rejected by quality control or that are not suitable for sale.
- Recalculate productivity with every change made in the company.
Measuring workplace productivity is not an easy task, especially if the company is big and divided into many divisions. Even we could go on and on about how many formulas are there to measure the productivity, but it was just to make it clear that if you manage to determine the productivity, you can improve it to benefit from it in the long run.
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