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How the Productivity Formula Can Motivate Employees to Work Efficiently

How the Productivity Formula Can Motivate Employees to Work Efficiently

In 1911 Frederick Taylor, an American engineer turned management consultant, published a book, The Principles of Scientific Management, which revolutionized practices for workplace efficiency.[1]

In the book, Taylor proposed the idea that employee productivity and motivation could be altered by changing specific variables. By optimizing these variables, companies could maximize workplace efficiencies and profits, whilst minimizing costs and eliminating inefficiencies.

Since Taylor’s ideas were published several decades ago, these important variables have been integrated into a simple equation that managers and leaders use to measure and improve employee motivation and productivity.

The simple equation is called the productivity formula and here’s how it works.

What is the Productivity Formula

The productivity formula is a measure of the productivity of an economy, organization, team or employee. In the context of a company it provides a useful indication of how efficiently a company converts raw materials, machines and groups of employees, into useful goods or services.

And this can be represented in the surprisingly simple productivity formula:

    The productivity formula is a basic relationship between physical input and output variables. The most common inputs are labor hours, capital and materials and the most common output units are sales and amount of goods produced.

    A company that produces more with a given variable of inputs (capital, labor, and materials) or uses fewer inputs to produce the same level of output has greater productivity and a competitive advantage over a company that produces a lower amount.

    The productivity formula illustrates how a company can produce more units of output per employee hour, machine or material used.

    How to Use the Productivity Formula

    As an example, a manager may want to calculate the productivity of the employees of his company or team.

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    In order to do this, employee productivity can be calculated by dividing the goods and services produced or sales revenue generated by the total hours the company’s employees worked in a given period of time.

    For example, if an employee called Tom, made sales worth $2,000 in one week of 50 hours worth of work and another employee called James works 20 hours a week and made $1000 worth of sales, then using the productivity formula:

    Tom’s productivity: $2000/50hrs = $40/hour

    James’ productivity: $1000/20hrs =$50/hour

    In this hypothetical scenario, James is more productive than Tom even though James generated less sales than Tom.

    Here’s another example:

    Imagine a retail company looking to measure its productivity. If the output of last month’s production was 20,000 units and the total employees hours worked was 2,000 hours, then based on the productivity formula:

    Company productivity: 20,000 units/ 2,000 hours= 10 units/hour

    As a final example, consider a heavily automated production line with a small number of staff. If say in a month the production line produces $1 million dollars worth of goods with 1000 total hours worked, then the company productivity is:

    Company productivity: $1,000,000/1000 = $1000/hour

    Even though the labor cost is much smaller than the cost of equipment, a company that invests in the efficient use of technology will gain a competitive advantage and improve company productivity than otherwise.

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    Managers can use this formula to determine which employees are the most and least productive, or the efficiency of a company in using its resources and materials.

    Nevertheless, this version of the productivity formula is limited due to its simplicity and restriction in variables.

    As per the examples above, this productivity formula only uses single units for input and output to calculate productivity and that’s why it’s described as a partial factor productivity.

    For a more accurate measurement, a company will need more inputs and outputs to calculate its overall productivity.

    This is where the multi-factor productivity formula could be useful.

    The Multi-factor Productivity Formula

    As previously noted, the partial or single-factor productivity formula is limited as a wholesome measure of productivity.[2]

    The multi-factor productivity formula helps managers to measure the productivity of various departments across a company.

    With this formula, productivity is measured by comparing output to a various inputs necessary for production. This includes ratios of units produced to materials, labor and capital.

    For example, switching one variable for another i.e. labour for capital, could produce a significantly different productivity figure. A more efficient measure of productivity should take into account the different substitutes for input and output and accurately represent how they affect company productivity.

    Whereas the partial factor productivity formula uses one single input, the multi-factor productivity formula is the ratio of total outputs to a subset of inputs. For example, an equation could measure the ratio of output to labor, materials, and capital. This method is a more comprehensive measure than partial factor productivity, but it’s also harder to calculate.

    For example, imagine a car manufacturing company which purchases advanced machine equipment to increase its production. Assuming this equipment enables the company to reduce the number of employees and costs 40% more than a standard machine cost, output will remain the same.

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    But since the number of employees has reduced, the labor and capital productivity of the company will increase. And there will be a decline by 40% in material productivity since output is constant and purchased material has increased.

    As a further consideration, a ‘Total Factor Productivity’ formula will take into account all inputs used in a production process and provide a more accurate assessment of company productivity and performance.

    How to Improve Employee Productivity with the Formula

    Here are 3 strategies based on the productivity formula to improve employee productivity:

    1. Measure and Improve the Efficient Use of Time

    Time, though not purchased, is often mistakenly ignored as a cost.[3]

    For example, if two companies have identical equipment, staff, products and material, but one business takes two weeks longer than the other to ship order purchases, their productivity is not the same.

    Managers who work with employees to maximize their time spent on tasks that align with their strengths and minimize time spent on everything else, will improve employee productivity.

    2. Promote Employee Autonomy

    In his book, Management Challenges for the 21st Century, legendary management expert, Peter Drucker writes that:

    “The demands that we impose the responsibility for their productivity on the individual knowledge workers themselves. Knowledge Workers have to manage themselves. They have to have autonomy.”

    Various studies have shown that human beings derive the greatest levels of motivation and satisfaction from achieving goals that are chosen by themselves or ‘self determined.

    Self-determined goals increase intrinsic motivation–i.e. the desire to do something for its own sake–rather than extrinsic motivation.[4]

    Intrinsically motivated people take more action on a given task, persist in the face of adversity, explore more creative ideas, enjoy their work and perform better.

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    The more autonomy and ownership employees have over their work role, the more productive they will be.

    Managers who include employees in setting goals and give them the autonomy to execute on them can significantly improve their productivity.

    3. Encourage Team Empathy

    In Smarter Faster Better : The Secrets of Productivity in Life and Business, author Charles Duhigg describes the story of how Google improved their team performance through “Project Aristotle,”[5] an extensive research into team productivity.

    At the end of their research period, Google discovered that the best teams weren’t necessarily a collective of individual top performers, rather a collective of individuals who shared empathy with one other.

    Teams that encouraged members to listen to one another and show sensitivity to each others needs performed the best.

    That is why people with high emotional intelligence tend to be the best leaders in a group setting.

    They tap into the emotional component of human motivation to get the most out of the people around them.

    The People’s Productivity Formula

    The productivity formula is a simple, useful tool to quantify, measure and manage employee productivity.

    As a standalone benchmark of productivity, it may not be sufficient as a measure of productivity that takes into account the complexities of a company.

    The best way for managers to use the productivity formula to motivate employees is to incorporate the people element.

    By maximizing time efficiencies, promoting employee autonomy and team empathy, managers can build a workplace culture that encourages long term productivity and satisfaction.

    Featured photo credit: Stanley Dai via unsplash.com

    Reference

    [1] New York Times. March 22, 1915.: F. W. Taylor, Expert in Efficiency, Dies
    [2] Bureau of Labor Statistics. U.S. De partment of Labor. Retrieved 11 March 2017: Multifactor Productivity – Overview
    [3] Paul Krugman, The Age of Diminishing Expectations (1994): “Defining and Measuring Productivity”
    [4] American Psychologist, 55, 68-78. Ryan, R. M. & Deci, E. L. (2000). Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being.
    [5] New York Times: Project Aristotle

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    Last Updated on January 13, 2020

    50 Motivational Quotes for Work to Inspire Success

    50 Motivational Quotes for Work to Inspire Success

    Let’s face it – no matter how excited you are about a new project or priority in your life, there will always be days when your motivation lags. Days when – despite all the progress you’ve made in the past – it just sounds easier to sit on the couch playing video games than to buckle down and crank out the work needed to meet your goals.

    In order to be successful, you must be able to motivate yourself past these humps. Whenever you feel your drive and determination lagging, turn to these motivational quotes for work to provide the extra spark of passion needed to keep you on track.

    Quotes about Goal Setting

    Whether you’re still in the planning phases of your business or whether you’re plotting a plan of attack to bring about your long-range vision, setting good goals is a critical part of succeeding in business.

    Check out these quotes for extra inspiration on how to turn your dreams into reality:

    quote-Benjamin-E.-Mays-the-tragedy-in-life-doesnt-lie-in-106113

      “The tragedy in life doesn’t lie in not reaching your goal. The tragedy lies in having no goal to reach.”– Benjamin Mays


      “By recording your dreams and goals on paper, you set in motion the process of becoming the person you most want to be. Put your future in good hands — your own.”–Mark Victor Hansen


      “Give yourself an even greater challenge than the one you are trying to master and you will develop the powers necessary to overcome the original difficulty.”–William J. Bennett – The Book of Virtues


      “The entrepreneur is essentially a visualizer and actualizer… He can visualize something, and when he visualizes it he sees exactly how to make it happen.”–Robert L. Schwartz

      Quotes about Achieving Excellence in Work

      Once you’ve got your goals together, you’ll need to put in 110% of your effort in order to transform these visions into reality. To increase your motivation to work at a consistently high level, take a look at the following words of wisdom:

      “Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit.”–Aristotle


      “If you are going to achieve excellence in big things, you develop the habit in little matters. Excellence is not an exception, it is a prevailing attitude.”–Charles R. Swindoll

      Desire is the key to motivation

        “Desire is the key to motivation, but it’s determination and commitment to an unrelenting pursuit of your goal — a commitment to excellence — that will enable you to attain the success you seek.”–Mario Andretti


        “The secret of joy in work is contained in one word – excellence. To know how to do something well is to enjoy it.”–Pearl Buck


        “The quality of a person’s life is in direct proportion to their commitment to excellence, regardless of their chosen field of endeavor.”–Vince Lombardi

        Quotes about Determination and Persistence

        Since every business or other endeavor is bound to hit some rough patches, it’s often a person’s level of determination and patience that brings about either success or failure. These positive quotes give you an extra boost of encouragement:

        “Enter every activity without giving mental recognition to the possibility of defeat. Concentrate on your strengths, instead of your weaknesses… on your powers, instead of your problems.”–Paul J. Meyer


        “Knowing trees, I understand the meaning of patience. Knowing grass, I can appreciate persistence.”–Hal Borland


        “Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘Press On’ has solved and always will solve the problems of the human race.”–Calvin Coolidge

        quote-Thomas-Fuller-an-invincible-determination-can-accomplish-almost-anything-92190

          “An invincible determination can accomplish almost anything and in this lies the great distinction between great men and little men.”–Thomas Fuller

          Quotes about Leadership

          Whether you use it to engage your employees, to encourage teamwork or motivate others to follow your unique way of thinking, leadership is crucial. Take your leadership cues from these renowned leaders’ famous sayings:

          “The most dangerous leadership myth is that leaders are born — that there is a genetic factor to leadership. This myth asserts that people simply either have certain charismatic qualities or not. That’s nonsense; in fact, the opposite is true. Leaders are made rather than born.” –Warren G. Bennis


          “All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership.”–John Kenneth Galbraith

          Leadership is not magnetic personality

            “Leadership is not magnetic personality — that can just as well be a glib tongue. It is not ‘making friends and influencing people’ — that is flattery. Leadership is lifting a person’s vision to high sights, the raising of a person’s performance to a higher standard, the building of a personality beyond its normal limitations.”–Peter F. Drucker


            “The task of leadership is not to put greatness into people, but to elicit it, for the greatness is there already.”–John Buchan


            “High sentiments always win in the end. The leaders who offer blood, toil, tears and sweat always get more out of their followers than those who offer safety and a good time. When it comes to the pinch, human beings are heroic.”–George Orwell

            Quotes for Success

            Think of success as a holistic process – one which results from the combination of goal-setting, excellence, patience, determination and leadership you prioritize throughout your career. These highly successful people provide you with an excellent source of motivation:

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            “Be patient with yourself. Self-growth is tender; it’s holy ground. There’s no greater investment.”–Stephen Covey


            “Believe in yourself! Have faith in your abilities! Without a humble but reasonable confidence in your own powers you cannot be successful or happy.”–Norman Vincent Peale

            Success is the ability to go from one failure to another with no loss of enthusiasm.

              “Success consists of going from failure to failure without loss of enthusiasm.”–Winston Churchill


              “Successful and unsuccessful people do not vary greatly in their abilities. They vary in their desires to reach their potential.”–John Maxwell


              “Would you like me to give you a formula for success? It’s quite simple, really. Double your rate of failure. You are thinking of failure as the enemy of success. But it isn’t at all. You can be discouraged by failure or you can learn from it, So go ahead and make mistakes. Make all you can. Because remember that’s where you will find success.”– Thomas J. Watson


              “The great successful men of the world have used their imagination.  They think ahead and create their mental picture in all its details, filling in here, adding a little there, altering this a bit and that a bit, but steadily building – steadily building.”–Robert Collier


              “It is a paradoxical but profoundly true and important principle of life that the most likely way to reach a goal is to be aiming not at that goal itself but at some more ambitious goal beyond it.”–Arnold Toynbee

              Sports Quotes for Athletes

              You don’t need to be a Michael Jordan-caliber athlete to draw inspiration from the following quotes. Even if you’re just a recreational player or someone who’s using sports as a means to get back in shape after long periods of inactivity, the following motivational sports quotes will encourage you:

              “My attitude is that if you push me towards something that you think is a weakness, then I will turn that perceived weakness into a strength.”–Michael Jordan


              “Pain is temporary. It may last a minute, or an hour, or a day, or a year, but eventually it will subside and something else will take its place. If I quit, however, it lasts forever.”–Lance Armstrong

              Strength does not come from winning. Your struggles develop your strengths.

                “Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength.”–Arnold Schwarzenegger


                “I know what I have to do, and I’m going to do whatever it takes. If I do it, I’ll come out a winner, and it doesn’t matter what anyone else does.”–Florence Griffith Joyner


                “Every time you stay out late; every time you sleep in; every time you miss a workout; every time you don’t give 100% – You make it that much easier for me to beat you.”–Unknown


                “If you are hurt, whether in mind or body, don’t nurse your bruises. Get up and light-heartedly, courageously, good temperedly get ready for the next encounter. This is the only way to take life – this is also ‘playing’ the game!”–Emily Post


                “We must train from the inside out. Using our strengths to attack and nullify any weaknesses. It’s not about denying a weakness may exist but about denying its right to persist.”–Vince McConnell

                Quotes to Motivate Learning

                Committing yourself to pursuing knowledge in a single area is a tremendous endeavor – one that often seems overwhelming given the depth and breadth of information that’s available today. Keep the following motivational quotes in mind if you’re learning:

                “How far you go in life depends on your being tender with the young, compassionate with the aged, sympathetic with the striving and tolerant of the weak and the strong. Because someday in life you will have been all of these.”–George Washington Carver

                quote-William-Arthur-Ward-if-you-can-imagine-it-you-can-36189

                  “If you can imagine it, you can achieve it; if you can dream it, you can become it.”–William Arthur Ward


                  “It is the mark of an educated mind to be able to entertain a thought without accepting it.”– Aristotle


                  “Success is not the key to happiness.Happiness is the key to success.If you love what you are doing, you will be successful.”–Albert Schweitzer


                  “Wear your learning, like your watch, in a private pocket: and do not pull it out and strike it, merely to show that you have one.”–Philip Stanhope, 4th Earl of Chesterfield


                  “He who asks is a fool for five minutes, but he who does not ask remains a fool forever.”–Chinese Proverb


                  “Study while others are sleeping; work while others are loafing; prepare while others are playing; and dream while others are wishing.”–William Arthur Ward


                  “Books can be dangerous. The best ones should be labeled ‘This could change your life’.”–Helen Exley


                  “A book is like a garden carried in the pocket.”–Chinese Proverb

                  All-Time Favorite Positive Quotes

                  Finally, whatever your goals are in life, you can’t go wrong by taking the advice of the following famous motivational quotes:

                  “Change your thoughts and you change your world.”–Norman Vincent Peale


                  “Your time is limited, don’t waste it living someone else’s life. Don’t be trapped by dogma, which is living the result of other people’s thinking. Don’t let the noise of other’s opinion drowned your own inner voice. And most important, have the courage to follow your heart and intuition, they somehow already know what you truly want to become. Everything else is secondary.”–Steve Jobs


                  “Nobody can go back and start a new beginning, but anyone can start today and make a new ending.”–Maria Robinson


                  “Out of clutter, find Simplicity. From discord, find Harmony. In the middle of difficulty lies Opportunity.”–Albert Einstein


                  “Yesterday is not ours to recover, but tomorrow is ours to win or lose.”–Lyndon Johnson

                  If we did all the things we are capable of, we would literally astound ourselves.

                    “If we did all the things we are capable of, we would astound ourselves.”–Thomas Edison


                    “You miss 100% of the shots you don’t take.”–Wayne Gretzky


                    “Success is not final, failure is not fatal: it is the courage to continue that counts.”–Winston Churchill


                    “What lies behind us and what lies before us are tiny matters compared to what lies within us.”–Ralph Waldo Emerson

                    Final Thoughts

                    To use these motivational quotes effectively, find the one that speaks to you. Although all of the phrases listed above can be considered “motivational,” only you can decide which one resonates with you most directly.

                    Next, take the quote you’ve settled on and copy it onto small index cards or other pieces of paper that can be stored around your home and workspace.

                    If you’re creative, you can create inspiration boards, signs or other decorative displays featuring your favorite motivational quotes – really, though, the most important thing is that your chosen phrase be accessible in a variety of different places. This will make it easy to access and review whenever you feel your motivation slipping away.

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                    Featured photo credit: Kyle Glenn via unsplash.com

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