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Last Updated on December 9, 2020

How the Productivity Formula Can Improve Employee Efficiency

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How the Productivity Formula Can Improve Employee Efficiency

In 1911 Frederick Taylor, an American engineer turned management consultant, published a book, The Principles of Scientific Management, which revolutionized practices for workplace efficiency through the productivity formula.[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 efficiency and profits, while minimizing costs and eliminating inefficiency.

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.

This can be represented in the surprisingly simple productivity formula:

The Productivity Formula

    The productivity formula is a basic relationship between physical input and output variables. The most common inputs are labor productivity 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. This creates a competitive advantage over a company that produces a lower amount.

    The productivity formula illustrates how a company can increase units of output produced 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/her 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 number of hours the company’s employees worked in a given period of time.

    For example, consider an employee called Tom who made sales worth $2,000 in one week of 50 hours worth of work. Another employee called Jill worked 20 hours a week and made $1000 worth of sales. Using the productivity formula:

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

    Jill’s productivity: $1000/20hrs =$50/hour

    In this hypothetical scenario, Jill is more productive than Tom, even though Jill 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 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.

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    Managers can use this formula to determine which employees are the most and least productive, or measure 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 the level of 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 measure the productivity of various departments across a company.

    With this formula, productivity is measured by comparing output to 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. labor 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 that 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, 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 the amount of 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 self-determined, so this is essential to think about regarding the productivity formula.

    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 project analyzing team productivity.

    At the end of their research period, Google discovered that the best teams weren’t necessarily a collective of individual top performers, but 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.

    Final Thoughts

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

    More Tips on Improving Productivity

    Featured photo credit: Stanley Dai via unsplash.com

    Reference

    [1] New York Times: F. W. Taylor, Expert in Efficiency, Dies
    [2] Bureau of Labor Statistics. U.S. Department of Labor: Multifactor Productivity – Overview
    [3] Paul Krugman, The Age of Diminishing Expectations: “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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    Mayo Oshin

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    Last Updated on October 7, 2021

    Are You Addicted to Productivity?

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    Are You Addicted to Productivity?

    “It’s great to be productive. It really is. But sometimes, we chase productivity so much that it makes us, well, unproductive. It’s easy to read a lot about how to be more productive, but don’t forget that you have to make that time up.”

    Matt Cutts wrote that back in 2013,[1]

    “Today, search for ‘productivity’ and Google will come back with about 663,000,000 results. If you decide to go down this rabbit hole, you’ll be bombarded by a seemingly endless amount of content. I’m talking about books, blogs, videos, apps, podcasts, scientific studies, and subreddits all dedicated to productivity.”

    Like so many other people, I’ve also fallen into this trap. For years I’ve been on the lookout for trends and hacks that will help me work faster and more efficiently — and also trends that help me help others to be faster. I’ve experimented with various strategies and tools . And, while some of these strategies and solutions have been extremely useful — without parsing out what you need quickly — it’s counterproductive.

    Sometimes you end up spending more time focusing on how to be productive instead of actually being productive.

    “The most productive people I know don’t read these books, they don’t watch these videos, they don’t try a new app every month,” James Bedell wrote in a Medium post.[2] “They are far too busy getting things done to read about Getting Things Done.”

    This is my mantra:

    I proudly say, “I am addicted to productivity — I want to be addicted to productivity — productivity is my life and my mission — and I also want to find the best way to lead others through productivity to their best selves.

    But most of the time productivity means putting your head down and working until the job’s done.” –John Rampton

    Addiction to Productivity is Real

    Dr. Sandra Chapman, director of the University of Texas at Dallas Center for BrainHealth points out that the brain can get addicted to productivity just as it can to more common sources of addiction, such as drugs, gambling, eating, and shopping.

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    “A person might crave the recognition their work gives them or the salary increases they get,” Chapman told the BBC.[3] “The problem is that just like all addictions, over time, a person needs more and more to be satisfied, and then it starts to work against you. Withdrawal symptoms include increased anxiety, depression, and fear.”

    Despite the harmful consequences, addiction is considered by some experts as a brain disease that affects the brain’s reward system and ends in compulsive behavior. Regardless, society tends to reward productivity — or at least to treat it positively. As a result, this makes the problem even worse.

    “It’s seen like a good thing: the more you work, the better,” adds Chapman. “Many people don’t realize the harm it causes until a divorce occurs and a family is broken apart, or the toll it takes on mental health.”

    Because of the occasional negative issues with productivity, it’s no surprise that it is considered a “mixed-blessing addiction.”

    “A workaholic might be earning a lot of money, just as an exercise addict is very fit,” explains Dr. Mark Griffiths, distinguished professor of behavioral addiction at Nottingham Trent University. “But the thing about any addiction is that in the long run, the detrimental effects outweigh any short-term benefits.”

    “There may be an initial period where the individual who is developing a work addiction is more productive than someone who isn’t addicted to work, but it will get to a point when they are no longer productive, and their health and relationships are affected,” Griffiths writes in Psychology Today.[4] “It could be after one year or more, but if the individual doesn’t do anything about it, they could end up having serious health consequences.”

    “For instance, I speculated that the consequences of work addiction may be reclassified as something else: If someone ends up dying of a work-related heart attack, it isn’t necessarily seen as having anything to do with an addiction per se – it might be attributed to something like burnout,” he adds.

    There Are Three “Distinct Extreme Productivity Types

    Cyril Peupion, a Sydney-based productivity expert, has observed extreme productivity among clients at both large and medium-sized companies. “Most people who come to me are high performers and very successful. But often, the word they use to describe their work style is ‘unsustainable,’ and they need help getting it back on track.”

    By changing their work habits, Peupion assists teams and individuals improve their performance and ensure that their efforts are aligned with the overarching strategy of the business, rather than focusing on work as a means to an end. He has distinguished three types of extreme productivity in his classification: efficiency obsessive, selfishly productive, and quantity-obsessed.

    Efficiency obsessive. “Their desks are super tidy and their pens are probably color-coded. They are the master of ‘inbox zero.’ But they have lost sight of the big picture, and don’t know the difference between efficiency and effectiveness.”

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    Selfishly productive. “They are so focused on their own world that if they are asked to do something outside of it, they aren’t interested. They do have the big picture in mind, but the picture is too much about them.”

    Quantity-obsessed. “They think; ‘The more emails I respond to, the more meetings I attend, the more tasks I do, the higher my performance.’ As a result, they face a real risk of burnout.”

    Peupion believes that “quantity obsessed” individuals are the most common type “because there is a pervasive belief that ‘more’ means ‘better’ at work.”

    The Warning Signs of Productivity Addiction

    Here are a few questions you should ask yourself if you think you may be succumbing to productivity addiction. After all, most of us aren’t aware of this until it’s too late.

    • Can you tell when you’re “wasting” time? If so, have you ever felt guilty about it?
    • Does technology play a big part in optimizing your time management?
    • Do you talk about how busy you are most of the time? In your opinion, is hustling better than doing less?
    • What is your relationship with your email inbox? Are you constantly checking it or experience phantom notifications?
    • When you only check one item off your list, do you feel guilty?
    • Does stress from work interfere with your sleep?
    • Have you been putting things off, like a vacation or side project, because you’re “too swamped?

    The first step toward turning around your productivity obsession is to recognize it. If you answered “yes” to any of the above questions, then it’s time to make a plan to overcome your addiction to productivity.

    Overcoming Your Productivity Addiction

    Thankfully, there are ways to curb your productivity addiction. And, here are 9 such ways to achieve that goal.

    1. Set Limits

    Just because you’re hooked on productivity doesn’t mean you have to completely abstain from it. Instead, you need to establish boundaries.

    For example, there are a lot of amazing productivity podcasts out there. But, that doesn’t mean you have to listen to them all in the course of a day. Instead, you could listen to one or two podcasts, like The Productivity Podcast or Before Breakfast, during your commute. And, that would be your only time of the day to get your productivity fix.

    2. Create a Not-to-Do List

    Essentially, the idea of a not-to-do list is to eliminate the need to practice self-discipline. Getting rid of low-value tasks and bad habits will allow you to focus on what you really want to do as opposed to weighing the pros and cons or declining time requests. More importantly, this prevents you from feeling guilty about not crossing everything off an unrealistic to-do list.

    3. Be Vulnerable

    By this, I mean admitting where you could improve. For example, if you’re new to remote work and are struggling with thi s, you would only focus on topics in this area. Suggestions would be how to create a workspace at home, not getting distracted when the kids aren’t in school, or improving remote communication and collaboration with others.

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    4. Understand Why You Procrastinate

    Often, we procrastinate to minimize negative emotions like boredom or stress. Other times it could be because it’s a learned trait, underestimating how long it takes you to complete something or having a bias towards a task.

    Regardless of the exact reason, we end up doing busy work, scrolling social media, or just watching one more episode of our favorite TV series. And, even though we know that it’s not for the best, we do things that make us feel better than the work we should do to restore our mood.[5]

    There are a lot of ways to overcome procrastination. But, the first step is to be aware of it so that you can take action. For example, if you’re dreading a difficult task, don’t just watch Netflix. Instead, procrastinate more efficiently,y like returning a phone call or working on a client pitch.

    5. Don’t Be a Copycat

    Let’s keep this short and sweet. When you find a productivity app or technique that works for you, stick with it.

    That’s not to say that you can’t make adjustments along the way or try new tools or hacks. However, the main takeaway should be that just because someone swears by the Pomodoro Technique doesn’t mean it’s a good fit for you.

    6. Say Yes to Less

    Across the board, your philosophy should be less is more.

    That means only download the apps you actually use and want to keep (after you try them out) and uninstall the ones you don’t use. For example, are you currently reading a book on productivity? Don’t buy your next book until you’ve finished the one you’re currently reading (or permit yourself to toss a book that isn’t doing you any good). — and if you really want to finish a book more quickly, listen to the book on your way to work and back.

    Already have plans this weekend? Don’t commit to a birthday party. And, if you’re day is booked, decline that last-minute meeting request.

    7. Stop Focusing on What’s Next

    “In the age when purchasing a thing from overseas is just one click and talking to another person is one swipe right, acquiring new objects or experiences can be addictive like anything else,” writes Patrick Banks for Lifehack .

    “That doesn’t need to be you,” he adds. “You can stop your addition to ‘the next thing’ starting today.” After all, “there will always be this next thing if you don’t make a conscious decision to get your life back together and be the one in charge.”

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    • Think about your current lifestyle and the person you’re at this stage to help you identify what you aren’t satisfied with.
    • By setting clear goals for yourself in the future, you will be able to overcome your addiction.
    • Establish realistic goals.
    • To combat addiction, you must be aware of what is going on around you, as well as inside your head, at any given time.
    • Don’t spend time with people who have unhealthy behaviors.
    • Hold yourself accountable.
    • Keep a journal and write out what you want to overcome.
    • Appreciate no longer being addicted to what’s next.

    8. Simplify

    Each day, pick one priority task. That’s it. As long as you concentrate on one task at a time, you will be less likely to get distracted or overwhelmed by an endless list of tasks. A simple mantra to live by is: work smarter, not harder.

    The same is also accurate with productivity hacks and tools. Bullet journaling is a great example. Unfortunately, for many, a bullet journal is way more time-consuming and overwhelming than a traditional planner.

    9. Learn How to Relax

    “Sure, we need to produce sometimes, especially if we have to pay the bills, but, banning obsession with productivity is unhealthy,” writes Leo Babauta. “When you can’t get yourself to be productive, relax.” Don’t worry about being hyper-efficient. And, don’t beat yourself up about having fun.

    “But what if you can’t motivate yourself … ever?” he asks. “Sure, that can be a problem. But if you relax and enjoy yourself, you’ll be happier.”

    “And if you work when you get excited, on things you’re excited about, and create amazing things, that’s motivation,” Leo states. “Not forcing yourself to work when you don’t want to, on things you don’t want to work on — motivation is doing things you love when you get excited.”

    But, how exactly can you relax? Here are some tips from Leo;

    • Spend 5 minutes walking outside and breathe in the fresh air.
    • Give yourself more time to accomplish things. Less rushing means less stress.
    • If you can, get outside after work to enjoy nature.
    • Play like a child. Even better? Play with your kids. And, have fun at work — maybe give gamification a try .
    • Take the day off, rest, and do something non-work-related.
    • Allow yourself an hour of time off. Try not to be productive during that time. Just relax.
    • You should work with someone who is exciting. Make your project exciting.
    • Don’t work in the evenings. Seriously.
    • Visit a massage therapist.
    • Just breathe.

    “Step by step, learn to relax,” he suggests. “Learn that productivity isn’t everything.” For that statement, sorry Leo, I say productivity isn’t everything — it’s the only thing.” However, if you can’t cut loose, relax, do fun things, and do the living part of your life — you’ll crack in a big way — you really will.

    It’s great to create and push forward — just remember it doesn’t mean that every minute must be spent working or obsessing over productivity issues. Instead, invest your time in meaningful, high-impact work, get into it, focus, put in big time and then relax.

    Are You Addicted to Productivity? was originally published on Calendar by John Rampton.

    Featured photo credit: Christina @ wocintechchat.com via unsplash.com

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    Reference

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