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Last Updated on August 30, 2018

14 Ideas on How to Measure Productivity to Make Incredible Progress

14 Ideas on How to Measure Productivity to Make Incredible Progress

Everyone has heard the term productivity, people talk about it in terms of how high it is and how to improve it. But fewer know how to measure productivity, or even what exactly we are talking about when using the term “productivity”.

In its simplest form, Output ÷ Input = Productivity.

For example, you have two salespeople each making 10 calls on customers per week. The first one averages 2 sales per week and the second one averages 3 sales per week. By plugging in the numbers we get the following productivity levels for each sales person.

For salesperson one the output is 2 sales and the input is 10 sales calls 2 ÷ 10 = .2 or 20% productivity. Salesperson two, the output is 3 sales and the input is 10 sales calls 3 ÷ 10 = .3 or 30% productivity.

Knowing how to measure and interpret productivity is an invaluable asset for any manager or business owner in today’s world. As an example, in the above scenario, salesperson #1 is clearly not doing as well as salesperson #2.

Knowing this information we can now better determine what course of action to take with salesperson #1.

Some possible outcomes might be to require more in-house training for that salesperson, or to them accompany the more productive salesperson to learn a better technique. It might be that salesperson #1 just isn’t suited for sales and would do a better job in a different position.

How to Measure Productivity – 14 Proven Management Techniques

Knowing how to measure productivity allows you to fine tune your business by minimizing costs and maximizing profits:

1. Identify long and short term goals

Having a good understanding of what you (or your company’s) goals are is key to measuring productivity.

For example, if your company’s goal is to maximize market share, you’ll want to measure your teams productivity by their ability to acquire new customers, not necessarily on actual sales made.

2. Break down long term goals into smaller weekly objectives

Your long-term goal might be to get 1,000 new customers in a year. So that’s going to be 20 new customers per week, if you have 5 people on your team then each one needs to bring in 4 new customers per week.

Now that you’ve broken it down you can track each persons productivity week by week just by plugging in the numbers:

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Productivity = number of new customers ÷ number of sales calls made

3. Create a system

Have you ever noticed that whenever you walk into a McDonald’s, the french fry machine is always to your left? Why is that?

It’s because McDonald’s created a system. They have determined that the most efficient way to setup a kitchen is to always have the french fry machine on the left when you walk in.

You can do the same thing just adapt it to your business.

Let’s say that you know that your most productive salespeople are making the most sales between the hours of 3 and 7 pm. If the other salespeople are working from 9 am to 4 pm, you can potentially increase productivity by something as simple as adjusting the workday.

Knowing how to measure productivity allows you to set up, monitor and fine tune systems to maximize output.

4. Evaluate, evaluate, evaluate!

We’ve already touched on using these productivity numbers to evaluate and monitor your employees. But don’t forget to evaluate yourself using these same measurements.

If you have set up a system to track and evaluate your employees performance but you’re still not meeting goals, it maybe time to look at your management style. After all, your management is a big part of the input side of our equation.

Are you more of a carrot or a stick type of manager? Maybe you can try being more of the opposite type to see if that changes productivity. Are you managing your employees as a group? Perhaps taking a more one-on-one approach would be a better way to utilize each individuals strengths and weaknesses.

Just remember that you and your management style contribute directly to your employees productivity.

5. Use a ratings scale

Having clear and concise objectives for employees is a crucial part of any attempt to increase workplace productivity. So once you have set the goals or objectives, it’s important that your employees are given regular feedback regarding their progress.

Using a ratings scale is a good way to provide a standardized visual representation of progress. Using a scale of 1-5 or 1-10 is a good way to give clear and concise feedback on an individual basis.

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It’s also a good way to track long term progress and growth in areas that need improvement.

6. Hire “Mystery Shoppers”

This is especially helpful in retail operations where customer service is critical. A mystery shopper can give feedback based on what a typical customer is likely to experience.

You can hire your own shopper, or there are firms that will provide them for you. No matter which route you choose, it’s important that the mystery shoppers have a standardized checklist for their evaluation.

You can request evaluations for your employees friendless, how long it took to greet the shopper, employees knowledge of the products or services and just about anything else that’s important to a retail operation.

7. Offer feedback forms 

Using a feedback form is a great way to get direct input from existing customers. There are just a couple of things to keep in mind when using feedback forms.

First, keep the form short, 2-3 questions max with a space for any additional comments. Asking people to fill out a long form with lots of questions will significantly reduce the amount of information you receive.

Secondly, be aware that customers are much more likely to submit feedback forms when they are unhappy or have a complaint than when they are satisfied.

You can offset this tendency by asking everyone to take the survey at the end of their interaction. This will increase compliance and give you a broader range of customer experiences.

8. Track cost effectiveness

This is a great metric to have especially if your employees have some discretion over their budgets. You can track how much each person spends and how they spend it against their productivity.

Again, this one is easy to plug into the equation. Productivity = amount of money brought in ÷ amount of money spent.

Having this information is very useful in forecasting expenses and estimating budgets.

9. Use self evaluations

Asking your staff to do self evaluations can be a win win for everyone. Studies have shown that when employees feel that they are involved and their input is taken seriously, morale improves. And as we all know, high employee morale translates into higher productivity.

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Using self evaluations is also a good way to make sure that the employees and employers goals are in alignment.

You can try to make use of this self evaluation form.

10. Monitor time management

This is the number one killer of productivity in the workplace. Time spent browsing the internet, playing games, checking email and making personal calls all contribute to lower productivity.

The trick is to limit these activities without becoming over-bearing and affecting morale. Studies have shown that most people will adhere to rules that they feel are fair and applied to everyone equally.

While ideally, we may think that none of these activities should be done on company time, employees will almost certainly have a different opinion. From a productivity standpoint it is best to have policies and rules that are seen as fair to both sides.

11. Analyze new customer acquisition

Nothing comes free. We’ve all heard the phrase that “It’s more expensive to get a new customer than it is to keep and existing one”. And while that is very true, in order for your business to keep growing, you will need to continually add new customers.

Knowing how to measure productivity via new customer acquisition will make sure that your marketing dollars are being spent in the most efficient way possible. This is another metric that’s easy to plug into the formula, Productivity = number of new customers ÷ amount of money spent to acquire those customers.

For example, if you run any kind of advertising campaign, you can compare results and base your future spending accordingly.

Let’s say that your total advertising budget is $3,000. You put $2,000 into television ads, $700 into radio ads and $300 into print ads. When you track the results, you find that your television ad produced 50 new customers, your radio ad produced 15 new customers and your print ad produced 9 new customers.

So let’s plug those numbers into our equation. Television produced 50 new customers at a cost of $2,000 (50 ÷ 2000 = .025 or a productivity rate of 2.5%). The radio ads produced 15 new customers and cost $700 (15 ÷ 700 = .022 or a 2.2% productivity rate). Print ads brought in 9 new customers and cost $300 (9 ÷ 300 = .03 or a 3% return on productivity).

From this analysis, it is clear that you would be getting the biggest bang for your advertising dollar using print ads.

12. Utilize peer feedback

This is especially useful when people who work in teams or groups. While self assessments can be very useful, the average person is notoriously bad at assessing their own abilities.

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Just ask a room full of people how many consider themselves to be an above average driver and you’ll see 70% of the hands go up! Now we clearly know that in reality about 25% of drivers are below average, 25% are above average and 50% are average.

So are all these people lying? No, they just don’t have an accurate assessment of their own abilities.

It’s the same in the workplace. Using peer feedback will often times provide a more accurate assessment of a persons ability than a self assessment would.

13. Encourage innovation and don’t penalize failure

When it comes to productivity, encouraging employee input and adopting their ideas can be a great way to boost productivity. Just make sure that any changes you adopt translate into higher productivity.

Let’s say that someone comes to you requesting an entertainment budget so that they can take potential customers golfing or out to dinner. By utilizing simple productivity metrics, you can easily produce a cost benefit analysis and either expand the program to the rest of the sales team, or terminate it completely.

Either way, you have gained valuable knowledge and boosted morale by including employees in the decision making process.

14. Use an external evaluator

Using an external evaluator is the pinnacle of objective evaluations. Firms that provide professional evaluations use highly trained personnel that even specialize in specific industries.

In consolation with you, they will design a complete analysis of your businesses productivity level. In their final report, they will offer suggestion and recommendations on how to improve productivity.

While the benefits of a professional evaluation are many, their costs make them prohibitive for most businesses.

Final thoughts

These are just a few of the ways you can measure productivity. Some may work for your particular situation, and some may not.

The most important thing to remember when deciding on how to measure productivity is to choose a method consistent with your goals. Once you’ve decided on that, it’s just a matter of continuously monitoring your progress, making minor adjustments and analyzing the results of those adjustments.

The business world is changing fast, having the right tools to track and monitor your productivity can give you the edge over your competition.

Featured photo credit: Unsplash via unsplash.com

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David Carpenter

Lifelong entrepreneur and business owner helping others to realize the American Dream of business ownership

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Last Updated on November 12, 2018

Do You Want to Know the Secret to Living a Fulfilling Life?

Do You Want to Know the Secret to Living a Fulfilling Life?

Don’t we all want to live a full, happy and satisfied life? For some of us, it need not be a long life as long as it’s been a fulfilling life of achievements, happiness and no regrets. But, how many of us actually go on to experience that entirely? It sometimes sounds more like a pipe dream–a fantasy rather than reality.

And then you’ll also get comments from some, saying that this ‘fulfilling life’ is only possible if you’re so rich that you don’t have to care about working, paying the bills or providing for your family. While there is some truth to that, I’m happy to say that financial freedom isn’t the only answer to living a fulfilling life.

Living a Fulfilling Life is Within Reach

Anyone can pursue a life of fullness, and it all starts with the willingness to learn. How many years has it been since you last attended a class in school? If you’re well into your adult years as a working professional, chances are it’s been a while. Do you remember the times where you had to wake up for early morning lectures? Or the times where you were rushing through a paper or project? And, of course there were the endless exams that you had to cram for.

As a young college student, I remember looking forward to the time when I would finally be done with school! No more homework, no more grades to worry about, no more stress! The learning was finally done and I could enter the working world.

Not so much!

Now that I’ve finally entered the working world, there are moments where I do wish to be a student again; it seemed less stressful then!

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There is simply so much out there that I still need to learn and experience. Yet I find myself pressed for time. With family commitments, my business and my own social life to juggle, I’ve had to keep on finding for new ways to learn and absorb new information efficiently. Over the years, I’ve found that by learning new skills and knowledge, I was able to find answers and solutions to my problems, which allowed me to achieve a greater sense of fulfillment.

Learning Never Ends

The truth is, learning never ends. Generally speaking, it is true that a formal education and the resulting qualifications are important in securing good jobs; jobs that allow you to excel, earn more and perhaps become more successful in our chosen career. But going to school is only one type of learning. All throughout your life, you’re learning in many ways. All these experiences shape and grow you into the person that you are today.

There are many opportunities to further your knowledge and develop the skills you need throughout life. Knowledge can be acquired and skill-sets can be developed anywhere. However, lifelong learning is about creating and maintaining a positive attitude to learning both for personal and professional development.

Many people overlook the fact that learning can take place anywhere and in many forms. Most would tend to think of learning as the years spent in a learning institute, which occurs mostly in their younger days. And once you go out into the working world, your ‘learning’ ends.

This is not how it has to be–in fact, lifelong learning is a gift that keeps on giving.

The Importance of Lifelong Learning

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Why is it important to become a lifelong learner?

A lifelong learner is motivated to learn and develop because they want to; it is a deliberate and voluntary act. Lifelong learning can enhance our understanding of the world around us, provide us with more and better opportunities, and improve our quality of life.

You’ll Remain Relevant in the Workplace

With advancements in society today, the human life expectancy continues to increase, which means more people are also retiring at a later age. So no matter what stage of life you’re in, being a lifelong learner brings its own rewards. It means we can get more personal satisfaction from our lives and jobs as we understand more about who we are and what we do.

This can lead to better results and a more rewarding working day in turn. Whether it’s for advancing your career, a personal interest or wanting to pursue new dreams, learning automatically pushes you forward towards progress and enhances your wellbeing.

You’ll Increase Your Earning Potential

From a financial point of view, a more highly skilled and knowledgeable worker is an asset to any company. This also leads to faster promotion with associated salary increases.

Someone who can offer more expertise will be of more value not just to employers but also to customers. Expertise is also, often, a key quality of an effective leader.

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And since you’ll constantly be accumulating knowledge, you’ll have an edge on those who don’t value lifelong learning and can’t bring as much to the table. Your extra knowledge will translate into transferable skills, which means you’ll always be primed to blow the competition out of the water.

Learning Gives You Options

Of course, one of the most rewarding reasons for continuous learning, is that it gives you options! Successfully changing career path in mid-life and spending time informally developing expertise is more common than ever, especially during rapidly changing market conditions.

Whatever your age, it’s never too late to start fresh in life. When you start educating yourself and exposing yourself to new knowledge and information, you widen your opportunities. This will allow you to do more than what you may currently be doing, or give you a way out if you’re not happy or fulfilled with where you’re at now.

Our economy is shifting increasingly towards short-term and part-time contracts with more flexible work-patterns. We have to adapt to changes going on in the work-world, make more of ourselves by stepping out of our comfort zones, and break the false ideas about our potential and how we believe life is going.

Gain More with Cornerstone Skills

You may be well into your career, but feel like somehow, something is still missing. Or maybe you’re not entirely happy with where you’re at in your career path and feel it’s time to reflect and perhaps do something new. Or you might be thinking of retiring soon, and thinking about next steps after retirement.

The learning never needs to stop!

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This can be your chance to go after a dream or interest that you’ve always had (but never had the opportunity, or time, to pursue). This could finally be the time for you to create the change that you know you should have made ages ago.

Why not take the first step to learn about 7 important Cornerstone Skills, which will help take your life to the next stage?

Whatever situation you’re in, having these 7 Cornerstone Skills will no doubt equip you to tackle the challenges of life much more efficiently. Don’t let age, your limitations or a comfort zone stop you from seeking greater rewards and self-improvement.

Transformation and change is in your hands–you have the power to make big things happen, and we can help teach you the skills. Don’t let life pass you by! It’s time to pursue a fulfilling and happy life.

Featured photo credit: Joseph Chan via unsplash.com

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