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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

More by this author

David Carpenter

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

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Last Updated on May 24, 2019

How to Be Productive at Home and Make Every Day a Productive Day

How to Be Productive at Home and Make Every Day a Productive Day

If you’ve ever wondered how to be productive at home or how you could possibly have a more productive day, look no further.

Below you’ll find six easy tips that will help you make the most out of your time:

1. Create a Good Morning Routine

One of the best ways to start your day is to get up early and eat a healthy breakfast.

CEOs and other successful people have similar morning routines, which include exercising and quickly scanning their inboxes to find the most urgent tasks.[1]

You can also try writing first thing in the morning to warm up your brain[2] (750 words will help with that). But no matter what you choose to do, remember to create good morning habits so that you can have a more productive day.

If you aren’t sure how to make morning routine work for you, this guide will help you:

The Ultimate Morning Routine to Make You Happy And Productive All Day

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2. Prioritize

Sometimes we can’t have a productive day because we just don’t know where to start. When that’s the case, the most simple solution is to list everything you need to get accomplished, then prioritize these tasks based on importance and urgency.

Week Plan is a simple web app that will help you prioritize your week using the Covey time management grid. Here’s an example of it:[3]

    If you get the most pressing and important items done first, you will be able to be more productive while keeping stress levels down.

    Lifehack’s CEO, Leon, also has great advice on how to prioritize. Take a look at this article to learn more about it:

    How to Prioritize Right in 10 Minutes and Work 10X Faster

    3. Focus on One Thing at a Time

    One of the biggest killers of productivity is distractions. Whether it be noise or thoughts or games, distractions are a barrier to any productive day. That’s why it’s important to know where and when you work best.

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    Need a little background noise to keep you on track? Try working in a coffee shop.

    Can’t stand to hear even the ticking of a clock while writing? Go to a library and put in your headphones.

    Don’t be afraid to utilize technology to make the best of your time. Sites like [email protected] and Simply Noise can help keep you focused and productive all day long.

    And here’s some great apps to help you focus: 10 Online Apps for Better Focus

    4. Take Breaks

    Focusing, however, can drain a lot of energy and too much of it at once can quickly turn your productive day unproductive.

    To reduce mental fatigue while staying on task, try using the Pomodoro Technique. It requires working on a task for 25 minutes, then taking a short break before another 25 minute session.

    After four “pomodoro sessions,” be sure to take a longer break to rest and reflect.

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    I like to work in 25 and 5 minute increments, but you should find out what works best for you.

    5. Manage Your Time Effectively

    A learning strategies consultant once told me that there is no such thing as free time, only unstructured time.

    How do you know when exactly you have free time?

    By using the RescueTime app, you can see when you have free time, when you are productive, and when you actually waste time.

    With this data, you can better plan out your day and keep yourself on track.

    Moreover, you can increase the quality of low-intensity time. For example, reading the news while exercising or listening to meeting notes while cooking. Many of the mundane tasks we routinely accomplish can be paired with other tasks that lead to an overall more productive day.

    A bonus tip, even your real free time can be used productively, find out how:

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    20 Productive Ways to Use Your Free Time

    6. Celebrate and Reflect

    No matter how you execute a productive day, make sure to take time and celebrate what you’ve accomplished. It’s important to reward yourself so that you can continue doing great work. Plus, a reward system is an incredible motivator.

    Additionally, you should reflect on your day in order to find out what worked and what didn’t. Reflection not only increases future productivity, but also gives your brain time to decompress and de-stress.

    Try these 10 questions for daily self reflection.

    More Articles About Daily Productivity

    Featured photo credit: Unsplash via unsplash.com

    Reference

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