Is Measuring Only Productivity Bad? Here’s What You Should Also Measure for Company Success
Managers in the modern workspace regularly attribute productivity as a core metric for improving an organization’s production, efficiency, and bottom line.
Employee productivity metrics are core to what we do, but many businesses and project managers get bogged down with fine-tuning these metrics to near-perfect performance. Instead, managers should look to company culture and what about your operations really matters to drive success.
Don’t fall into the trap of productivity.
What is the Productivity Trap?
When you look at your workspace when it is productive and operating efficiently, you see that you get more output for your input. Profit margins generally improve and we feel that we have achieved some level of success.
But some leaders in organizational management think otherwise and believe using productivity as one of the only successful metrics is a trap that can bring down even the biggest companies.
The argument is simple—measuring productivity alone, which is a relatively simple metric and important to organizations, is not an accurate representation of a business or employee performance. In fact, productivity is only a measure of the current operations and should only be looked at as a short-term indicator for whether workers are doing what they are supposed to be doing. Productivity metrics should not be ignored, but productivity should be measured in conjunction with other metrics and your company culture.
Viewing productivity measurements alone as an indicator of successes or failures is a big short-sighted risk that could put your company in danger. Additionally, the more that a productivity measurement is being pushed, the more likely your workers will resort to busyness rather than actually focusing on higher productivity, which should equate to producing a better product more efficiently. In general, focusing on productivity too much might not help you overcome your top productivity challenges.
How Tracking Productivity (Accurately) Improves Your Company
While we aren’t saying to not track your company’s productivity level, it’s important for businesses to understand how effective their employees are at executing their organizational strategy.
Your organizational strategy outlines the plan for how your business will allocate your resources to support business elements. In other words, how effectively is your business allocating its money, labor, and inventory to support its infrastructure, production, and marketing?
Which organizational strategy you deploy will depend entirely on your company goals and category. One size does not fit all in this regard. And, often, the wrong strategy being deployed could spell disaster for efficiency and workflow and cause issues for productivity. Therefore, addressing your organizational strategy will better attend to productivity goals and provide long-term solutions.
A successful organizational strategy will set out your organization’s direction, scope, and goals. Furthermore, the right organizational strategy will lay out how you can use the unique advantages available to your company to achieve success. With this strategy, you can break down your goals and better understand your directives rather than looking at productivity alone.
By implementing a company- or department-wide organizational strategy, you can define each goal relating to productivity more accurately. This might allow employees to do the right thing and focus on an important task first rather than focusing on being productive workers.
By walking your employees through the differences between core organizational strategy and the distraction of productivity, they will better understand your company goals and ultimately engagement.
What You Should Measure to Determine Company Progress
When it comes to understanding your company’s progress, look to past, current, and future metrics through the lens of organizational health.
Overall, organizational health looks at the functioning of your company in terms of prosperity and success vs. struggle and survival. You can take a few steps back to see if your company was taking staggering steps toward the end of each quarter or calendar year, or if it showed any type of progress or breakthroughs.
Organizational health is also determined by employee satisfaction, customer satisfaction, and partnerships. Studies have found engaged employees are more likely to be productive, with a potential to increase profits by 21%; this suggests that managing productivity controls alone might not work on its own. So focusing on employee engagement and happiness might be a better performance measurement in the long run.
Market health can also determine company success; this was highlighted most obviously in recent years because of the COVID-19 pandemic, which forced many businesses to reconsider a lot of their company structure and rethink productivity metrics.
As more businesses moved to remote settings, and more workers were sent to work-from-home, measuring productivity was on the backburner. And, as it turns out companies were still successful.
This forced many in the industry to reconsider what was driving success. Was it the amount of product that was pushed out? Or does it have to do with coming into work and tracking smaller successes? Market health can make or break even the best of companies, so it’s a vital factor to consider even when times aren’t tough.
Companies that are more adaptable are better able to take advantage of market unpredictability and opportunities. So while a hard-to-measure metric, adaptability is a much bigger win than a highly optimized and efficient workforce.
Adaptability also contradicts productivity because it requires businesses to break away from their normal operational workflow, slowing employees down to make room for the new mental capacities and processes.
However, adaptability can really open doors. Therefore, if you’re looking solely to productivity, then you’re likely less willing to be more adaptable and operationally vulnerable when your company should be.
Finally, we look at company culture. Productivity can also directly impact company culture, particularly negatively, if employees feel like they are being scrutinized and are less likely to feel happy at work and want to work. Therefore, focusing on improving company culture can also make strides towards your other organizational goals.
Tracking Company Success
During the shift to remote work, many organizations adopted remote employee tracking software to gain insight into how workers spend their time online.
Research from Skillcast and YouGov, 16% of large businesses use this type of tech or have plans to do so. A lot of companies are likely to keep this software going as it can provide critical insight into how time is spent. It also alerts companies to:
- Project, task, and resource allotment
- Budget constraints
- Project issues
- Personnel issues
- Communication overhead
- Indicators of poor company culture
- And a lot more
When used in the right ways, employee tracking software can be a useful tool for businesses and employee managers to understand how performance is fairing and where adjustments need to be made. However, when used improperly, employee monitoring can seriously hamper company culture, negatively impact productivity, and create additional concerns for the Human Resources department.
In reality, managing your metrics has a lot more to do with how your employees interact with the tracking software than with how the metrics are read. If your employees aren’t feeling trusted or they are feeling overworked, then you will likely see a lot of employee turnover–another key metric that most COOs are missing out on.
Instead of using productivity metrics to determine success, use them as a way to judge other
operational workflows. Whether your overall company progress is moving smoothly, take the time to dive into the company culture to learn about the shortcomings of your company. It could help you glean insight into operational improvements and organizational health, allowing you to better improve your company’s success in the long run.
By SoftActivity Team.