When you are paying your employees by the hour, the old business cliché ‘time is money’ becomes particularly apt. But unless you are a manufacturing company, it can be difficult to tell what kind of return you’re getting from any particular employee. When you are able to see and track employee productivity, you can deploy your team more effectively and create more efficient schedules. So, how can you find out if an employee is pulling their weight or not?
Managing and quantifying productivity
Productivity can be calculated using a single, simple formula: output divided by input. Output is typically defined as the value of goods or service a company produces. Input is the combined costs of labour, overhead capital and materials.
Unfortunately where simplicity is concerned, people are not machines; the values arrived at via the aforementioned formula don’t tell the whole story. Imagine, for instance, that you have multiple sales associates who regularly achieve better results than the rest of their colleagues. Does it necessarily follow that those salespeople are also the most productive? While it’s certainly possible, measuring productivity in a team setting is often more complicated than that. Maybe, for instance, the ‘underachieving’ sales associates spend more of their time helping their fellow team members.
Having a look at the numbers is a good place to start, but it isn’t the only thing you should consider.
Develop a productivity plan
Not only can a productivity plan be a useful tool in evaluating employee performance, it can also help you find the most effective way to schedule your employees.
1. Identify your objective
Decide what you hope to change by measuring productivity. This change might be an improvement in sales numbers, better planning of employee schedules or attracting more new customers. Starting with your end goal can help you determine which aspect you should use as a unit of measurement.
2. Choose your input and output
For labour costs, the unit to be quantified is easy to identify: either the number of hours worked or the additional personnel costs.
Output is trickier. You could decide to use sales numbers, the number of positive reviews you receive from customers or the number of people who sign up. When determining the output, it’s useful to keep sight of your objective. If your goal is to improve service, for instance, you might opt to take the average waiting time as your output unit.
3. Find the average and compare!
Once you have determined the average, you have a baseline that can be used to compare results. For effective measurement, you should first establish a period of time, taking your specific industry into account. For example: if you own a restaurant or café, it’s probably a good idea to measure your weekend staff separately from the team that works during the week.
4. Dare to experiment!
Adjust your parameters and see what works. It can be interesting to compare the results of different employees who work the same shift but on different days. Be sure to compare the productivity of new hires with employees who have been with you longer as well. The more aspects you compare, the more new insights you gain!
5. Repeat
Measuring productivity shouldn’t be something you do only once. The productivity of your team is subject to change and depends on a wide range of factors. Only by conducting regular checks can you adjust your staff planning in response.
6. Delegate the work
Use intelligent software to generate overviews in a flash. Dyflexis makes it easy for you to monitor aspects such as the turnover per hour worked, labour costs relative to revenue and more. You can then apply these insights directly in setting up intelligent staff planning.
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