What Does It Mean?

Employee productivity measures how effective your workforce is over a set period. This HR analytics KPI tracks both efficiency as well as indicates different factors such as employee satisfaction and engagement.

Why Does It Matter?

Understanding your staff’s productivity is paramount for your bottom line and ongoing efforts designed to improve satisfaction. Productivity is an indicator of your workforce’s level of happiness, engagement, and belief in your company’s mission. Low productivity by itself may convey that your existing structure is not conducive to a positive workflow, but it can also highlight bigger cultural or corporate problems.

As such, employee productivity key performance indicators are a frontline measure for understanding the best strategies to help your team reach their full potential without forcing them to work longer hours.

See it in action:

How Do You Measure the KPI?

One of the most common ways to measure employee productivity (as an average) is to divide a company’s total revenue for a specific period and dividing it by the total number of employees.

While basic, it can be a strong starting point for measuring productivity. More comprehensive KPIs can include measures of quality of work per employee, production rate, manager satisfaction, and efficiency per employee.

What Sources Would You Use to Measure the KPI?

The employee productivity KPI can draw from varied sources including team performance, employee efficiency, absenteeism and attendance rates, as well as turnover and attrition rates.

Give Me an Example…

Imagine that after several months of solid production and growth, you notice that your output has greatly diminished in one of your core teams. Closer examination shows that they have been producing much less than normal, but that the amount of allocated resources and accompanying workflow hasn’t been adjusted much.

You can measure their employee productivity to determine where the problem is being harbored, and if their current performance compares favorably to the established baseline. This employee productivity key performance indicator can be the first step in uncovering where the problem is located, and how to resolve it. For instance, if hours worked haven’t changed, but you notice a significant increase in absentee rates, it may be a problem of satisfaction or poor scheduling.

What Benchmark/Indicators Should I Use?

Some useful benchmarks include:

  • Absentee rates
  • Attrition rate
  • 360-degree employee reviews
  • Satisfaction rates