9 Ways to Measure Employee Productivity & Not Fret About It Anymore

Measure employee productivity

If you ever contemplated effective ways to measure employee productivity, you won’t be the first one to do so.

Measuring employee productivity is a vital component of HR. To that end, any level of performance that is not measured cannot be improved. The only problem is that “performance” itself is sometimes not easily measurable due to different variances in the workflow.

The good people over at your HR department are constantly in search of best practices for their organizations. Measuring employee productivity is one of those practices.

Let us start by clearly stating what is meant by productivity and more specifically, employee productivity:

What is Productivity?

It is a result of measuring someone’s efficiency to do work against time. It can be used in different terms such as employee’s productivity, company’s productivity, etc.

Why Does It Matter to Measure Employee Productivity?

According to Opus Energy, 86% of UK SMEs believe productivity is an issue. That is a significantly big number for a country whose economy is dominantly dependent on SMEs.

Employee productivity is a lot vital than some companies take it to be.  A bad client call can result in a dissatisfied customer. And such a customer can do a lot of damage to the company.

The 3 Best Methods to Measure Employee Productivity

As we have just cited an example of SMEs, it would be appropriate to talk about how they measure employee productivity performance.

Measuring employee productivity is easier said than done. HR has to determine the factors against which productivity will be measured.

Not all employees have the same task. Therefore, coming up with a fair measure for all is quite a challenge.

Few of the best methods to measure productivity in SMEs are:

Method 1: Management by Objectives

management by objectives

To use this method accurately, you must give your employees specific goals and targets to achieve, regarding every task, and then measure their productivity based on their output results that how well they are contributing towards the company’s objectives.

The following points must be kept in mind while implementing this method:

  • Set your objectives, and consider what you have to do to enhance employee’s productivity
  • A supervisor must be available to provide support and solutions to any problems that the employees may always encounter
  • An evaluation has to be done regularly to track the progress of the current objective

Method 2: Measuring Quantitative Productivity

quantitative productivity measurement

The quantitative measurement method is an easy and straightforward way to measure employee productivity depending on how many parts, applications, products, or calls an employee can process per hour, day, or month.

To access the employee’s productivity, you must consider all factors, including the training time, parts that came broken, fixing time, and lunch breaks.

Productivity can be measured using productivity software and calculating the average production of the day or productivity of each employee per hour, day, or month.

It is a convenient method for small organizations or small businesses. Measurable data is the best form of data.

Method 3: Measuring Productivity by Profit

measure productivity by profit

It is one of the most effective tools for measuring employee productivity performance. Small to medium-sized companies or businesses prefer this way to measure their employee’s productivity.

It is way easier to measure employee productivity by tracking the revenue than to track each employee. If the revenue is increasing, that means the employees are more productive, as simple as that.

As business consultant Roger Bryan of RCBryan & Associates says, “Watch the money, and everything will fall in line”. Michael Hsu, the founder of DeepSky accounting firm, reportedly agrees to this methodology. “Results and value-add trump hours of work any day of the week” he believes.

This is the modern age. You can always get help from technology.

Here are Best Tools to Measure Employee Productivity:


There are amazing software to track down employee tasks, performance, and productivity. Some of these cool tools are:

These programs manage projects excellently. They keep track of individual tasks and performance by measuring the time taken to complete a task and comparing the expected and actual results.

Moreover, the PM software is perfect for measuring employee productivity by profit. The tools single out the problem areas for project managers to work on. Also, they allow a smooth flow of information among the project team.

The tools mentioned above are a great way to conclude how much each employee contributes to the company’s success or failure.

For HR, this is also imperative for employee succession and career plans. The greatest motivation for any employee is praise for work in the form of a reward.

Measuring employee productivity enables managers to reward deserving employees, which is a strong motivational factor for employee performance.

These methods are not just limited to SMEs. They can be used in any workplace to measure employee productivity efficiently.

Now that you know all about measuring employee productivity take a look at the top ways to measure employee productivity at a workplace.

9 Best Ways to Measure Employee Productivity:

The following methods are one of the best when it comes to the accountability factor on behalf of any number of employees. Old-school managers have tried them and come up with positive results in the past.

Why don’t you give it a shot as a project or program manager in your office?

1. Establish a Baseline

The first and most important thing to do before measuring employees’ productivity is to set some standards for every position that what is the expected output for this task.

We can also put it this way that a set target should be given for specific tasks.

This way, the employees will know what is expected of them and will provide more clarity for both employers and employees.

2. Define and Measure Tasks (Not Hours)

Explain the set measurements or targets regarding specific tasks to the employees to get a more comprehensive picture of the story.

For example: how many applications can be processed per day, how much time each customer consumes over the phone, how many refund cheques can be issued in a day.

Measure the least a person can do in a single day and set it as a standard.

Check this out to set your business metrics: 

64 Important Business Metrics Your Company Must Know

3. Set Clear Objectives and Goals

Examine how the employee’s productivity can contribute to reaching the company’s goals and set the standards according to that. Evaluate employee’s productivity regularly.

4. Carry Out a Client Survey to Getting Insight

A client survey is a good tool to measure employees’ productivity. The client’s feedback can help to track down both good and poor performances given by employees.

5. Consider Culture

The culture within a business is also an important factor to enhance employees’ productivity. Culture can also be referred to as the company’s ethical or moral values, how you treat your employees and clients, and the working environment of the workplace.

This can be done by doing an employee’s survey on how they feel about working for the company or by looking at other company’s culture blogs. Happy employees contribute more to the betterment of the organization.

6. Identify Benchmarks and Targets

Mostly, positions have built-in benchmarks, but some companies prefer to change their benchmarks with relevance to their target and objective.

This will tell the companies to evaluate their employee’s productivity and what are the factors that the employee is not able to achieve the goal.

For example, the customer service representative cannot reach its goal, which is to receive at least 60 calls per day. But the number of calls depends on how much time each customer takes, which is not in his control.

Considering this, employers might have to lower the productivity target.

Find top productivity apps here: 

The Best Productivity Apps Review

7. Track Individual Progress

To track individual progress is also especially important, especially for bigger companies where they have many employees. To determine who is being productive and who is just procrastinating.

8. Request Daily Updates

Requesting updates from the employees at the end of the day is an excellent tool to keep them on track and let them acknowledge that they are accountable for their work.

Usually, employees prefer working at their own pace, but this can encourage them to procrastinate, which will lower their productivity.

That’s why it is important to ask for daily updates to keep the employees motivated and on track.

9. Account for the Human Factor

The human element is always a factor that holds great importance in the company’s productivity as a whole.

No matter what measures we take to enhance the employee’s productivity or track it down, there is always one employee who just doesn’t want to work and is always procrastinating. Then some employees give every kind of work their best shot regardless of reward or appreciation.

Each employee brings a unique set of innovative ideas and capabilities to the table and is a valuable asset to the company’s growth and progress.

The best productivity books: 

The 25 Best Productivity Books to Unleash Your Absolute Best

What’s Employee Productivity for You?

The approach on how to measure the employees’ productivity is vastly changing in every industry. Employers are relying more on technology than on manpower.

The reason for this is a competitive advantage. It can only be obtained through employees, not machines.

One cannot debate the fact that employees play an important role in the company’s growth and progress. Productivity is an important part that leads to the pathway of success and growth.

So, start working on your employees’ productivity now to stand out from the competition.



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