Understanding company productivity is essential for business success, whether you want to increase profitability, cut costs or improve employee well-being. Getting a comprehensive view of when, where and how work gets done across your organization brings significant advantages for decision-making, strategy and day-to-day operations.
Explore the multiple dimensions of company productivity and why your organization needs to see the complete picture of work to improve efficiency and your bottom line.
What is company productivity?
Company productivity is how well company employees turn inputs into outputs. This includes financial performance as well as how effective teams, processes and systems are in helping employees achieve goals. Company productivity is not just what individual employees, teams or departments accomplish – it also refers to the bigger picture of productivity across the organization.
Inputs and outputs are different for every organization. For example, a manufacturing company might measure the number and cost of materials used (inputs) compared to the finished products made (outputs). They may also look at how many leads it takes for a salesperson to make a sale. Software engineers would look at how much time went into completed projects. However, many organizations focus on single metrics without seeing the full picture of not just how much time was spent, but how that time was spent.
High levels of productivity show a company is not just busy but is also using its resources effectively to maximize returns. External factors like market conditions and regulatory changes also influence productivity. A company that understands the full picture of internal and external factors and their impact on productivity is more agile and responsive in its strategies.
Why is it important to have a full picture of company productivity?
Getting a full picture of company productivity benefits the organization by improving decision-making, performance, rewards systems, employee engagement and resource utilization. Taking a broad view of company productivity shows you how the organization is doing overall rather than focusing too much on specific teams or individuals. This also supports company-wide changes that benefit the entire organization. Integrating various aspects of operations, including employee performance and customer satisfaction, empowers leadership to create a dynamic framework that drives productivity and enhances overall business resilience.
Enhance decision-making
With accurate data and insights on productivity in the workplace, leaders make more informed decisions that align with overall business strategies. This data-driven approach minimizes the risks associated with guesswork and empowers companies to pivot quickly in response to market changes. When you focus on the productivity of individuals or teams rather than the whole organization, the partial view of productivity may lead to false assumptions and negative outcomes.
Improve performance
A complete view of company productivity shows leadership areas that aren’t meeting performance expectations and why. Organizations that track productivity metrics beyond simple hours worked gain deeper insights into why employees aren’t meeting performance goals. This leads to a greater focus on improving areas that need more attention through extra training, targeted coaching or increased headcount.
Provide better rewards and recognition
Company productivity data gives managers insight into which employees exceed expectations and deserve rewards or recognition. From an organizational perspective, this makes performance reviews and career development more transparent and gives employees clearer goals to work toward. When you know how employees work best, you’re more likely to give better feedback than “work harder”, including guidelines and benchmarks from the best employees to show how others can increase productivity.
Improve employee engagement
Employee satisfaction goes hand-in-hand with employee engagement, which affects company profitability through creativity and commitment to work. Measuring company productivity gives leadership insights into the full work environment to see where productivity may be impacted. Drops in employee engagement may indicate serious issues across an organization, like problems with work-life balance or burnout. With a full view of productivity, supervisors and leaders easily spot these issues early to respond quickly and prevent disengagement from spreading.
Minimize unnecessary costs
Reducing waste and cutting costs is a main benefit of understanding company productivity. For example, your organization can cut costs by determining if a technology isn’t being used effectively or doesn’t help employees enough to justify its cost. Additionally, companies that track the productivity of office vs. remote workers may find potential cost savings if they learn remote workers are more productive. Because real estate and office leases are often the biggest expense a company has, selling an office, moving to a smaller space or reducing the number of days employees come in can greatly reduce costs. Finally, companies that understand bottlenecks and barriers to productivity like inefficient processes or employees more easily implement changes to reduce waste.
Risks of having a partial view of company productivity
Relying on a partial view of productivity can lead to significant risks including inadequate strategies, missed opportunities, lower employee engagement, higher turnover and more waste.
Misguided strategies and missed opportunities
Focusing on isolated productivity metrics results in strategies that don’t align with overall organizational goals. For example, organizations that only measure productivity when specific team members don’t hit performance standards may miss issues that impact full business productivity, like poor technology or failing processes. Additionally, focusing solely on certain aspects of productivity rather than the full picture may lead to strategies that don’t contribute to long-term success. For example, focusing solely on hours worked compared to goods or services produced may encourage leadership to encourage employees to work more hours. By tracking deeper productivity metrics, such as how much time is spent in unproductive meetings or on distracting technology, the organization may develop better processes to improve productivity based on root issues.
Underappreciated employees
Many organizations turn to productivity monitoring when they notice poor performance or results. Focusing on low performance means high-performing individuals may go unrecognized and start to feel underappreciated. At the same time, without comparing high-performance and low-performance activities, the company misses out on better guidelines or coaching to boost productivity for everyone.
Burnout and turnover
Burnout is a major concern for businesses today. Organizations that don’t track company productivity may not see the signs of burnout early enough to stop it or know what’s causing it in the first place. This leads to employees who underperform because they’re too exhausted or just don’t care about the organization. Left unchecked, burnout and disengagement can spread to others throughout the company leading to quiet quitting or increased turnover.
Wasted expenses
Without measuring company productivity, your organization may miss wasted expenses such as unused real estate, poorly used equipment or technology or inefficient processes. Long overtime hours and unproductive time also cost the company money and hurt employee morale, which creates a vicious cycle of decreased productivity and waste.
Measure and improve company productivity with ActivTrak
Transform your organization’s efficiency and well-being with ActivTrak’s workforce analytics platform. Gain insights across people, processes and technology to measure productivity holistically across your organization. Get a full understanding of productivity including hybrid and remote workforce management, full productivity measurement, employee engagement markers and more. Take the first step towards a more productive and successful organization by contacting our sales team today.
