Productivity as a topic has never been more popular than today due to the rapid advancement of remote and hybrid work.
During the pandemic, we were more productive than ever. A division of Microsoft, for example, saw a 1.5% increase in the number of features checked in by developers per hour and a 6% increase in focus time.
But during the first half of 2022, productivity reached its lowest point since 1947, especially in the private sector. To address this decline, CEOs like Sundar Pichai of Google and Mark Zuckerberg of Meta have pledged to take action by identifying and addressing underperformers, possibly offering long-serving employees a severance package.
Many managers wonder if, now that offices can reopen, work from home is to blame for some reduction in how productive we are.
What is employee productivity?
Employee productivity is the measure of how effectively an individual accomplishes a task. It refers to the ratio of output (goods and services) a company produces compared to the inputs (such as labor, capital, energy, or other resources) used to deliver them.
Why is employee productivity important to business?
Companies prioritize productivity for three main reasons.
Firstly, it directly impacts their profitability and competitiveness in the marketplace. When a company is more productive, it can produce more goods and services with the same resources, increasing its revenue and profits.
Secondly, it can save costs by reducing the need for additional labor, equipment, and other resources.
Lastly, it helps companies meet their customers' demands and compete more effectively with other companies in the industry.
These reasons are why companies often want to improve their productivity by optimizing their processes, investing in new technology and equipment, and providing training and development opportunities to their employees. And not surprisingly, it's also why managers get frustrated when productivity declines.
Loss of employee productivity can have severe consequences, such as the inability to deliver to customers. Maximizing employee productivity is therefore everyone's responsibility, from junior team members to C-level executives.
How to measure employee productivity?
Companies generally set expectations for employee productivity, and employees are expected to complete a certain amount of work within a specific timeframe.
For instance, in a factory manufacturing auto parts, employees may be expected to complete the assembly of a targeted number of finished pieces per workday. In a sales team, SDRS and Account Executives will often have daily targets. And almost all employees have deadlines and KPIs.
True measurement however, is often problematic.
Productivity was always hard to measure, as it's traditionally either self-reported (asking people if they feel productive) or based on employee activity data, like counting the number of emails sent or lines of code written. Either are not super indicative of the kind of productivity we care about.
Because these measures can be fairly subjective, it’s no wonder that Microsoft reported that while 87% of employees report that they are productive at work in a hybrid work environment right now, 85% of managers believe the opposite. This discrepancy is what Microsoft calls “productivity paranoia.”
87% of employees report that they are productive at work in a hybrid work environment right now, 85% of managers believe the opposite.
LinkedIn CEO Ryan Roslansky said in an interview with Harvard Business Review Idea Cast that “when everyone was in the office years ago, the job of a manager, you’d walk around. That’s how you’d see if someone was productive or getting work done.”
Below are six ways to measure productivity:
A common way to measure productivity is time tracking, for example with tools like Time Doctor or Clockify. These desktop apps record minute-by-minute what people are doing and whether that's productive. Employees can further assign time to various projects, similar to the above-mentioned agency method.
Remote and hybrid companies could take a page from software development teams. In these teams, the workload is listed out very clearly, and individual contributors assign "story points" to each task – how long they expect them to take and then when the work begins, management has insight into whether tasks are completed on time and, therefore, if teams are as productive as expected.
A more reactive way is to analyze actual time spent through reporting. For creative agencies and law firms, this is the most common way to measure. Set job codes for each project, including general administration, and have employees submit reports on their time spent. Management can see how many hours are worked and what time is spent on.
Companies can set OKRs or KPIs throughout the organization and let everyone set and complete certain goals. The level of detail is less than the software model, but it does allow companies to track productivity in the number of goals completed and increase alignment with company priorities. A downside is how long it can take to set and track goals.
Track how well employees collaborate and communicate with each other. This can include measuring response times to emails and messages, tracking the number of meetings attended, or using tools like Slack or Microsoft Teams to monitor team communication.
Going back to how productivity is measured typically, encourage employees to provide feedback on their own productivity and that of their colleagues. This can provide valuable insights into how work is being done and help identify improvement areas.
How do we define productivity improvements?
Improving employee productivity can be achieved in two ways: helping employees to work faster or more efficiently, or making their work more enjoyable, resulting in a higher-quality end product.
Any improvement that your team aims to achieve should fulfill one of these requirements, as failing to do so may miss the point entirely.
How to improve employee productivity for hybrid and remote teams
Remote and hybrid remote work can present several challenges to productivity, especially on work-from-home days. Some of these challenges include:
- Difficulty maintaining communication and collaboration: When employees work remotely, it can be harder to maintain the same level of communication and collaboration as when everyone works in the same physical location.
- Distractions and lack of focus: Remote workers may find it harder to focus and stay on task as they work in an environment not optimized for productivity, such as a home with children or other distractions.
- Lack of structure: Without the daily routine of commuting to an office, remote workers may find it harder to establish a consistent schedule and routine, leading to decreased productivity.
- Difficulty maintaining team morale and culture: When employees work remotely, it can be harder to maintain the same sense of team cohesion and culture as when everyone works together in an office.
- Technical issues: Remote workers may face technical issues like poor internet connection, outdated technology, or malfunctioning equipment, which can affect productivity.
These challenges affect managers, who must adapt their management and supervision styles to support and encourage productivity in remote and on-site environments.
Qualtrics recommends a three-pronged model to think about employee productivity and how to improve it:
- The number of tasks completed (quantity)
- The quality of the finished work
- How much effort is wasted
7 Employee Productivity Improvement Measures To Try
1. Redefine productivity
In the hybrid and remote age, team members will work differently than before. Tapping into the benefits of work-from-home days, they may work different hours than in an office setting. This is to be expected and to be embraced.
In her great HRB article “Let’s Redefine “Productivity” for the Hybrid Era,” Chief Scientist Jaime Teevan suggested a new way to look at productivity. She remarked how starting from the lockdowns; she got used to working many smaller moments throughout the day – especially since she had to take care of multiple kids at home.
She shared: “I began to imagine what we could do if we used the micro-moments we have each day productively. This led me to develop approaches to algorithmically break tasks down into micro-tasks that fit more easily into the fragmented way we actually work. The resulting concept, which we call microproductivity, expanded the way we think about productivity at Microsoft.”
In short, let people be productive how they see fit, focused on the final outcome rather than the 8-hour workday we're used to. Famous remote companies have always been set up this way, for example, Gitlab, which made an early pivot to outcomes, not hours behind a computer.
Ask yourself and your leadership team: what does productivity mean to us?
2. Set clear desired outcomes
LinkedIn CEO Ryan Roslansky said that managers subjectively measuring productivity should be a thing of the past. "The role of a manager was just to make sure that you’re there and that you’re physically present. As we move to a hybrid world, we require a much different management and leadership style."
It has to be based on whether or not someone is being effective at the job. The team goal should be aligned with the company’s (annual or quarterly) goals. Then, clearly articulate how individual team members should perform towards those goals and how their progress will be measured. Finally, communicate it to your team members.
3. Check in regularly
As mentioned in the 'software development' model, regular check-ins are more important when team members work from home. Even if priorities are aligned initially, things tend to drift off over time. Start with a weekly meeting in which you set the priorities for that week. Then, check in daily to see who's getting stuck and where you can help.
4. Focus on the Mission, Vision, and Culture
Goals can be very transactional and not align with the internal motivation that creates great, engaged, employees. Don’t overlook the importance of continuously messaging the company's mission, vision, and culture.
Corinne Murray from Agate, for example, advocates for a new focus on “time well spent,” as coined by Aransas Savas and Dave Norton. This is a new metric for companies to consider, where companies need to be intentional and deliberate about how their employees spend their time, not just to work but to do other tasks.
Ways to continuously activate include Core Value awards, mission-focused Total Rewards, leadership talks, training, and more. You can also tap into Ice Breakers to liven up team meetings and connect people beyond the daily work.
5. Limit Meetings
Especially with microproductivity and the ability to plan out your days, be careful with meetings. In his classic essay “Manager’s Schedule versus Maker’s Schedule,” VC Paul Graham warned of meetings as the ultimate productivity-killer.
A meeting that disrupts the flow of a remote day can be very disruptive and, as Pingboard’s Christie Hoffman noted in her latest podcast on “Tips for a Better, More Productive 2023,” very expensive.
I suggest following the example of Shopify, which recently scrapped the majority of meetings. In the words of their CEO Harley Finkelstein: “Yesterday, Shopify got rid of ALL recurring meetings of more than three people. Approximately 10,000 calendar events were deleted yesterday from our employee calendars - approximately 76,500+ hours of meetings. Read that number again.”
Ensure your meetings have a clear Format, Agenda, Invitee List, and Report following, also known as the F.A.I.R. framework of cutting meeting time in half.
6. Provide the right places (plural!) to be productive
Hybrid work is a spectrum of places and working styles. Companies should look into workplace options beyond home or office to combat distractions and lack of focus. Just because I can't focus at home doesn't mean I want to visit our big downtown HQ!
Dave Cairns, a real estate thought leader, noted that “the productivity gains of #ReturntoOffice are often an illusion,” with the classic example of people commuting to an office to go on Zoom calls. He proposes to empower employees to choose their place to be productive.
Offering a central office and a network of coworking spaces creates happier employees. The employee choosing where to work also helps companies gather data that allows them to better match the product (workspace) with the “consumer” (employees as the consumers of the workspace) preferences. Finally, it also gives companies the “ability to right-size the product that is in less favor (the central office.)”
7. Prioritize New Employees' Onboarding
Salesforce co-CEO Marc Benioff told employees in a Slack message that the company’s newest hires aren’t being productive enough, and he asked for feedback on why that’s the case. He asked this in the context of not being in an office full-time anymore: “Are we not building tribal knowledge with new employees without an office culture?”
Salesforce, the biggest private employer in San Francisco, was among the first tech companies to tell its workforce they didn’t have to return to the office. Last year, Salesforce acquired the communications app Slack, and Benioff said people could work very effectively from their homes. Salesforce said it would let teams decide how much time they would be in the office.
Even before hybrid work, onboarding has been tough for most companies. Only 29% of new hires felt fully prepared and supported after being onboarded. And almost 10% of employees left a company because of a poor new hire experience. Onboarding is more important than ever, as we miss the little moments in the office when we get ready for the new role. Key tips include:
- Engage them immediately and make expectations clear.
- Focus on the employee-manager relationship.
- Provide an onboarding buddy.
Measuring employee productivity of remote workers
One remaining question is whether you should monitor remote teams – especially those employees you don't see.
Time tracking tools like Time Doctor or Clockify can be a helpful tool to analyze whether people spend their time productively, which ultimately creates a better employee experience, as we are motivated by meaningful achievement. However, when used to 'spy' on people, it removes trust, one of the key pillars for positive employee engagement and retention.
There is no need for hourly tracking in many of the measurement options above, but if it fits your purpose, you may consider it.
Microsoft made a strong stance against work surveillance, saying that it can have a deleterious effect on trust and employee engagement. Instead, they focused on improving various aspects of hybrid work as they allow their employees to work from home half the time.
Tools to boost productivity
Many tools can help boost productivity. Here are some of our favorites:
Collaboration and Communication:
- Slack or MS Teams – popular team communication tools
- Mural – a virtual whiteboard to foster collaboration
Project Management, Task Alignment:
- Asana – an industry-standard project management tool
- Small Steps – an AI-powered "Google for Projects" tool
- Lexi Daily – a daily alignment tool to keep teams on track
- Calendar Cleaner – Chrome plugin to reduce meetings by 30%
- Fireflies – an AI notetaker that can take meetings on your behalf
- Pingboard – a leading social onboarding platform
- Gnowbe – tool for sharing knowledge
- Notion - a no-code user-friendly tool to build company's wiki
These tools can help remote teams communicate and collaborate effectively, stay organized, and maximize productivity. Still, tools can only help execute strong strategies and processes, so we encourage every team leader, manager, and business owner to start there.