How to calculate productivity once and for all
We all have expectations for what's next in our business and for the employees we've hired to carry out these goals. Understanding what's realistic for your employees and how much work you should expect from them on a monthly or quarterly basis can set your entire business up for success. When everyone is on the same page and has reasonable goals to achieve, you can foster more motivation and productivity in your teams.
But what is productivity and how can you measure it? Let's find out.
What is productivity?
You've probably come to understand what a productive or unproductive day looks like for yourself based on the times you've gotten a lot done versus not. However, with all of the tools and knowledge your manufacturing staff have, how much work can you reasonably expect from them?
Productivity is the measure of work efficiency that a business' employees take on to finish more work in less time.
The actual calculation is the total output versus the total input, or how much product (for example) an employee can produce within their work day or even within an hour.
Why should you measure productivity?
Aside from making reasonable goals for yourself and your business, measuring productivity is essential for determining costs. Your employees are the most valuable assets of your business and also produce the highest expense. Measuring productivity ensures that you are getting the most you can from the investment put into your employees.
Measuring productivity against how much you need to make in a given time period can give you a good idea of how much to expect from your employees.
When you push these boundaries and ask your staff members to raise productivity levels with more efficiencies and incentives, you can gain a more competitive advantage. However, it's important to measure productivity appropriately to get the best results.
Instead of measuring productivity based on wages, it should focus on output or the capability to produce work quickly and efficiently. Look at how well your employees can put together a product or a service and still turn out a great end result that customers will love.
You want to be the business that is producing more units such as capital, labor or materials with fewer inputs like time and errors.
While the calculations and inputs vs. outputs do give you a better idea of expectations, there's still the human side of the business to consider. You need to understand the balance between working your staff to the bone, and creating efficiencies around the supply chain so they can thrive. Given all of the tools, knowledge and motivation you need to produce excellent work, you'll see your productivity numbers (and bottom line) begin to improve.