How to Measure Employee Productivity

That’s a question I’ve been asked many times and in many different ways over the years. Apparently time and service are not as tangible to people as goods and inventory are. But that doesn’t mean they can’t be measured and tracked. In talking to a client about this recently, I found he didn’t really understand why we were tracking production in the first place, so he was having a hard time thinking this thing through. What I’m giving you here is the gist of what I told him.

You may have noticed something interesting: living things grow. When they stop growing, they start dying. An organization is very much like an organism in this regard. Both are living things and both must grow in order to survive.

Now, the parts of an organism need to grow proportionately. Imagine what would happen if your head grew twice as fast as the rest of your body. You’d be in trouble for sure. The same principle is true of an organization. If your expenses continue to grow twice as fast as your income, you won’t be in business long.

So, in order to ensure the different parts of an organization grow proportionately, we have to have a way to measure and track the quantity of production in those different parts. We’re talking now about statistics, or “stats” for short. We need to track, not just the business as a whole, but each section and each individual in it.

The key to statisticizing a service is to focus on the end product of the service, the thing you are getting paid for. If you are a car repair technician, it’s a properly functioning car. If you are a physical therapist, it might be a better functioning shoulder. If you are a receptionist, it could be a properly handled and routed customer.

I think you will find that once you understand the purpose of keeping statistics, and have clearly named the valuable final product you are trying to statisticize, it will be fairly easy to come up with the statistic that measures it. Give it a try and let me know.