Measuring employee output has historically been focussed on quantifiable results such as the number of hours worked, the time taken or the volume of work produced. A productive employee was seen as someone who worked hard and put in the hours. But the sudden shift to remote working during the pandemic and the consequent productivity gains have highlighted the limitations in the way we’ve traditionally viewed employee output.
In this guide, we explore the way in which measuring employee productivity has evolved, and we also provide advice on how to measure employee output as well as how to avoid demotivating and disengaging your team.
We will cover:
- What is employee output?
- What impacts employee output?
- Why is it important to measure employee output?
- The normalisation of home working and the impact on measuring employee output
- Ways to measure employee output
- Tips for measuring employee output
What is employee output?
Employee output refers to the value generated by an individual or group of employees, which will differ depending upon the nature of the job role and organisation. In some roles, it’s easy to identify the value the employee generates. For example, in a manufacturing environment, a factory worker’s output may include the volume of the products produced. In a contact centre, a customer service advisor’s output could include the number of customer queries processed.
In other roles, the desired employee output may be more subjective and harder to articulate. For example, a teacher’s output will inevitably include exam results. However, most people would agree that the role involves far more than exam results, such as safeguarding, supporting the emotional wellbeing of students, addressing behavioural issues, assisting families in poverty and supporting children with special educational needs and disabilities.
What impacts employee output?
There are a range of different factors that can impact an employee’s productivity including:
Role clarity
Gallup recommends establishing and setting clear expectations and goals to ensure employees understand what they need to achieve. Imagine starting your day without a clear idea of what is expected of you— according to Gallup research, this is the reality for 40% of workers.
Autonomy to make decisions
Autonomy has been found to be a key driver of employee motivation and performance as it is a great motivator for fulfilment and success.
Psychological safety
Teams that don’t have high levels of psychological safety are unlikely to achieve their full potential: creative ideas go unsaid; valuable feedback isn’t communicated or heard; mistakes are hidden; and learnings aren’t shared. You can learn more about psychological safety here.
Regular communication and feedback
Frequent performance conversations will enable employees to perform at their best and will also encourage a trusting relationship to develop.
Feeling valued
Celebrating success and providing recognition where it is due will ensure employees feel valued for the contribution they make.
Learning and development
Providing opportunities to learn will enable employees to develop their skillset and capability. This could include external training sessions, on-the-job learning, project work, coaching or mentoring.
Employee wellbeing
It is now widely accepted that employee wellbeing has a direct impact on performance levels.
Drive your team’s performance through wellbeing.
Job demands
Extreme job demands (such as excessive workload or pressure) can result in work-related stress and burnout, which is likely to impact work performance and absenteeism.
It’s not just work-related factors that affect employee output. Personal issues can also play a role, including physical and mental health issues, relationship conflict, bereavement, financial stress and caring responsibilities for relatives or children.
Why is it important to measure employee output?
If it’s done well, measuring employee output can increase productivity and business performance. We are all familiar with the saying ‘what gets measured gets done’.
The CIPD suggests that on an individual level metrics can be used to set clear goals for employees, to motivate them, keep them focussed and hold them accountable. The data can also be used when making decisions on training needs, pay increases and promotions.
Furthermore, measuring employee productivity enables leaders to make informed decisions about the allocation of resources, ultimately impacting business performance.
As Forbes states, ‘the simple act of measurement increases motivation to perform’.
The normalisation of home working and the impact on measuring employee output
Prior to the COVID-19 pandemic, just 12% of workers worked from home regularly. Many businesses were wary of homeworking due to concerns about the impact it would have on productivity and business performance. There were also concerns about the challenges it would pose in terms of tracking employee output when employees were not physically present in the office. Some businesses were distrustful of employees, fearing they would take advantage of being ‘out of sight’. This challenge extended to tracking employee attendance, with many organisations struggling to implement reliable methods to ensure that employees worked their hours and maintained productivity while working remotely.
The pandemic normalised home working, with 49% of workers working from home at least some of the time. Normal hours of work went out the window as employees juggled work responsibilities with homeschooling and childcare. Employees were given much more autonomy over how and when they worked. While home working peaked during lockdown, levels have continued to remain high with 40% of workers working from home at least some of the time in February 2023.
Despite concerns about the potential impact on business performance, research has shown that home working during the pandemic resulted in productivity gains, not losses. This has triggered an evolution in the way that we think about and measure employee output.
Traditional models of employee productivity focus on ‘quantifiable’ results, i.e., the units made, the number of hours worked or the activities completed. During the pandemic it was no longer possible to ‘observe’ employee outputs. Managers couldn’t watch tasks being completed or see how much time was spent in the office or on each project. The limitations of the traditional approach to measuring productivity are now being acknowledged.
Assessing how many hours an employee spends on completing a piece of work is not an accurate measure of productivity on its own as it doesn’t reflect the quality of the work or the customer experience.
The pandemic encouraged us to refocus productivity from outputs to outcomes, contribution and value. Instead of prioritising presenteeism and long hours worked, there has been a shift in mindset to providing employees with ‘trust and autonomy to make choices in how, when, and where they work that make them most productive’. As Deloitte states,
‘It is outcomes rather than outputs that drive business success… Shifting to measuring accomplishments and outcomes over activities and labour hours allows organizations to cultivate a work environment of high-performing and productive teams. Focusing on outcomes in this way, in addition to trusting employees to achieve them, will lead to increased work effectiveness.’
Ways to measure employee output
Traditional methods of measuring productivity are quantifiable and focus on an assessment of outputs or activities. Examples include: number of products made/sold; volume or cost of wastage; time taken to complete work; number of defects; hours worked; absenteeism; number of calls made; and injury rate.
As discussed, there has been a recent shift towards a measurement of outcomes rather than outputs, often involving a qualitative assessment.
Ask the following:
- how has the employee performed against their agreed goals, objectives or KPIs?
- have projects been completed by the relevant deadline?
- what is the quality of the work?
- has the employee demonstrated the company values?
- what is the feedback from colleagues, customers or clients?
The CIPD also recommends measuring contextual performance (i.e., activities that go beyond one’s job role, such as coaching junior colleagues) and adaptive performance (i.e., the ability to respond to unexpected changes, such as crisis situations) when assessing employee output.
How to measure employee output: Our tips
The reality is measuring employee output is complex, regardless of whether an employee is office based or a remote worker. It also runs the risk of demotivating and disengaging your team if it isn’t done well. Here are some tips to help you get it right:
Measure what matters
Invest time and energy into identifying the value that each role can add, before selecting how best to measure productivity.
Carefully select a combination of metrics
One single metric is unlikely to provide an accurate assessment and could mean that an individual’s unique skillset goes unrecognised. Instead, we recommend using a combination of quantitative and qualitative metrics, identifying those that are the most relevant to the job role.
Take a collaborative approach
Involve your team members in identifying the relevant productivity measures. Afterall, they know the role best of all. Taking a collaborative approach will mean that employees are more likely to accept the measures and to view them as fair.
Transparency
To avoid demotivating your team, make sure you are transparent about the productivity metrics used and the reasons why they have been selected.
Trust your employees
As mentioned earlier, research has shown that home working during the pandemic resulted in productivity gains not losses, despite concerns that employees may not work as hard when away from the office. The reality is that the vast majority of employees will reward the trust you place in them.
Stay away from surveillance monitoring!
Steer clear of surveillance or productivity monitoring software as a way of tracking employee output. All this will do is destroy the trust in the relationship. Productivity is not about how many minutes are spent online.
The Equality Act
Don’t forget your obligations under the Equality Act to make reasonable adjustments for disabled employees to ensure they are not disadvantaged. Depending on the circumstances, this could include adjusting employee metrics. For further information, please refer to our article.
What can we do to help?
If you would like advice on how to measure employee output or performance management more widely, please contact our team on 0330 223 5253 or office@fitzgeraldhr.co.uk. We would be delighted to help you.
Further reading
We hope you found this guide useful. You may find the following articles on our Knowledge Hub an interesting read:
- An employer’s guide to hybrid working
- Seven tips for leading a remote team
- Reasonable adjustments in disability management
- Performance coaching – getting the most from your team
- How to build psychological safety in your organisation
