How To Measure Productivity in Ways That Actually Make Sense

Countries measure productivity by their GDP per hour worked – all the finished goods and services produced by a country, divided by the amount of labor that went into delivering them. In management, productivity is about how efficiently you work – how much time it takes to produce a given amount of work.

Sounds straightforward, right? But in the modern-day workplace, it’s anything but that. It may even be time to redefine our notion of productivity and chuck a few metrics out the door. Perhaps you’re wondering how to measure productivity in ways that actually make sense because you realize that hard output is not where the story ends when it comes to your team’s performance. And you’re onto something, according to some business leaders.

The challenges of measuring productivity

“One of the biggest challenges to measuring team productivity is that there is so much more data available than we have the capacity to interpret. While there are so many more tools and data points available for leaders to use when evaluating productivity, it’s also far easier for leaders to get overwhelmed and lose sight of what to measure,” says Arthur Worsley, former McKinsey associate and founder of The Art of Living, a website that helps top performers lead happier, more balanced lives.

It makes sense: If you measure productivity by how efficiently you produce work that doesn’t even matter, you end up being super efficient at accomplishing the wrong things.

“The most important thing for leaders to remember is that there is no one-size-fits-all approach to measuring productivity,” says social media expert and influencer coach Chris Grayson, Founder of InfluencerMade.com. “The best way to measure productivity is to start by understanding the specific needs of your team and then choosing metrics that align with those needs.”

Common mistakes leaders make when measuring productivity

Even the best-intentioned and savvy leaders can make mistakes when setting productivity KPIs, so it’s important to be aware of common pitfalls to avoid. “Common mistakes include focusing on output instead of input, setting unrealistic goals, and not taking into account the different ways teams work,” adds Grayson.

According to Worsley, not considering the individual personalities of your team members is another no-no when measuring productivity. “Some people work best in certain environments, while others function better in different situations. The best leaders know this and adjust accordingly,” he says.

So a big takeaway is that if you want to measure productivity in ways that actually make sense, you need to reflect on what makes sense for your team specifically.

• What are your top priorities?
• What are you trying to achieve?
• How could you achieve it more efficiently?
• What would efficiency look like?

Giving your team direction is also key. “Managers often don’t provide enough direction or clear goals for their teams, especially in remote work situations, which can lead to confusion around what’s important and make it difficult to measure productivity,” adds Worsley.

Once you define what productivity looks like for your people, make sure you’re also on the same page about where to focus efforts and what the targets are.

Additionally, Worsley says you have to be aware of your own biases when attempting to measure productivity. Make sure that your definition of productivity and the metrics you choose are not based on your assumptions, but on what matters for your team. Otherwise, it could backfire and negatively impact morale and productivity.

Overrated and underrated metrics to measure productivity

So, what should you measure exactly? Again, it depends on your team and goals, but there are a few examples of overrated and underrated metric categories used to track how productive you are.

“Important but underrated metrics include measures of team engagement and satisfaction, as well as measures of creativity and innovation,” says Grayson. According to him, overrated or misguided metrics include “measures of timeliness and efficiency, which can often lead to overwork and burnout.”

“One underrated but important metric I’d recommend leaders use is the engagement of team members with their work. Employees who are engaged with their work tend to be more productive, but they’re also less likely to burn out or quit (which has a hugely negative effect on companies),” adds Worsley.