Ever struggle to measure productivity?


In April this year, Australia’s Productivity Commission published the 2014 edition of their Productivity Update, providing some stark insights into developments underpinning Australia's productivity performance.


The report found that 2012-2013 was the ninth consecutive year for negative or very weak “multi-factor productivity” – which combines factors like labour and capital to most closely convey an overall performance of “productivity”.  


Often, a wide variety of different data-sets is used for comparative analysis of productivity – especially at a national level.

But on-the-ground, at the grassroots of growing businesses across the country, certain types of labour productivity can sometimes be harder to identify than others. With this in mind, we’ve come up with some tips that might help make productivity that bit easier to pin down at a business like yours.


1. Manufacturing

Measuring productivity in a manufacturing setting can pose a challenge when several employees work on each unit. Seeing who is helping and who is hindering progress, can be hard to do.

One solution could be to measure a team's overall productivity for a set period and identify productivity relative to that timeframe. Setting targets (or even incentives) to meet objectives may be an effective means of increasing productivity.

2. Services industries

Measuring output across services industries faces the obvious hurdle that a quantifiable end-product (output) is not immediately apparent. For example, a customer relations manager cannot point to a stack of crates at the end of the week as a means of demonstrating their personal productivity.

Instead, their productivity must be made relevant to the task at hand – in a way that’s objective, measurable and comparable to previous or later results. Example of these might be number if inbound calls processed or number of refunds managed etc.

3. Knowledge based industries

People who deal with ideas could be classed as knowledge workers, in that they may be responsible for creating innovations, streamlining processes or reorganizing the business through developing new practices. But how to measure the ideas a worker has or the problems they might solve?

Potentially, you may find that the following might be effective ways of achieving some measures of productivity for knowledge workers:

  • input at committee meetings, brainstorms or training sessions
  • problem-solving tasks taken on or effectively managed
  • efficiency suggestions or other improvements made in a department

Although quota-setting for tasks like these may in itself be a challenge, metrics like these could still be used in ongoing appraisals, project-based performance reviews assessed in terms of overall contribution to a team/business division or department.


Contact Capaciti on 1300 347 960 to help you manage your staffing and productivity in your business.