How to Calculate Productivity in 2019: Beginner’s Guide and Definition

Remaining productive is a challenge for almost everyone. Whether you work in a factory, at home, or in a sales center, you have specific tasks or milestones that you need to complete. Unfortunately, it is not always easy to meet these goals.

Learning how to calculate productivity is the first step to improving your performance or the performance of your staff.

Calculating productivity gives you a baseline for tracking increases or decreases. It also allows you to evaluate your processes to find room for improvement.

If you or your workforce struggle to remain productive or meet production goals, learn how to calculate productivity to get better results.

What Is the Definition of Productivity?

Everyone defines productivity differently, depending on what types of tasks you are tracking. Measuring your productivity in your home office is a lot different compared to tracking the productivity of an assembly line crew.

The word was originally used in the early 19th century to discuss yields of crops. A high yield meant that the plants and soil were productive.

In the modern world, productivity is used to measure people. It is typically defined as the output of an individual or group of employees. You can also consider productivity the rate at which specific goals are achieved.

As productivity focuses on the volume of work, it does not provide a complete picture. Besides the amount of work, you need to consider the quality of the work. The quality is related to efficiency.

Productivity vs. Efficiency

Productivity measures total quantity over a specific period while efficiency helps track quality. Businesses constantly struggle with the balance between productivity and efficiency.

Picture Credit: Efficiency vs. Productivity

In an industrial setting, prioritizing productivity may cause employees to be less careful, increasing the risk of safety hazards. In a sales environment, pushing employees to close deals may detract from customer service. However, requiring employees to spend more time focusing on quality decrease quantity.

Balancing productivity with efficiency is difficult. While both metrics focus on output, efficiency measures output in relation to the resources used.

Efficiency is often brought up when discussing appliances. One energy source may be more efficient compared to another as it requires fewer resources to produce an equal or greater amount of energy.

In the business world, efficiency often measures waste and relative profit. If it takes you five hours to produce 100 units of some item, your productivity is 20 units per hour. To increase productivity, you may rush through the assembly process, creating 25 units per hour.

Rushing to increase output tends to reduce efficiency. If 20% of those units are defective, you are still only producing 20 units per hour while exerting excess energy.

There are limitations to both methods of analysis. When you measure productivity or efficiency, you are not looking at the reasons behind increases or decreases in performance.

In the end, productivity is best used as a rough guide for measuring output in relation to the effort put in. Efficiency is useful for determining how much of that effort gets wasted.

When Does Productivity Increase?

The US Department of Labor defines an increase in productivity as producing more output without increasing the input. You may also increase productivity by producing the same output with less input.

For example, you typically complete 12 tasks in eight hours. To increase productivity, you begin completing 14 tasks in eight hours. You have increased output without increasing input.

If you were to complete 12 tasks in six hours, you are also increasing productivity by maintaining the same output with less input.

How does this apply to your daily routine? You likely already know the number of hours that you have available during the day. To increase productivity, you will need to increase output as the input remains the same.

One way to increase output is to consider when during the day your productivity tends to drop. People are typically most productive at the start of the day. During the first few hours of work, increased blood pressure helps you remain more mentally alert.

At mid-day, blood pressure levels tend to drop off and blood circulation increases. During this period, you may remain productive but struggle with tasks that involve complex reasoning.

By the afternoon, your body is likely getting a little sleepy or drowsy. As the daylight begins to fade, your brain begins to wind down.

The bottom line is that most people get less productive throughout the day. Tasks that require the most mental energy should be performed at the start of the day while trivial tasks should be saved for last.

What Is the Average Productivity Rate?

There are many ways to track productivity, but the most-used statistic is the average gross domestic product (GDP) per labor hour. Nations use this statistic to determine the productivity of their workforces.

For example, the United States has the third-most productive workforce, producing $67.32 per labor hour. Norway has the most productive workforce, producing $75.08 per labor hour.

The average productivity rate would land somewhere around $40 per labor hour, which is close to the output of Japan, Hong Kong, or Taiwan.

How to Calculate Productivity in the Workplace

The standard method for measuring employee productivity is to divide total output by total input. The outputs and inputs used may vary depending on the industry and the specific goods or services produced.

Common outputs include:

• Gross sales;
• Net sales;
• Units produced;
• Total number of sales;
• Total number of new customers acquired.

Common inputs include:

• Labor hours;
• Resources used;
• Number of employees.

If you want to know how to calculate productivity, start with the most simple equation. It uses gross sales for output and labor hours for input.

For example, if your business generates $50,000 in sales in one month while using 1000 labor hours, productivity would equal $50 per hour. This would be a little higher compared to the average productivity rate discussed above.

You could also determine labor productivity in relation to the contributions of individual employees. Instead of calculating the total labor hours, you would use the total number of employees.

If you generated $50,000 in sales with 25 employees in one month, productivity would equal $2000 per employee per month.

These basic equations can be tailored to suit your industry. Instead of using total sales, you may use total units produced on the manufacturing line. A company that produces 25,000 units of an item using 2500 labor hours has productivity of ten units per hour.

These statistics help businesses calculate their current productivity, making it easier to set benchmarks and track progress. In some industries, you may already have benchmarks that you can use to compare productivity.

It is also possible to calculate your own productivity based on specific metrics. For example, if you work in outbound sales, you may divide the total number of sales calls made during the day by the number of hours worked. If you make 32 calls in a day and work eight hours, your productivity is four calls per hour.

If you work at a tire shop, you may rate your productivity based on the number of vehicles that pass through your station. If you rotate tires on 24 cars over eight hours, your productivity is three cars per hour.

The input and output values can be based on any metric that is relevant to your role or the productivity that you plan to track.

Ways to Increase Productivity Through Productivity Systems:

Productivity systems provide a way to address the challenges that tend to lead to unproductive workers. Some of the most used systems include:

• GTD (Getting Things Done)

• Personal Kanban

• Inbox Zero

Guess your productivity persona – GTD, Kanban or Inbox Zero

Getting Things Done (GTD) is a productivity system designed to simplify your workflow. It includes multiple stages for prioritizing your schedule, helping to reduce stress and boost productivity.

The methods outlined in the GTD system can be applied to both your work life and personal life. The GTD process requires you to create efficient to-do lists, allowing you to clear your mind and focus on one task at a time.

Personal Kanban is another productivity system to streamline your life. It is easy to use and adaptable for any situation. As with the GTD system, it gives you tools for managing to-do lists. With a quick visual of the tasks that you need to complete, it becomes easier to avoid taking on too much.

While GTD and Personal Kanban help you prioritize your day, Inbox Zero helps free up time. Inbox Zero gives you a simple approach for better email management. With this system, you learn to keep your inbox empty almost all the time, reducing time spent browsing your email client.

To follow Inbox Zero, always respond to new messages that require an answer within two minutes. If it takes longer to respond, move the message to a separate folder. The system also recommends that you do not leave the email client open.

How Can Technology Improve Productivity?

“Look, we have technology”

The productivity systems discussed may help improve your overall productivity and efficiency. However, there are also many technologies available, such as:

• Task management apps;
• Personal time-logging apps;
• Noise-canceling headphones.

Task management apps are used by individuals and organizations. They provide a simple interface for keeping track of the steps in a project, sharing files, and keeping things organized.

You may also find that personal time-logging apps help keep you productive. These apps allow you to start tracking your time, so you gain a better sense of how long it takes to complete specific tasks. One such application is the Pomodoro timer.

Another technology that may boost your productivity is noise-canceling headphones. The headphones help block out noises by emitting a low-frequency sound. With fewer distractions, you can remain focused on your work.

Along with technologies to help improve your personal productivity, every industry relies on technologies to improve employee productivity.

At an assembly plant, the latest technologies help speed up production while reducing defects. There are many automation solutions ranging from mechanical appliances to computer software.

Besides industry-specific technologies, there are productivity solutions with universal appeal. These options typically involve productivity software or systems that provide employees with additional resources, such as:

• Project management tools;
• Remote access;
• Time-tracking software;
• Company intranets.

Many of the productivity technologies focus on providing ways for employees to share and access information. This may include project management tools that ensure that everyone is on the same page.

There are also ways to provide remote access to the mobile workforce or increase worker collaboration. Employees may need to access client data or view a service request. Ensuring that they have quick access to this information helps increase productivity and efficiency.

Businesses are also utilizing time-tracking software to keep better tabs on employee productivity. Besides tracking individual hours worked, time-tracking software may be used to track overall progress on a project.

Company intranets are another example of how technologies help to improve productivity. An intranet is a local network that is only available within the organization. However, a virtual private server (VPN) may be used to provide remote access to the intranet.

An effective intranet should be functional and provide employees with useful resources. The goal of the intranet is to simplify things. Some of the common issues that intranets help solve include:

• Communication;
• Collaboration;
• Business information;
• Business processes.

The intranet may offer employees a way to communicate and collaborate easily. They can share files and chat. Managers may even have the option of tracking their progress.

These systems also commonly include helpful information. The intranet may provide access to HR policies, project goals, or documentation on specific services or products.

Productivity Life Hacks

The final solutions for improving your productivity involve various life hacks. These are tried and tested techniques for promoting more mental focus, energy, and overall productivity:

• Surround yourself in energizing colors;
• Meditate to boost productivity;
• Take regular breaks to maintain productivity.

The color of the room and lighting impact your energy levels. Blue is considered the best color for offices. It represents logic, efficiency, and communication. Green is also recommended for increasing harmony and reducing stress, explaining why it is often found in medical settings. The hue and saturation also affect productivity. Choose brighter shades of these colors to energize the room.

Picture Credit: digitalsynopsis.com

Mediation is another technique for re-energizing yourself. Taking just a few minutes to close your eyes and focus on your breathing helps clear distractions, worries, and stress. When you resume work, you should feel mentally and physically refreshed.

Even if you choose not to meditate, you should still take regular breaks. Throughout the day, you should take a short break every 60 to 90 minutes. If you work at a desk, get up and stretch your legs every 30 minutes to encourage better circulation.

As a final tip, make sure that you only focus on one task at a time. Multi-tasking does not work. Switching between tasks requires you to reorganize your thoughts and recalibrate on the new task.