What is productivity and how does it differ from efficiency?
An employee’s work is measured in two categories: productivity and efficiency.
Productivity shows what results the employee has achieved:
- how many leads the manager processed in a day;
- how many commercials the video production team filmed in a month
Efficiency shows the ratio between the achieved result and the costs incurred to achieve it:
- how much money was spent on advertising and how many leads were obtained from that advertising;
- how many Red Dot awards the video production team received for their commercials.
The video production company “Kryanyk” created a landing page with a list of services and a portfolio, after which they launched targeted advertising. The second video production company “Excellence” created an Instagram page, filled the feed with their works, and launched targeted advertising only on this platform. Both video productions received the same number of leads from their ads (equal productivity). However, the revenue of the video production company “Kryanyk” is less than that of “Excellence” because launching the landing page required paying for the work of a UX/UI specialist, designer, developer, and copywriter. Therefore, the efficiency of the video production company “Excellence” with Instagram ads will be higher: lower costs with the same number of leads, which means higher revenue.
What are the parameters of productivity and efficiency for employees?
The assessment of productivity and efficiency depends on the size and type of company (product or IT) and the chosen KPIs. In this article, we use indicators that assess client companies of Worksection as examples. Such indicators include:
- time and money spent. How quickly did the employee complete the task? How much money did the company spend to complete the task?
- the ratio of overdue to on-time tasks
- the ratio of planned to actual costs for task completion. Did they stay within budget when completing the tasks or did they have to spend more than planned?
How to use the data on labor efficiency and productivity assessment?
- Improve team performance. In the lean manufacturing tool PDCA, team efficiency assessment is used to develop new approaches that should enhance employee productivity in the next iteration.
- Increase salary or employee level. For example: promote them from junior to middle
- Forecast how much time and money will be needed to solve a SMART task (Achievable criterion).
- Plan a task for the next time period (sprint) considering the average time taken to complete similar tasks.
- How performance is assessed at Google, Deloitte, Netflix, One2, and Volta One
At Google, efficiency is assessed using three tools:
OKR (Objectives and Key Results) — a goal-setting and key results practice. At Google, this practice looks like this:
- - an employee sets a goal once a quarter and identifies three results they hope to achieve;
- - at the end of the quarter, the employee self-assesses each result;
- - a score of 0.6 — 0.7 means that an ambitious goal was achieved. A score of one means that the employee set too easy a task.
Peer evaluation method 360 degrees. Employees evaluate each other on a five-point scale. The scores are summed up and the manager provides an overall assessment.
Manager evaluation. An anonymous report with evaluations is released every six months. The report evaluates the quality of communication and the clarity of the goals set by managers.
At Deloitte and Netflix, department heads hold weekly one-on-one meetings with employees. In these meetings, they analyze the reasons for success or failure, assessing work efficiency. At Deloitte, a manager answers questions like: “Do I want this employee to stay on my team?”. At Netflix, as well as at Google, employees also evaluate each other using the 360-degree method.
At the video-performance agency One2, employee efficiency is assessed using the following tools:
daily stand-ups. Each team member takes turns reporting on results from the previous day, making commitments for the current day, and sharing issues. Daily stand-ups demonstrate what is happening in the company and how to make work more efficient
retrospectives. Regular meetings in Agile teams where the work process is discussed. With retrospectives, it’s possible to understand what mistakes were made and how to fix them — for example, how to increase the number of concurrent tasks without losing quality.
At the digital agency Volta One, efficiency is assessed based on the time spent on tasks. This involves connecting tools: a time tracker and reports. The time spent is also crucial for advertising and PR agencies, as well as law firms.
Programs and services for assessing labor efficiency and productivity
To assist in productivity assessment, a dedicated person can be appointed who will have access to all tasks, reports, and tools. At Achiva Network, this specialist enters all tasks from the weekly coordination meetings, noting where deadlines were missed and who did not take on the task. In Sreda Digital, these functions are performed by a project manager’s assistant. This helped reduce the average response time to clients to 15 minutes and lower accounting costs.
For tracking time spent
Toggle — a free time tracker that shows the time spent on a task. This is a convenient tool for companies with an hourly payment system. By digging into the reports, one can assess the cost of similar projects, productivity, and employee work efficiency.
RescueTime - an application for self-assessment on a PC. The app tracks all activities and categorizes them: design, business, social media, entertainment. At the end of the day, you can look at the statistics and understand how much time was actually spent on tasks and how much was spent surfing the web and messaging.
TeamViz — a free timer and task manager based on the Pomodoro technique, which we wrote about in a separate article.
For self-assessment by employees
Weekdone OKR Software — a system for implementing OKR in a company. Includes quarterly goals, weekly planning, and PPP reporting.
Mercer Mettl 360view — a platform for collecting and analyzing evaluations using the 360-degree method.
For tracking overdue versus on-time tasks/planned versus actual costs
TMetric — a time tracker that has two significant advantages: integration with major task managers and the ability to determine profit per project by specifying the budget and labor costs.
Trello - a project management system using Kanban boards. Kanban boards make it easy to see how many tasks are in process and how many are completed on time.
Worksection - a project management system with Kanban boards, a time tracker, and Gantt charts. By means of automated reports, one can understand what constitutes the project budget and which employee has the most overdue tasks. You can test the project management system for free for 14 days right now.
4 Worksection tools for assessing work efficiency
Time tracker
The built-in time tracker will show how much time has been spent on the project and help forecast how long it will take to complete typical tasks. If you set an hourly rate in hryvnias and dollars, Worksection will automatically calculate the employee’s salary.
Report
In Worksection, reports are generated automatically — just enable filters for the number of completed tasks or time spent on the project. For example, at Visotsky Consulting, weekly reports are created to see how many tasks were completed last week and how many were missed or not completed on time. The generated report can be exported to XLS to manually calculate the ROI or profitability of the project.
Gantt chart
In the Gantt chart, it’s convenient to plan tasks and establish relationships between them. However, this tool can also be used to assess team productivity in their project work. For instance, account managers at Vintage Web Production export the project timeline to Excel and send it to clients.
Filter
Filters help ensure deadlines aren’t missed and track each employee’s workload. Filters are used at TEBIN and Achiva Network: the former checks employee workload through filters, while the latter checks deadlines and the number of tasks for each employee.