Defining Workplace Productivity

Define Productivity In The Workplace January 11, 2023

Priyanka Bhadani

Writer

What Does Workplace Productivity' Really Mean?

Workplace productivity is a term that is commonly used by business professionals. However, using the phrase without understanding what it actually means can actually be detrimental to business operations.

Workplace productivity refers to how employees work towards the production of goods or services and accomplishing company objectives. The standard method of measuring productivity is by observing the amount of work team members perform within a specific time period or established labor cost range.

A business owner that wanted to measure productivity could divide total output by total input. Input variables used range from employee labor hours to any other resources utilized. Output variables used would include any products or services produced by team members.

Productivity measurement types can vary by industry. For example, a sales company could divide their net sales accomplished by the number of work hours performed by team members in order to average out the number of sales per hour that normally occur.

Alternatively, a small business that produces goods or services to clients could divide the number of services or goods produced by the hours that team members worked to produce them.

Beyond measuring productivity levels, many business owners want to improve employee productivity due to its vast benefits for both employees and the entire company overall.

Importance of Productivity

A high productivity workplace is crucial for overall business success and profitability. When businesses increase productivity levels they will likely experience more satisfied stakeholders.

It is also much easier for a business to retain and sustain a competitive advantage in the marketplace when they improve employee productivity. In an increasingly competitive global marketplace, employee productivity is more important than ever before.

When employers make sure that team members spend time appropriately, the business spends less on labor costs. Considering that labor costs are a large portion of company budgets, these savings can add up quickly.

Businesses that successfully increase productivity are generally less wasteful. When materials are utilized correctly and high quality work is produced, there is less need to replace items or throw away defective products.

Businesses and stakeholders are not the only parties rewarded in a high productivity workplace. Team members also experience significant benefits including heightened levels of morale.

When employees feel happy at their workplace, they are also more likely to provide excellent customer service. As a result, customers will have a better experience at a business and be much more likely to return.

Customers benefit from not only enhanced customer service abilities, but also from the knowledge that a business can produce enough goods and services to satisfy consumer needs. The combination of these benefits can create brand ambassadors in the form of loyal, returning customers.

Unfortunately, low productivity in the workplace can have some disastrous effects. Employees in a low productivity workplace do not optimally utilize time spent which results in unnecessary labor costs incurred by the business.

Signs of low workplace productivity can range from project management difficulties to consistent customer service issues. To remedy productivity issues, many business owners resort to hyper surveillance techniques such as time tracking and social media monitoring, which may not actually increase productivity in a meaningful and sustainable way.

Low productivity workplaces also negatively impact team members on staff. Low employee productivity may result in more absenteeism and higher employee turnover rates.

Efficiency vs Productivity

Workplace efficiency and workplace productivity are oftentimes used interchangeably. However, there are important differences between the two concepts that all business professionals should be aware of.

Workplace productivity refers to the quantity of work that team members produce. Alternatively, workplace efficiency refers to the resources utilized in order to produce that work.

Efficiency is crucial to consider whenever measuring productivity as measuring productivity alone can be misleading. For example, let's say that employees work for 1 hour and produce 50 products.

However, 25 of those products are ultimately rejected due to their quality. In this circumstance, the productivity measurement alone would have been incredibly misleading.

Whenever employers measure productivity levels, they should additionally make sure to consider efficiency levels. Doing so will create a more accurate reflection of not only the quantity of work produced but also its quality.

Key Takeaways

Workplace productivity is crucial for both the individual employee experience and overall business success.
Workplace productivity and workplace efficiency are two distinct business concepts.