Top Productivity Metrics Examples & KPIs To Measure Performance And Outcomes
Table of Contents
1) What Are Productivity Metrics?
2) How To Measure Productivity?
3) Productivity Metrics Examples
For years, businesses have experimented and narrowed down the most effective measurements for productivity. Productivity can be measured in many different ways and at different levels, from the raw industrial output of an asset in a manufacturing facility to the specific individual sales performance of a vendor. Today, employee output is no longer represented by vague descriptions, but by isolated figures that offer insight for improvement in specific areas, which can be found on an HR dashboard.
There are a lot of KPI examples out there to monitor progress and assess productivity Likewise, there are a lot of guides on how to be productive at work. Each industry, business, and department has tailored its own definition of individual productivity that performance indicators can assess: let's take a look at our selection of essential metrics you can use to improve your organization's performance in several areas.
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What Are Productivity Metrics?
Productivity metrics are measurements used by businesses to evaluate the performance of employees on various activities related to their general company goals. These metrics are used to highlight improvement opportunities and ensure maximum efficiency and productivity.
In shorter words, productivity is the effectiveness of output; metrics are methods of measurement. They are, by definition, how businesses evaluate productivity, usually that of their employees.
KPIs and productivity metrics can often act as intertwining categories. Sales goals and profit margins are all performance metrics examples that businesses reference, but it goes much deeper than that. Sales bring in profits; the management of those profits is heavily influenced by the metrics used to gauge productivity throughout a business.
Because of this, there are some performance metrics examples, and indicators to help increase employee productivity for every department. Professionals in human resources, management, customer service and more can all benefit from the data in their productivity metrics.
How To Measure Productivity?
Measuring productivity can mean many different things. Do the employees finish their projects, on time, and to instruction? What about the output of those efforts? If they do all of those things according to what they are told, but there is still no sales growth, where are adjustments needed? Finding the answer often takes more than one metric.
The way we measure it can vary between businesses. For example, some businesses believe that letting their employees use social media during the work day can be a productive habit, while other employers consider it a reason for disciplinary action. Without these measurements, it would be more difficult to substantiate any assertions, one way or the other.
That said, while it is true that productivity means different things depending on an organization's objectives and needs, there are still common guidelines that should be followed to define successful productivity measures. Let’s look at some of them.
Don’t focus only on labor: The first thing you should consider when measuring how productive is your company is to use the correct scope. According to an article in Harvard Business Review, measuring productivity in a modern business context is not only about direct labor but about a lot of other non-labor areas. As the author states: “single-minded attention to direct labor can produce unexpected consequences”. For this reason, your analysis scope should include anything that might affect the final output apart from direct labor.
Use the output formula: Next, you need to understand the output formula: productivity= units of output/units of input. In a traditional way, this formula is used to understand the revenue to total working hours. For this purpose, businesses divide the output (total revenue of a specific period) by the inputs (total worked hours during that period) to understand their overall productivity. That said, and considering the first point, this approach is only useful to monitor labor productivity. In order to get a wider scope, inputs can be defined as other factors such as output per machine, or output per ton of material. This way you will ensure you get a full picture of all aspects related to how productive your company is.
Gather the data: Once you have understood the scope and how to measure it, it is necessary to gather the needed data. The information you use will of course depend on your outputs, but it will most likely include worked hours, tasks completed, time spent on each task, revenue generated, and costs, just to name a few. Managing this raw data is not an easy task. To ensure efficient management of information you can support yourself with an online data analysis tool that can help you structure your data and leave it ready to extract insights.
Now that you understand how to measure how productive your organization is, it is time to look at some examples of types of productivity measures covering different areas.
Productivity Metrics Examples You Can Use
These productivity metrics examples are as interchangeable as they are targeted. You can conduct customized assessments per department while still sharing certain metrics across the board. Below are examples that can be both specific and universal in gauging output across departments. For more metrics, you can find inspiration in our KPI examples list for different industries, platforms, and functions.
1. Employee Productivity Metrics
a. Overtime hours
Overtime is a good way to gauge the cost and output of individual employees, though consideration of context is important for this productivity metric. For example, if the company has a spike in sales, people have to work harder to deliver on the promises they are selling. If overtime hours are a direct result of a heightened workload, this may be an indicator that you need to hire more talented employees instead of reviewing the ones in place.
Also, look closer by evaluating OT in combination with other employee productivity KPI examples such as workload, you can see, and therefore work to prevent, the mistakes that inevitably happen in an overworked team. Another common symptom of an overworked team is a higher rate of absenteeism. You can dig deeper into this topic by looking at our HR reports article gathering examples and templates.
b. Overall labor effectiveness
Overall labor effectiveness is a multi-faceted KPI that connects a number of details such as the amount of staff, shift effectiveness, and more. This is essential for human resources departments because it provides the information they need to answer complicated staffing questions.
Calculating the OLE by dividing the total sales by the number of employees is a very straightforward and simple way to achieve the answer. Yet once again, while this is a great metric, there should always be other indicators to consider that impact productive output, such as the amount of product delivered, quality control, and more. There is a manufacturing element here that draws appeal to all industries. Professionals who calculate overall labor effectiveness are able to understand exactly what the company has achieved, and how efficient their workforce is on a regular basis.
2. Recruiter Productivity Metrics
a. Turnover rate
Turnover rate is an essential productivity metric used by human resources professionals to measure employee retention. Turnover is an inherent part of running a business. For better or worse, employees will come and go in accordance with their talents and desires. The turnover rate gives managers the ability to forecast a necessity for talent replacement so that no leftover duty of a leaving employee goes unassigned.
To calculate the turnover rate, choose a time period. Month-to-month is a common method here. From there, divide the number of separations by the number of active employees during that time period.
A low turnover rate is a sign of happy employees. It ultimately leads to, at the very least, lower recruiting and training costs. If your company has a high turnover rate, look to your managers to identify areas that need extra attention.
b. Recruiting conversion rate
This is a unique indicator because it measures the performance of your human resources staff. Also, with this KPI you will have to draw your own standards; the right or wrong will be determined by the quality of your hires.
To measure your recruiting conversion rate, simply compare the number of applicants to the number of hires. If you consistently find outstanding people with little effort, stick to the ratio you are currently implementing. If time, talent, and consistency become areas of concern, it may be helpful to spread out that ratio or even isolate those factors with other metrics such as the following.
c. Time to fill
As the search for the perfect employee continues, the clock ticks. The work can pile up, causing other employees to become overworked and overwhelmed, often resulting in underperformance. In order to set a point of reference for your human resources professionals, the average time to fill is a helpful productivity metric.
To calculate time to fill, record the time it takes from a job posting to be created all the way up until the hire. Keep in mind that there is no standard for time to fill. The number can be lowered or raised so long as the right employees are chosen with limited cost to the company. If either of those factors are not in place, the time to fill is worthy of experiment.
3. Sales Productivity Metrics
a. Sales growth
For sales departments and most businesses as a whole, this is the most obvious productivity metric worth assessing. In order to measure sales growth in an actionable fashion, track the individual performance of sales employees against their targets and territories. Be flexible, see what’s working, and what isn’t, and readjust as necessary to ensure better productivity from your sales employees.
b. Revenue per sales rep
This next sales KPI is another great productivity indicator as it shows you the ability of your sales representatives to generate revenue for your organization. By setting ambitious, but realistic KPI targets and goals for your reps you can easily measure their performance and find improvement opportunities by comparing productivity against a benchmark month or last period.
In order to make the most out of this indicator, it is also important to divide your sales rep under different categories such as level of seniority, channel on which they are selling, and any other relevant aspect. This way, you will make sure you are being fair when it comes to evaluating their progress.
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4. Call Center Productivity Metrics
a. Top support agents
Your top talent deserves to be recognized, and relying on productivity KPIs enables a manager to remain objective when determining the strongest players. Here are some of the customer service-based indicators you can cross-reference to determine your best support agents:
- First call resolution
- Average calls per hour
- Customer satisfaction surveys
- Sales success
These indicators can help you identify the team members most eligible for managerial positions, as well as those who may need a little more training in specific areas.
b. Customer satisfaction
Arguably one of the most important customer service or call center productivity metrics, customer satisfaction can provide several insights into the quality of service your company is providing. When compared to some of the other examples in this post, the satisfaction KPI can be a bit harder to measure as it requires a different approach to data collection such as performing a feedback survey to your clients.
That said, there are many customer service analytics solutions that make this process way easier by providing automation technologies for this process. With the help of the right tool, you can set up different instances to gather feedback from your clientele and pinpoint different areas in which your service could be improved.
5. Productivity Metrics In Manufacturing
a. Production volume
When we are talking about manufacturing there is one key indicator that needs to be tracked to efficently assess productivity, this is the production volume. Typically, a manufacturing company has to deal with multiple production deadlines to cover the demand of their clients. With that in mind, this straightforward KPI will help you understand if you are able to meet your targets and how you could improve.
Now, since the production volume alone won’t tell you enough about where you could improve, it is important to take the analysis of this metric a bit deeper and compare the productivity of different machines. This way, you will be able to see if a specific machine is underperforming and find solutions to ensure your production process is fully optimized.
b. First Pass Yield (FPY)
Following the same line as our previous example, we have the first pass yield (FPY). As one of the most relevant manufacturing productivity metrics templates, the FPY assesses the quality and performance of your production process. It does this by dividing the number of perfect units (with no reworks or defects) by the total number of produced units entering the same process in a specified time.
In a perfect world, a company would aim for an FPY of 100%. But, given that this is not entirely realistic, it serves as a great productivity measure for achieving final production times on schedule and with the required quality. This indicator can be compared to other important ones such as the throughput or the scrap rate and visualized together in a professional manufacturing dashboard.
6. Marketing Productivity Metrics
a. Goal conversion rate
The conversion rate is one of the greatest indicators to measure the efficiency and productivity of the marketing department as a high conversion rate means a successful strategy. In short, a conversion is any desired action made by a visitor, user, or client, as you want to call it. Of course, the type of conversion will depend on the business and the strategy being measured. It can be anything from a newsletter subscription, downloading a guide, or signing up for a free trial just to name a few.
By setting clear conversion goals for your different campaigns and channels you can easily understand what type of strategy works best for your business and optimize resources to ensure an excellent marketing ROI. This leads us to our next example.
MQLs or marketing qualified leads, are one of the most important performance measurements when it comes to the marketing department. Essentially, an MQL is a potential customer that has been recruited by the marketing team and that meets all the criteria to be derived to the sales team to become a paying customer.
This is done by gathering multiple leads via different strategies such as content marketing, paid search, or social media strategies, once leads are generated, the marketing team defines which ones will turn into MQLs. The higher the lead-to-MQL ratio, the most successful your company is at qualifying leads.
7. Inventory Productivity Metrics
a. Inventory turnover
The inventory turnover is a productivity metric that measures how many times your total inventory was sold and replaced during a specific period which is usually a year. This is a great indicator to measure the efficiency of many business areas such as production management, marketing, and sales.
In general, a low turnover rate can mean that something is not working at some stage in your supply chain. However, this is not necessarily always the case. Some companies might have a lower turnover because they are selling more expensive products or services that stay longer on the “shelf”. For that reason, it is important to set realistic turnover targets based on the industry.
b. Inventory to sales ratio
Following on the same line as the turnover rate, another great example is the inventory to sales ratio. This most insightful of logistics KPIs tracks the amount of inventory in your stores compared to the number of sales and it is utilized to identify overstock as well as measure the performance of your inventory management process.
Inventory management is one of the most expensive activities for an organization, the more time you have unsold stock in storage, the more it will cost you. With that in mind, a good practice is to keep your inventory and sales volume at a similar level. If you notice that your stock is too high, but you are already reaching your sales targets then you might be producing more inventory than you need which is costly in time and money.
8. Productivity Metrics In Healthcare
a. Patient satisfaction
Moving on with some examples from the healthcare industry, we first have the patient satisfaction KPI. Just like customers are the most important aspect of a business, patients are the most important aspect of a health organization. Therefore, measuring their satisfaction level is a great indicator to assess efficiency and productivity across departments and areas.
This most important of hospital productivity metrics includes anything from the quality of meals, average waiting times, and treatment efficiency, among many others, and it can tell facilities where to focus their improvement efforts.
b. Hospital readmission rates
Our final example is the hospital readmission rates which provide insights into the quality of your health service. This indicator directly affects your patient satisfaction levels as it measures the number of patients that return to the hospital within a short period of time after being released.
High readmission rates can shine a light on a number of managerial issues such as understaffing or an overloaded staff neglecting details that make patients have to come back. Identifying these productivity issues can lead to decreasing unnecessary costs from readmissions as well as offering better service in general.
You can track this and other relevant metrics with the help of an intuitive healthcare dashboard.
Enhance Employee Productivity Through Metrics
Now that you’ve acquired the data, it is time to apply that knowledge and make your business more productive. But first, scrutinize your data. Remember that the circumstances surrounding these measurements should always be considered. Chance is certainly one of those circumstances. For example, a customer service agent who fields a significantly larger number of angry customers may not be the one causing the problems. Factors such as time of day, other workers on duty, and more can be influencing that influx of negativity. Furthermore, that very agent dealing with all these scenarios could become your future leader in conflict resolution.
Second, make sure your data covers a reasonable time period for evaluating your chosen productivity metric. Track metrics for months, not days, so that the report is thorough enough to produce actionable feedback.
Finally, we now know that the employees' well-being plays a big role in their productivity. This is why setting up and tracking employee satisfaction metrics can be a relevant measure for you to take, so as to see how your different initiatives in the matter impact their productivity. An HR analytics software is the ideal tool to manage all the data you will collect after setting up your metrics.
Once you’ve double and triple-checked your productivity KPIs, it is time to start making some changes. There are simple habits you can teach your employees to make them more productive. Perhaps there are changes to be made in staffing, scheduling, or operations. No matter what you decide to do about your data, make sure you keep recording. Future data will prove the effectiveness of your remedies, allowing for more productive solutions in the future.
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Find The Right Metrics Today
Business efficiency is a concept that is built over time within every company. Employee productivity is one of the biggest drivers of that efficiency. In order to boost performance, cut costs and retain both customers and employees, productivity metrics should be an accelerating part of the conversation.
At datapine, we specialize in helping our clients enhance their businesses. To get started in measuring your productivity and performance, read more about our self service BI tool or sign up for a 14-day free trial today!