How to effectively measure and boost employee productivity

Who could forget early 2020, when millions of companies around the globe shifted to remote work almost overnight and office employees needed to work from home. Since then, organizations have consistently experimented with new ways of working and better ways to support their customers and employees.

Now company leaders are looking for fresh ways to make teams more productive. As generative AI and other technologies hit the market, it’s clear that the global work experiment that began in 2020 was just the beginning.

In this guide, you’ll learn how we define and measure productivity, and best practices for motivating employees to be more productive, efficient and effective.

Understanding workplace productivity

Before you measure productivity, it’s important to know why and when you should.

What is productivity and how is it traditionally measured?

The word “productivity” can have multiple meanings for different people. For some, productivity implies worker output and the desire to increase it for more profit. But for most desk workers, feeling pressure to be productive can translate into long nights and work-filled weekends, highlighting the level of effort over actual results.

Slack recently partnered with Qualtrics to create the 2023 State of Work, a survey of more than 18,000 desk workers, to understand what makes them more efficient and productive.

The results of the survey found that executives traditionally measure productivity in the following ways:

• 27%

  visibility and activity (time spent online or at the office)

• 19%

  achieving key performance indicators (KPIs) and goals

• 15%

  cost metrics

Our survey found that, in practice, productivity is more about generating high inputs (such as resources used, time spent at work and written code) to appear productive rather than actual outputs (including goals met and revenue generated). And how are modern companies measuring productivity? In short, through tools and technology, motivation, visibility and activity, cost metrics and employees achieving their goals and KPIs.

Productivity vs. efficiency: what’s the difference?

People often use productivity, efficiency and effectiveness interchangeably. While they can be pretty similar, they have nuanced differences.

• Productivity focuses on the quantity of work done
• Efficiency places weight on resources and minimizing waste to achieve an outcome
• Effectiveness looks at doing the right things for the desired outcome and producing results that align with organizational goals

Also used interchangeably are the three P’s: productivity, production and performance. Again, these terms have subtly distinct meanings, so you must have a solid understanding of each to talk about improving employee productivity and performance.

• Productivity is the measure of how efficiently resources or goods are created
• Production is the actual process of creating those services, covering the entire process
• Performance focuses on how well and how often individuals reach their goals

Why we measure productivity

Benefits of measuring productivity

Nobody wants productivity dips, but they are especially problematic in extreme market conditions (hello, high inflation rates). With productivity metrics you can avoid dips by:

• Identifying productivity gaps. Map out what needs improvement. Maybe you need to upgrade your tech stack or offer more flexible work hours.
• Making data-driven decisions. Apply productivity metrics throughout the company so you can make data-backed decisions. For example, if your HR department lags in responsiveness, you can adjust the team’s workload or rebalance the team to drive higher outcomes.
• Boosting employee morale. When you measure employee productivity, you can acknowledge high performers for their achievements. Showing appreciation to your employees can increase their job satisfaction, which can make them more likely to stay at your company and drive higher retention rates.

The link between employee satisfaction and productivity

Employee productivity can be an indicator of individuals’ satisfaction at work. Employees with low productivity might be unhappy, leading to poor performance.

Employees in our 2023 State of Work survey reported that low productivity was linked to several causes. First, they felt less productive when they were involved in too many meetings.

Those surveyed also reported low productivity when they felt unsupported, lacked access to effective tools or felt trapped in information silos.

On the flip side, employees reported that they’re the most productive when their employers embrace flexible work, empower them to attend meetings as needed, and provide time-saving tools, automation and platforms.

Challenges in productivity measurement

Today executives and non-execs are locked in a tug of war over how to measure productivity.

Our State of Work survey found that individual contributors prefer to be measured based on what they produce according to team goals and KPIs. But executives tend to rank visibility and activity as the highest indicators of performance.

Then there’s the challenge of measuring “soft” productivity drivers like motivation and emotional well-being, which many organizations overlook and can be difficult to measure accurately.

How to measure productivity

Companies are shifting how they measure productivity. Instead of putting all of your attention solely on one data point, like activity, try quantifying productivity according to both hard and soft data points.

 

Below, we’ll go over some of the ways you can measure productivity.

Quantifying productivity

One way to analyze productivity is by communication and collaboration. Platforms like Slack gather data around how employees use the tools in the company tech stack and build that into the dashboard. Accessing those metrics helps determine how effective, efficient and productive the communication is at your organization.

How to calculate productivity

Try measuring multiple data points. Start with metrics like tasks completed, online engagement and responsiveness, attitude and willingness to incorporate new technology.
Through our 2023 State of Work survey, we learned that today’s most successful companies prioritize equipping their people with technology that accelerates work and unlocks their talent, creativity and collaboration vs. visibility metrics like hours worked.

Executives are measuring cost metrics, visible activity, and KPI and goal achievement as the most important productivity data. Individual contributors, on the other hand, focus on hours spent on specific types of work, conversations with their managers, and then KPIs and goals.

Monitoring and tracking productivity

The best ways to monitor and track productivity do not include spying on your employees or tracking their clicks. To garner real results and build trust, try these ideas instead:

• Set goals with your employees. Actionable, time-based KPIs are easy to track and monitor progress.
• Keep an open-door policy. When employees feel that they can come to you, they’re more likely to share when they’re overloaded.
• Reward productivity. Too often, high performers are rewarded with more work. Hello, burnout. Instead, give high performers recognition.

Measuring productivity in remote work

Remote work can pose challenges, but the strategy stays the same. If a remote employee isn’t delivering or being collaborative, you’ll notice it. Give performance reviews with clear metrics to build trust on both ends.

Increasing employee productivity

At Slack, we found no direct correlation between the pressure to be seen doing performative work and real, measurable gains. On a related note, employees who “feel pressure to respond to messages quickly, even if they’re sent after standard working hours” aren’t more likely to say they feel productive.

So, what can you do to increase employee productivity?

• Ditch distractions and multitasking with a platform that supports focus, tool choices, flexibility and automated workflows. People who self-reported in our survey that they are more productive today than they were pre-2020 are better connected with their teams, using more collaboration tools both at home and in the office.
• Eliminate performative work and hold fewer, better meetings. Spending too much time in meetings slows productivity. Our research found that almost 43% of meetings could be eliminated with no real downsides.

Tap into the power of automation and AI to measure productivity

While 77% of survey respondents asserted that automated tasks would significantly boost productivity, a whopping 60% reported that their companies had not incorporated AI.

AI and automation have long promised to help organizations operate more efficiently, and they’re seizing the spotlight thanks to major leaps.

AI and automation tools give employees an informational edge, save time and money, improve the overall quality of work, increase employee satisfaction and retention, and reduce dependence on IT teams.

Here’s some things AI can do:

• Sales teams can automate deal approvals and customer record updates
• Customer service can use AI-powered chatbots to escalate to the right contact
• IT teams can monitor and respond to incidents automatically with automated ticketing and Slackbots
• Software engineers can perform AI-assisted code review and testing
• Marketers can automate elements of their social media production and use GPT-based models to help with content creation

Give workers location flexibility

Employees who say they’re more productive at work post-pandemic attribute some of their success to a flexible work environment. Flexibility consistently ranks first for what workers want.

More than half (52%) of desk workers say that a flexible work schedule is one of the best ways employers can support their productivity. But the issue is far more nuanced than giving free people reign over their schedules and desk location.

The key is to create workplace policies with intention. It’s not useful to be in the office when no one else on your team is there. Focus on the tasks that benefit from an office setting, like project planning, and align office visits with those tasks.

Experiment with new ways of working

The landscape of work is shifting, and we should be experimenting alongside the changes. Fully distributed teams might be more productive by attending quarterly meetings in person, where teams can meet one another and collaborate.

Slack huddles enable the quick, informal discussions that are often missing in remote and hybrid environments. Social channels in Slack help break up the workday with light-hearted discussions about food, movies, books and music to get individuals chatting and connecting.

Key takeaways

There is no one right way to measure and improve employee productivity. If you’re looking for new ways to boost output, here are some of the key takeaways from this guide:

• You might not be on the same page as your employees. It’s eye-opening that executives and individual contributors consider productivity on such different levels. To make sure you’re rowing in the same direction, set achievable productivity goals with your employees in 1:1 meetings.
• Quantify productivity with hard and soft data points. Focus on hard data points like activity and output, and soft data like your employees’ well-being, job satisfaction and collaboration efforts.
• Incorporate time-saving tools. AI and automation can be powerful tools to boost productivity, especially when you implement them thoughtfully.
• Embrace flexible work environments. By giving your employees work options, they can choose the environment in which they feel the most productive. That might be fully remote, hybrid or in the office. Providing flexible work schedules can be a great way to enhance work-life balance, boosting your employees’ moods and output.