It is important to measure employee productivity to track performance and to identify workers who are either excelling or failing on the job. According to the Harvard Business School, employers should develop performance measurements that alert management to emerging issues and are related to the key drivers of business outcomes. You can develop metrics to measure employee productivity once you fully understand the job function and the outputs of the position.
Identify work outputs for each position by going over job descriptions. It is easier to pinpoint outputs for operation positions because the primary purpose of the job is to perform certain tasks. Administrative positions or jobs in the service industry are more difficult to assign productivity metrics. You may have to consider broader production measures, such as number of customers served or how quickly employees address client issues. In some departments, it is easier to set group productivity goals.
Talk to your employees to obtain their ideas for productivity measures. According to a "Business 2.0" article published on CNN Money.com, productivity increases over time when employees assist in developing performance metrics.
Compile objective measurements that are related to key functions of the job. These can include number of orders shipped, amount of sales calls or quantity of customer invoices sent out. You can divide the output by the number of hours worked to arrive at a figure you can use to compare employees and track productivity trends.
Add subjective measurements for management to rate. The best way to do this is to create a numeric rating system that managers can use to assign employee scores daily or weekly. You should write out criteria for each of the scores to encourage consistency.
Make notes of unusual or extenuating circumstances as you track employee productivity. Employees learning a new job will probably have lower productivity than experienced workers will. You should also note any system problems or mechanical failures that cause productivity numbers to fall through no fault of the employee.
When computing productivity numbers for employee output, you should deduct "downtime" when the employee is involved in non-operational functions, such as training.