Have you ever wandered by an employee’s desk and saw him or her posting on Facebook, playing on a smartphone, or surfing the web? Do your employees stand around the coffee machine chatting for way too long? As a business owner or manager, you probably often wonder if your employees are being as productive as possible. It’s a question that plagues many business people and keeps them up at night. How do you know if they are working at maximum productivity? These are some great ways that you can improve, and track, employee productivity at your company.

Revenue Per Employee

A good baseline as an overall measurement of employee productivity is revenue per employee. It’s a simple formula; use the total revenue for a specific period, usually a month, and then divide that by the number of employees. This number is your benchmark, and you should watch it carefully and look for patterns. If it’s trending downward, it could be a sign that your company has gotten “fat” and that your employees aren’t being as productive as possible.

Conduct a Workflow Assessment

A common problem in many organizations in redundancy and inefficient workflow. A workflow assessment tracks a task from beginning to end to see how it might be streamlined. For example, how many times a day does a specific employee have to walk back and forth to the printer? Would it help to give that person his or her own printer or to batch it so they only have to go to the printer a couple of times a day? Any workflow assessment should involve the staff doing the actual work because they usually have some good ideas on how to streamline their own tasks.

Key Performance Indicators

Do your employees have SMART goals and key performance Indicators? SMART stands for specific, measurable, attainable, relevant, and time-based. Your employees should know what they are supposed to accomplish on any given day, week, month, or year, and you should know how they are measuring up against those specific goals. Once these things are tracked, you should see their productivity increase over time. If not, you could have an issue.

Motivate Your Employees

Image via Flickr by reynermedia

Different employees are motivated by different things, but it’s a rare employee that is motivated purely by a pay check. Most people are likely to be more productive if they feel valued. Tell your employees thank you often and in front of others. Also, offer incentives, such as additional time off, a prestigious award, or a bonus.

Payroll is often a significant share of an organization’s operating expenses, and that’s why it’s essential to measure your employee’s productivity. In addition, by tracking employee productivity, you’ll get ideas on how to increase business profits by reducing wasted time and other direct, and indirect, employee-related expenses. So the next time you see an employee having a lengthy chat with a coworker, you can rest assured that they have earned that extra time because they are highly productive and just need a little touch base with a colleague.