Leadership

The biggest productivity challenges

Productivity. At its basis, the term means the rate of output per unit of input. The phrase echoes an era when employees were seen as production line machines, measured by the amount of time it would take them to produce a single item. However, today the measure of productivity has become increasingly difficult. Today, we live in the knowledge based economy which emphasizes a greater reliance on intellectual capabilities rather than on physical inputs.

Peter Drucker first wrote about the difficulty of defining and measuring the productivity of knowledge workers in a company. Knowledge workers, are those employees whose job involves handling or using information. Knowledge based workers simply cannot be measured by the output of their productivity. Quality is often more important than quantity, therefore the sheer amount of time spent on a project or the output produced may have little to do with how productive the knowledge based employee truly is or was. For example, it would make no sense to judge the productivity of a software developer by counting the lines of code produced; a shorter string of code might yield far better solutions than a longer one.

Despite the challenges with measuring productivity or performance, countless companies around the globe still use numerical data to determine output. Knowledge based work involves more diverse and amorphous tasks than those that are easier to automate - such as production line or clerical positions. There are means and ways of creating a productive work environment, whereby employees can work toward a common goal. However, according to the academy of management having no efficient performance management process may result in 13 percent lower productivity. With that in mind, organisations that focus on creating a work environment that is conducive to the quality of output rather than the quantity, will enjoy higher rates of “production”. Companies that use productivity to measure performance of knowledge workers risk failing to accurately identify top talent within the company. When not recognised for their efforts these employees lose motivation to work harder. Since knowledge based workers spend half their time on interactions, it makes sense for an organisation to understand the barriers that hamper these interactions from occurring. Cited barriers can include poor management, outdated systems, and employee dissatisfaction

1. Poor management

Having ineffective leaders impacts employee productivity, and ultimately the business bottom line. When managers cannot articulate the business goals correctly, it leads to confusion and incoherence. Productivity will ultimately be hampered, as employees who are in a state of confusion are not able to translate expectations into reality. In a Gallup survey it estimated that as much as 450 million dollars are lost every year due to ineffective productivity in the workplace. When companies lack leaders who bring inspiration to the workplace, they run the risk of creating a disengaged work environment. Chronically high levels of disengagement represents a fundamental challenge managers must face to keep employees interested in their roles

As much as 32 percent of involuntary employee turnover is attributed to poor leadership skills. A recent HBR article set out to understand the effect poor leaders have on the productivity of employees in an organisation. They found that leaders who micromanage, bully, and are indecisive increase productivity challenges. The survey found that the vast majority of leaders do not effectively communicate, with inclusion, recognition and clear directions. Knowing what the financial impact of having disengaged employees has on the workplace, it's no surprise that companies now are investing substantial amounts of money into developing their managers and creating a work environment whereby employees can openly give feedback to their managers whenever needed. Implementing leadership training programs, whereby leaders can better understand their shortcomings and strengths, can mitigate the productivity issues companies may face.

2. Employee dissatisfaction

When employees are engaged, typically it leads to higher levels of productivity. However, in addition to this, highly engaged organizations have double the rate of success than their lower engaged counterparts. When employees are motivated they do whatever it takes to increase their productivity and make a success of the organisation. When employees feel like they are part of something important and their contribution has  made an impact on business results, they form a mental and emotional attachment that becomes mutually beneficial for both employee and employer. Employee engagement occurs when employees know what to do, and when they are motivated to do it. The engagement process is, in essence a partnership, whereby employees and leaders must mutually engage to grow the business. Companies need to look further than the bottom line and engage with employees to get the most out of their productivity. Success today requires a bit more than just focusing on making a profit. When employees are not actively engaged, it has detrimental effects on the organisation.

3. Outdated performance management systems

Annual performance appraisals have been one of the major tools used to assess employees’ work. However, of late, this old outdated system of reviewing employees on an annual basis is coming to an end. And for good reason. It hampers productivity. There is now plenty of evidence that suggests annual performance reviews create a stressful work environment. Furthermore, evidence has Studies have proven that the stress caused by annual performance reviews triggers our body’s natural ‘fight or flight’ reaction. This leads to lower productivity and hampers the quality of work.  In today’s rapidly changing work environment employees need advice and training more than once a year. 95% of managers are unhappy with the way performance reviews are conducted in their companies.

To compete effectively, organisations need to put the right technology to work for achieving critical business goals. This is true when it comes to managing productivity. The problem with the annual performance review is that the system drags down productivity, drives up costs and generally puts a company at a competitive disadvantage. As companies need to remain competitive, it’s essential they keep up with technology. For example, as an HR manager, it’s important to keep to various compliance related developments. Technology that was cutting edge years ago, won't be able to handle the latest changes in wage and hour lawsuits automatically. Having to manually input this data is inefficient and ineffective.

And the annual performance review is not the only process that is seeing a revamp. Today, a number of companies are employing a single, automated and integrated workforce management system that provides reliable, consistent data for reporting and decision-making. Managers can get accurate, real-time information for scheduling, time based approvals. What's more, they can bring results in line with expectations and make sure their employees all understand the goals they are required to achieve. One  integrated system also helps managers make informed decisions to optimize labour costs, improve management processes and drive compliance policies. Cloud based computing has changed the way in which a company is able to implement software. These new services, provide a simple, faster and more cost effective way to update outdated systems. Using systems, such as Impraise, businesses can understand their employees in a more quantifiable way and begin to rectify productivity issues.

Solutions

From the above it’s evident to see the business symptoms that kill productivity can easily be solved once a company knows and understands them. Through ongoing manager reviews, a business can easily identify who their key leaders are and who may need leadership training. Employees who can easily solicit feedback to their managers helps to boost team morale, which leads to better productivity. By using Impraise, employees can easily express to each other how they are improving in the workplace and where they may need further development. This allows for collaborative learning and helps identify productivity roadblocks which lead to further cost implications.

Photo Credit: David Joyce