From XU Magazine, 
Online News

How to measure employee productivity for your remote team

July 14, 2020

This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
You can find the original post here:

A productive team means higher profit margins, more engaged employees, and an overall more efficient service business.

While measuring productivity has always been important in job management, it’s especially useful when you’re working with a distributed team – which has recently become a new reality for service businesses around the world.

Before shifting to remote work, you may have been able to estimate productivity using your judgement of who is completing work efficiently and “reading the room” to assess employee engagement levels.

To better understand business effectiveness when operating remotely (and to achieve better business results overall), you’ll need to establish a strategic way to collect, measure, review, and utilise data and insights specific to your people, including productivity metrics and feedback.

In this blog post, we explain how to measure employee productivity, and why it’s important to take both quantitative and qualitative data into consideration.

Using performance data to measure employee productivity

Measuring employee performance starts with having the right systems and tools in place to accurately collect data.

Job tracking and management software enables you to seamlessly capture productivity data as your team is executing tasks and jobs (for example, WorkflowMax provides eight different methods to track employee time and can automatically sync that data to generate reports).

Spreadsheets can also be used to collect and analyse data, although they require much more manual work and are prone to human error.

Key data required to measure productivity

As you manage jobs, ensure you're tracking the following information:

  • Employee time: Billable and non-billable hours from a time tracking system
  • Employee schedule and capacity: Employee availability and utilisation rates
  • Estimated time and costs: The resources you’ve estimated that will be required for a job
  • Actual time and costs: The resources that were actually used to complete a job
  • Job tracking and progress: How your jobs are tracking against milestones, deadlines, collecting payment etc.

Once you’ve collected the right data, generate reports before, during, and after jobs are completed to gather productivity insights.

Key productivity reports for professional services

The type of reports you choose to run will vary depending on the specific needs of your business; however, these reports are particularly useful for professional services:

  • Work in progress report: Understand how in-progress jobs are tracking against estimates while a job is underway. Key productivity indicators include time (hours tracked by staff) and completed tasks.
  • Job financial summary report: When you complete a job, compare your actual costs and time against your estimated costs and time. This comparison will give you valuable information for estimating future jobs.

Pro tip: Most reporting software allows you to create custom report templates that you can use to pull critical insights into almost every aspect of the jobs that you perform.

In addition to collecting quantitative productivity data, it’s important to collect qualitative data from your team as well.

Collecting feedback to understand employee productivity

While performance data shows how productive your team is, employee feedback can explain what environmental factors are impacting your team’s ability to be productive.

Why feedback is important in measuring productivity

Collecting frequent feedback is key to measuring employee productivity for three main reasons:

  • Understand the “why”: Asking your team the right questions gives you insight into what might be affecting one’s productivity – in a positive or negative way. As you’re reviewing performance data, you’ll have additional information that will help you make continuous improvement.
  • Rely on leading indicators, not lagging indicators: Performance metrics are essential for measuring productivity, but they are lagging indicators, which means they provide insight after the fact. Feedback is a leading indicator, which will help you understand areas of support before there is significant business impact.
  • Instil trust by measuring what matters: Collecting feedback from your team shows them that you’re interested in their wellbeing, development, and continued success – not just your bottom line. Strategically collecting feedback will help you build trust by listening to how your team is really feeling and providing support that is truly impactful.

Best practices for strategically collecting feedback

Strategically gathering feedback usually means implementing a survey, poll, or another mechanism to collect employee responses.

It’s usually most effective to standardize the way you collect feedback so that employees understand it will be regularly reviewed and considered (instead of one-off surveys or polls that aren’t tied to a broader strategy).

Consider the following when building your own feedback strategy:

  • Communicate the “why”: First, it’s important to gain buy-in from your team as to why you’re collecting feedback, and what you’re intending to use it for. Before implementing any system for feedback collection, be sure to explain how this will help the team (and show them that you’re committed by implementing changes based on that feedback).
  • Length: Most people simply don’t have time to fill out 20-minute surveys. Keep your surveys short, simple, and to the point – they should take no longer than 1-2 minutes to complete. In addition to having a greater response rate, you’ll also get more honest results.
  • Frequency: Making feedback collection routine is key to getting consistent data that can be used to make real decisions. One-off surveys will only give you a point-in-time view – for example, a culture survey run every 6 months means you could be making decisions on culture based on old data, and you might not understand what caused changes in culture over the 6-month timeframe.
  • Variability: Answering the same questions every day or week can get tedious and lead to unhelpful results. If people stop providing feedback because they are burnt-out by the questions, the results lose some of their value, and decisions made on the data are also impacted. Keeping feedback frequent and variable will help your team remain engaged with the feedback process.

People-analytics software (such as Everperform) can automate the feedback collection process for you, or you can use surveying tools (such as SurveyMonkey or Google Forms) to create your own feedback process.

Learn about the most effective types of discussions and feedback questions to ask your team with our free download: Tips & Best Practices for Working Remotely: A Guide for Professional Services

Connecting performance data and employee feedback

Performance data and qualitative feedback are informative on their own, but you can get a much better understanding of your team’s productivity when you connect relevant metrics together.

The following insights will help for professional services:

  • KPI and Engagement analytics: Employee engagement results compared with the key performance indicators will provide valuable insights in predicting future performance. For example: compare motivation from working from home (engagement metric) against ability to complete projects and hit deadlines (KPI metric), and make adjustments as necessary.
  • Productivity and Lead Indicators analytics: By frequently pulsing employees on proven lead indicators and correlating that to real-time productivity metrics, you will understand the areas that you can support your employees to improve.  For example: regularly review employee time tracked, but be sure to compare against your employee engagement metrics to paint a more complete picture of productivity.

Remote working is the new normal

As businesses continue to navigate restrictions put in place due to COVID-19 and as many experience success with remote work operations, it’s likely that working in distributed teams will become the new normal. The sooner you can put systems and processes in place to optimise business performance in the remote environment, the more prepared you’ll be for the future – whatever it brings.

Why leave it there?

To learn more about WorkflowMax

Straight to your inbox

Subscribe to our newsletter for updates as they happen
We hate spam too. We NEVER sell our mailing list.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.