Is January the Right Time for a Productivity Review?



The holiday season has come and gone, and a new year is underway. Often, this makes it a great time to reevaluate business processes to determine new directions, and that can include productivity reviews on your employees.

While the work associated with a productivity evaluation should be ongoing, taking the time to examine how employees have been performing can position your business for a more profitable year. To help you get started on the right foot for 2017, here are some key points on how to calculate worker productivity and their value to your organization.

Understand the Metrics

Productivity seems difficult to measure outside of pure production environments. Production workers, material handlers, and QC inspectors can have their activity recorded in fairly concrete terms. But those working towards group goals, such as many information technology workers, aren’t as easy to track.

Ultimately, productivity is a comparison of input to output. Input generally refers to things like the employee’s salary and benefits, training costs, and the amount of time required to complete tasks. Output is based on the worker’s ability to complete tasks in a timely fashion, often in comparison to the rate at which coworkers doing similar work finish specific job duties.

By examining productivity in that manner, you have a better chance to find meaningful measurements regardless of the kind of work in which the employee participates.

Factor in Pay Rates

The size of an employee’s salary is a consideration in productivity reviews. You have to compare the hourly wage received to the amount of output being yielded to get a solid comparison. For example, if two employees provide the same amount of output, but one is paid twice as much as the other, then the lower paid employee is providing more value. In contrast, if the higher paid worker is producing four times the output of the lower paid employee, then that should be considered during the review.

A productivity review has less to do with attitude and more to do with metrics. And an employee’s pay rate is a vital factor in the calculations.

Don’t Forget Other Costs

Aside from pay, businesses invest in employees in multiple other ways. This can include the cost of their benefits package, any training that is required (or requested) to perform the job, and even the amount of materials waste the employee creates.

For example, if two employees that receive the same salary in a production environment produce an average of 10 pieces per hour, but one employee makes an item incorrectly once every 20 times, while the other has an error rate is one in 15, the one with the lower error rate is providing more value. Metrics such as these are just as important as any other factor when determining the value of an employee to an organization.

When Less Productive Employees Are Identified

Productivity reviews are not the only consideration regarding who makes a great employee. However, they can add valuable insight regarding the value an employee brings to the table and can serve as a point of comparison when choosing which employees should stay on the payroll.

If you need to replace a less productive employee to reach optimal output, The Advance Group is here to find the workers you need. Contact us and see if a new employee is the ticket to a better 2017 for your bottom line.







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