Measuring Productivity

There is no one agreement on definition of productivity, yet we can say that it is the output-input ratio within a time period with due consideration for quality (Weihrich & Koontz 1993, p. 11). Companies use several kinds of inputs like labor, materials, and capital. These inputs can vary the levels of productivity. However, there is another major element which has been ignored in this formula which deeply effects the productivity and that is the management.

Peter F. Drucker (1973), one of the most prolific writers in management states, “The greatest opportunity for increased productivity is surely to be found in knowledge work itself, and especially in management. ” In present environments, productivity of knowledge worker is more difficult to measure than that of the skills worker. One difficulty in measuring productivity of knowledge workers is that some of their outputs are only the activities that help achieve end results.

It is however evident through research that productivity improvement can be achieved by good management practices. Productivity measurement is an important facet of human resource management which is done by evaluating the employees performance and then correcting and awarding them accordingly. This process of evaluation may take the form of a short informal discussion between employees and their supervisors, analysis of sales reports, or a more elaborate process spread over many specific steps.

Irrespective of their formalities, performance evaluations besides measuring the productivity serve many other purposes like providing feedbacks, enabling effective controls, and employee development (Decenzo & Robbins 2002, p. 272). Intel recently launched a multiyear initiative called e-Workforce for measuring general office productivity, which drives collaboration by embedding core business processes such as meetings, teams, and document management into new and existing technologies.

The IT Business Value team has been made responsible to measure the business value of the e-Workforce program, focusing on employee productivity and travel reduction. To calculate the business value related to employee productivity, the data needed is the task frequency, task time savings, adoption rate of the new application, and adoption rate of the new task method. At Intel, productivity improvement is viewed along a continuum: as a single implementation in time or as multiple deployments as part of a phased solution.

Therefore, it is not uncommon for a program to have multiple phases. This productivity measuring software can be used to measure different phases at multiple-timeframes (Intel, 2005). Employee productivity depends on giving employees opportunities for their personal growth, achievement, responsibility, recognition, and reward. It has been observed through productivity surveys and case studies that increased worker motivation and satisfaction can increase worker output thereby increasing the overall productivity.