Productivity vs. Results. Why Today Results Need to be Measured Not Only by Productivity

Just yesterday, the concept of “productivity” was used to measure the efficiency of the work process using various key indicators [hours worked, income per employee, etc.]. However, today, evaluating work effectiveness solely based on productivity cannot provide a complete understanding of overall results and success.

Several factors influence results, with some of the most crucial being employee engagement, satisfaction levels, and teamwork. This article suggests examining why organizational processes in the modern office should not be measured solely by productivity indicators and what truly stands behind productivity.

Why Traditional Productivity Metrics Don’t Work Today?

The rapid development of automation and intelligent technologies, ushering the world into the Fourth Industrial Revolution [4IR], has contributed to the evolution of workplaces and the transformation of businesses. Despite the apparent benefits of modern computer equipment, fast internet, numerous automation programs, and artificial intelligence, which were expected to accelerate, optimize, and simplify office work.

Meanwhile, Deloitte’s research suggests otherwise:

Low productivity levels are accompanied by a record-high stress level. According to Gallup, 44% of workers worldwide feel significant stress at work.

In the global survey, The State of Work in 2023, conducted by Slack, differences in the perception of “productivity” between employers and employees are highlighted. For employers, it’s the desire to maximize employee productivity to increase profits, while for employees, it translates into pressure from management, working on weekends, demonstrating constant effort rather than results achieved. This conflict leads to decreased productivity, stressful situations, and unmet goals.

Why Traditional Metrics Fall Short of Modern Employers’ and Employees’ Expectations?

Productivity can no longer be considered an objective indicator and should not be applied to determine any parameters. This outdated term is primarily intended for manufacturing goods. However, work in an office or service industry cannot be evaluated solely by productivity.

Deloitte analysts cite several reasons why companies today struggle to measure productivity:

• tracking productivity can lead to paranoia and a decrease in actual productive work;
• productivity metrics may exclude important ecosystem participants in the workforce [such as freelancers, service providers, etc.];
• productivity metrics may not consider knowledge and “invisible” work [tasks beyond defined job responsibilities].

I agree with Deloitte experts that the approach to productivity needs to be rethought, considering a new way of organizing a work culture built on engagement and results.

Why Engagement and Employee Happiness are More Important Than Productivity in the Workplace?

Deloitte experts recommend shifting the focus from productivity to effectiveness, and from productivity results to human results. Aligning with goals and tasks will help employees and the company itself thrive physically, emotionally, financially, and professionally.

Eric Karpinski suggests enhancing organizational engagement and effectiveness by motivating employees towards happiness. The author of the bestseller “Put Happiness to Work: 7 Strategies to Elevate Engagement for Optimal Performance” asserts that strengthening social connections with colleagues, focusing on positive emotional consequences of engagement, and understanding the meaning of work are crucial factors for employee happiness, internal motivation, and success, helping achieve team goals. Both the organization and its employees benefit from this approach.

The findings of The State of Work in 2023 align closely with these thoughts. Statistics indicate that employee happiness, desires, evaluations based on results, personal growth, and skill development directly impact activity and engagement:

82% of employees claim that the feeling of happiness and engagement at work is a key factor in their productivity.

The Japanese company Hitachi decided to measure the happiness level of its subordinates using the smartphone app Hitachi Happiness Planet, synchronized with wearable devices. The system recommended users various ways to increase happiness, and as a result of the experiment, employees’ psychological capital increased by 33%, and profits increased by 10%.

How can employers use this information for the benefit of the company? Various strategies can be implemented. For instance, a flexible work schedule, preferred by 52% of office workers [McKinsey’s survey results are even higher: 87% of Americans utilize flexible schedules if available]. By the way, a long-term hybrid work strategy is the future of offices that has already arrived:

Gallup believes that managers need to optimize hybrid workplaces, creating an attractive value proposition for work, inspiring teams to collaborate more efficiently, and revising performance management systems.

I believe that such an approach should be applied in all companies, regardless of how the staff works — whether in-office, remotely, or hybrid. This includes various aspects, such as understanding goals and the meaning of work tasks, the role of leadership [being a manager or a coach], interaction with colleagues, and setting team goals. Increasing employee efficiency, motivation, happiness levels, and engagement should be the focus. In the long run, this will impact job satisfaction, employee retention, and organizational efficiency.

I propose a model that will help you implement such an approach in your company.

Organizational Culture as the Basis for Team Interaction

Deloitte experts propose a new operational model for work and workforce — an organization based on skills. As flexibility and mobility in the workplace become more crucial, and innovation and creativity become more valuable, the separation of work from formal job instructions becomes possible. In such a scenario, skills become the foundation for decision-making regarding work and the workforce.

This transition brings numerous benefits for businesses:

In order to become a skill-based organization, you need:

• shift in the staff practice, emphasizing the value of skills;
• implementation of practices for talent learning and development;
• experimentation with new ways of organizing work so that employees can smoothly transition to positions that align with their skills.

The self-realization model can be combined with Gallup’s functional approach, which suggests creating an organizational culture that promotes employee growth, guides, and shapes the organization. It will be unique for each company and, besides attracting and retaining clients, holds significant importance for the team:

• organizational culture attracts talented employees;
• culture creates coherence and unity towards a common goal;
• culture focuses engaged employees and helps satisfy their basic needs;
• assists in building a team culture geared towards high efficiency in achieving organizational goals.

According to Gallup experts, such an approach helps create an environment where motivated employees perform their duties well and demonstrate high efficiency.

Gallup identified five crucial driving forces shaping a company’s organizational culture, influencing employee behavior, decisions, and job performance:

1. Leadership and communication.
2. Values and rituals.
3. Human capital, recruitment programs, and adaptation.
4. Internal organizational structure.
5. Effectiveness [level of collaboration, team cohesion, partnership relations, individual performance evaluation, and employee recognition].

The foundation of any company’s organizational culture is engaged employees, who are productive and achieve better results, as confirmed by Gallup’s findings.

The engagement model looks like this:

It serves as a roadmap that managers can use as a basis for developing the potential of the entire team.

Conclusion

Changes in the approach to employee productivity and engagement help organizations reconsider their attitude towards team members. Shared values, teamwork, and a shift in priorities from productivity to engagement and results enable employees to perform their work optimally without stress, contributing to the overall efficiency of the company.

Creating organizational culture, engaging employees, considering their skills, continuous learning, and talent development are crucial components of long-term success and efficiency in a dynamic and competitive business environment.

What employee engagement strategies does your organization use? Does it have an organizational culture? Share more details about it in the comments!