Simple Ways to Calculate Employee Productivity and Improve Performance
To further improve employee productivity you first have to have the ability to calculate it. When you measure the employee productivity two times – once at the start of a period of time, but then right after 1, 3, 6 or 12 months – it’s going to show you whether or not employee productivity is actually increasing or perhaps going down hill for any individual employee.
Select the result you are going to measure. Depending on your business – for example – number of items completed or number of customers served are helpful measures when it is usually calculated. Pick a time period, for example shift, day, week, month, quarter and year are commonly used by managers to track productivity of their employees, and calculate the overall result for the employee. This will average any kind of issues throughout any specific time.
Get your current input number, that is the actual time of work put in working. Evaluate the employee’s productivity through a long time, simply because any individual time is probably not representative on the typical outcome from this employee. Picking a entire month is effective. The longer the time frame, the higher quality average you are going to obtain.
Now simply divide the outcome by the actual input value. As an example, 200 units completed within 8 hrs of input means that the employee productivity is 25 units hourly. Once you have this simple metric you can easily compare the productivity of all of your employees. This will help you better evaluate the individual performance as well as the overall team and company performance level.
Give money values in order to calculate your company’s cost vs. benefit metric. From the case in point, if the units or items are worth $20 each one, and you also pay your current employee $50 hourly. For each $50 in salaries (which is input), you get $500 worth of product ($20 x 25 products). Now divide the output by the input to get what the worker is actually generating compared to his or her salary. In this case the employee produces 10 times his / her salary in goods – the worker is paid $50 per hour and this generates $500 value for the business.
Calculate non-production productivity in money rather than units. For instance, think about a salesman who would make $300 each day and also sells $2,000 in services or goods per day. Your current output number will be 2,000, with your input number at 300. You can now divide the exact outcome by the actual input. 2000 divided by 300 is 6.7. Multiply this number by 100 to get that the salesman generates 667% of the salary in benefit for your company. This individual makes almost seven times more than you actually pay him or her.
Employee productivity is crucial for the business. When you add up all individual employees and their effectiveness you are getting the overall business productivity. As you can see by these simple examples it is very easy to start measuring and tracking productivity results. Regardless of the employee position and role within your company you should be able to find a simple way to track the input and the output of your employees. In addition to the benefit for you and your business this will also benefit the employees because it creates a clear understanding of the metrics, targets and expectations for everyone in your business.
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