Your Ultimate Guide to Measuring Employee Productivity In 2023

Employee productivity

Measuring employee productivity refers to the process of determining how efficiently and effectively employees are completing their tasks. To understand this better, imagine you manage a call center and want to improve employee productivity. One way to do this is by tracking the number of calls each employee handles, the duration of those calls, and how many issues are resolved. Analyzing this data allows you to identify top performers and areas for improvement in both training and workflow. You can use this information to make data-driven decisions that can lead to improved productivity and better business performance.

In this article, we’ll discuss the importance of measuring productivity and the different methods for measuring productivity. Most importantly, we’ll show you some employee productivity apps for ensuring accurate and fair assessments of your workforce. This is perhaps the only guide you’ll ever need on this subject. 

Ready to learn how to measure employee productivity in 2023? Read on!

Standards for Measuring Employee Productivity 

Productivity refers to how efficiently and effectively work is being completed within a certain period. Measuring employee productivity involves tracking specific metrics like output, sales numbers, customer ratings, or other relevant data. This can look different depending on the industry and the type of work. For example, in a manufacturing plant, productivity may be measured by the number of units produced per hour. But in a customer service center, productivity may be measured by the number of calls answered or the speed at which customer inquiries are resolved.

It’s important to note that productivity can be measured at both project and employee levels. Project-level productivity looks at how well a team or individual completes a specific project, while employee-level productivity looks at an individual’s performance over a longer period.

Measuring productivity can also differ depending on whether an employee is salaried or hourly. For example, a salaried employee might be measured on their overall contribution to the company, while an hourly worker might be measured based on the number of tasks completed within a specific time frame.

Ultimately, there must be an alignment between business goals and objectives and productivity metrics. Besides that, businesses must ensure that productivity metrics are fair and accurately reflect employee performance. This means taking into consideration factors such as the complexity of tasks, the skill level of employees, and of course the resources available to complete the work. By doing so, you can make informed decisions about employee development, and ensure that your business is achieving its goals efficiently and effectively.

Measuring Employee Productivity by Type

There are three main approaches to measuring employee productivity. Which one you choose will be determined by the nature of your business. Let’s do a brief highlight of each of them.

  1. Partial labor productivity: Partial labor productivity: This looks at the amount of output produced per unit of labor input.  Let’s say you run a small software development company, and you want to measure the partial labor productivity of your employees. 

  • You have a team of 3 software developers who each work 8 hours per day for 22 days per month, and they produce 30 lines of code per hour

  • The unit cost of a line of code is: 3 employees x 8 hours x 22 days = 528 worker-hours

  • Worker-hours divided by 30 lines of code per hour equals 17.6 worker-hours per line of code

  • If you pay each of the developers $25 per hour, then the production cost of the unit is: $25 x 528 worker-hours = $13,200 per month

  • $13,200 per month divided by the total lines of code produced per month equals the cost per line of code. In that case, you’ll have $13,200 per month / 15,840 lines of code = $0.833 per line of code

  • This calculation shows the partial labor productivity of the software developers in terms of how much output they are able to produce per unit of labor input.

  1. Multi-factor labor productivity: Multi-factor labor productivity is another type of productivity measure that takes into account both labor and capital inputs. In addition to labor input, which we discussed in partial labor productivity, capital input is also considered. The formula for multi-factor productivity is simple: output divided by the sum of labor input and capital input.

This measure is useful for industries where capital investment is significant. For instance, if a manufacturing company produces 1000 units of product using 200 labor hours and $5000 worth of capital inputs such as raw materials, machinery, and energy. 

  • Using the formula for multi-factor productivity: output (1000 units) divided by the sum of labor input (200 hours) and capital input ($5000), we get:

  • 1000 / (200 + 5000) = 0.191

This means that for every hour of labor and every dollar of capital invested, the company produces 0.191 units of product.

By tracking multi-factor productivity over time, the company can identify trends in how effectively it is using its labor and capital resources to produce output and make adjustments as needed to improve efficiency and profitability.

  1. Total labor productivity: This final measurement, also known as total factor productivity, divides total output by all inputs used in the production process.  

Let’s say you run a bakery that produces cakes. In a given month, you produce 500 cakes, using the following resources:

  • Materials cost: $5,000

  • Labor cost: $10,000

  • Energy cost: $2,000

  • Capital cost: $8,000

  • Other expenses: $1,000

To calculate total labor productivity, you would divide the total output (500 cakes) by the sum of all inputs, including materials, labor hours, energy, capital, and other expenses and the calculation would look something like this:

  • Total output/All inputs = Total Factor Productivity

  • 500 cakes/($5,000 + $10,000 + $2,000 + $8,000 + $1,000) = Total Factor Productivity

  • 500 cakes/$26,000 = 0.0192

Therefore, the total labor productivity for your bakery for that month is 0.0192.

Advantages of Measuring Employee Productivity

Employers and employees alike can benefit in numerous ways from measuring employee productivity. Here are some of such benefits:

  1. Enhanced accountability: Measuring productivity provides a clear picture of employee performance, which can increase accountability and ensure that employees meet expectations. 

  2. Create excellence culture: Measuring employee productivity is crucial for determining compensation and employee role trajectories, such as promotions, stretch goals, internal role changes, and terminations. Also, identifying and recognizing exceptional employees can spur others to strive for excellence.

  3. Improved ROI: By identifying areas where productivity needs to be improved, businesses can optimize their resources and improve their return on investment (ROI).

  4. Employee growth and development: Measuring productivity can help identify areas where employees need training or support, which can promote growth and development.

  5. Better decision-making: Measuring productivity can help businesses make informed decisions about staffing, resource allocation, and other key areas.

  6. Increased employee satisfaction: When employees get feedback on how their work contributes to the overall success of the organization, it increases their level of satisfaction on the job.

  7. Increased profitability: Improved productivity can lead to increased profitability, as more output can be produced with the same or fewer resources.

  8. Competitive advantage: Businesses that can operate more efficiently and productively than their competitors can gain a competitive advantage in the marketplace.

Therefore, measuring employee productivity can be a valuable tool for businesses looking to improve their operations, engage their employees, and achieve greater success.

Disadvantages of Measuring Employee Productivity

While measuring employee productivity can be useful for organizations to improve performance and profitability, there are some disadvantages and ethical concerns to consider.

One disadvantage is that productivity measures can sometimes be overly simplified and not take into account the complexities of a job. Here is a good example. A call center may measure productivity by the number of calls an employee takes in an hour, but this doesn’t necessarily reflect the quality of service provided or the amount of time spent on each call.

Another issue is that productivity measures can lead to a focus on quantity over quality. Consequently, this can lead to employees cutting corners or sacrificing accuracy to meet production targets.

Ethical concerns related to measuring employee productivity include privacy issues. For example, if employers are monitoring employee computer activity or tracking their movements with GPS, employees may feel like their privacy is being invaded. Additionally, productivity measures can create a culture of surveillance and mistrust, which can negatively impact employee morale and job satisfaction.

Furthermore, measuring productivity can lead to unfair comparisons between employees or departments. Some jobs may be inherently more productive than others, so comparing them directly can be misleading.

Lastly, while measuring employee productivity can be beneficial, it’s important to consider the potential disadvantages and ethical concerns. It’s crucial to strike a balance between the need for productivity and the rights and privacy of employees. Therefore, it’s essential to use productivity measures thoughtfully and with sensitivity to the concerns of employees.

The Importance of Measuring Employee Productivity

Measuring employee productivity is essential for both employees and employers. Here’s why:

For the employee:

Employees need to track and measure their productivity because it helps them understand how effectively they are using their time and resources to achieve their goals. By tracking their productivity, employees can identify areas where they can improve and make necessary adjustments to their work habits. Ultimately, this can lead to a sense of accomplishment and personal growth, which can improve their overall job satisfaction.

For the employer:

Among the many reasons why people start businesses, one of them is perhaps to make a profit. And measuring employee productivity ensures that the business is not only running efficiently and effectively but also profitably. To further break this down, there are three major reasons why employers measure productivity:


  • It helps them identify areas where their employees are performing well and areas where they need to improve.

  • It allows them to compare their employees’ performance to industry standards and competitors.

  • Lastly, it helps them identify best practices and strategies for improving productivity.

Labor optimization:

  • It helps them identify inefficiencies in their processes and procedures.

  • It helps them allocate resources effectively to maximize productivity.

  • It helps them identify opportunities for automation or outsourcing to reduce labor costs.

Analysis and reporting:

  • It provides employers with data-driven insights that can help make informed decisions about resource allocation, staffing levels, and process improvements.

  • It helps them identify trends and patterns in employee performance over time.

  • It helps them evaluate the impact of changes or interventions designed to improve productivity.

Best Apps for Measuring Employee Productivity

Assessing productivity can feel like an additional responsibility without an efficient system to automate the task. If you notice that you are devoting more time to monitoring your productivity than accomplishing your tasks, it may be appropriate to pause and re-evaluate your methods. This is why, in this section, we will examine a few applications that can help you simplify the process.

Best Employee Productivity App for Field-Based Teams:

Field-based teams often work outside the office, making it challenging to track their productivity. One of the best employee productivity apps for such teams is Workyard, a time clock app with GPS that helps track employee work hours and locations. With a primary focus on field-based teams, Workyard offers a range of features designed to streamline workflow and optimize productivity.


One of the standout features of Workyard is its GPS time clock app, which enables employers to track employee hours and locations in real time. This feature allows managers to ensure that employees are working at the right location and during the right hours. This could help reduce errors and boost productivity drastically.

Above all, it is easy to use and customize to suit the needs of any business. Whether you have a small team or a large workforce, Workyard offers scalable solutions that can be tailored to your specific needs.

Looking for an employee productivity app that captures data accurately so you can manage your field-based team better, measure productivity and optimize your workforce? Workyard is the perfect pick. Give it a go today and see how it can transform your business.

Best Employee Productivity App for Office-Based Teams:

Office-based teams need an employee productivity app that can help them streamline their work processes and collaborate effectively – Undoubtedly, Asana is an excellent choice for such teams. Asana is a project management app that helps teams manage tasks, track progress, and collaborate on projects smoothly and stay organized. One fun part is that it’s super intuitive, so you won’t waste precious time trying to figure out how to navigate the tool.

But that’s not all – Asana has some pretty cool features that make it stand out from other project management tools out there. For one, it has a “Timeline” view that helps you visualize project schedules and dependencies, as well as monitor how efficiently employees deliver tasks. It also integrates with tons of other tools like Google Drive, Slack, and Trello, so you can bring all your favorite tools together in one place.

Most importantly, Asana can be customized to fit your team’s specific needs. Whether you’re a small startup or a large corporation, Asana’s scalability makes it a great choice for any office-based team looking to boost productivity.

Best Employee Productivity App for Remote Teams:

Looking for the best employee productivity app for your remote team? Trello is a powerful project management tool that has become increasingly popular among teams that work from home. Here are some reasons why Trello is a great tool for managing employee productivity for remote teams:

  • Easy to use: Trello’s user-friendly interface makes it easy for team members to collaborate and stay on track with their tasks.

  • Customizable: Trello allows teams to create boards and cards that are tailored to their specific needs, making it a versatile tool for managing different types of projects.

  • Collaborative: Trello makes it easy for team members to share ideas, collaborate on tasks, and stay in sync with each other, regardless of their location.

  • Organized: Trello’s intuitive layout helps teams stay organized and focused on their tasks, reducing the likelihood of confusion or missed deadlines.

  • Real-time updates: Trello allows team members to see real-time updates and changes to boards and cards, making it easy to stay informed and up-to-date.

Most importantly, Trello can help remote teams stay productive by providing a centralized platform for collaboration and task management. Are you managing a remote-based team? Then Trello could be a great tool to improve employee productivity.

The Bottom Line on Measuring Employee Productivity

Bringing all the information together. Measuring employee productivity is crucial for any business that wants to thrive. And whether your team is office-based, field-based, or remote, there are productivity apps that can help you achieve your goals. By tracking productivity, businesses can identify areas for improvement, optimize labor, and benchmark performance. 

Most importantly, when measuring employee productivity, it’s important to remember that the goal is not to micromanage employees – but to help them work smarter, not harder. Therefore, it’s essential to communicate with your team and provide them with the tools they need to be productive. By doing so, you can build a culture of productivity that benefits both employees and the business as a whole.

As a business, you do not only need your employee to be productive. You also need a content strategy that works and brings in results. You can saddle us at Optimal Edge with all your SEO content writing responsibilities and let’s do the heavy lifting for you while you concentrate on getting your staff to be productive. Contact us today to discuss your content needs and what strategy is best suited to your marketing objectives.

Ajayi Olalekan

Ajayi Olalekan is a Professional SEO writer & editor with 8+ years of print journalism and writing experience across different platforms — blogs, website, eBooks and social media.  His writing experience also cuts across industries like IT, fashion, education management, real estate, consulting and entertainment.

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