How to Effectively Measure and Boost Employee Productivity

Now more than ever, leaders are looking for smarter ways to help their teams work smarter—not just harder. That means rethinking what employee productivity looks like and re-evaluating how it gets measured.

In this guide, you’ll learn the best way for modern organizations to measure productivity, as well as best practices for motivating employees to be more productive, efficient, and effective.

Understanding employee productivity

Before you measure productivity, it’s important to know why and when you should.

What is productivity and how is it traditionally measured?

The word productivity can have multiple meanings for different people. For some, productivity implies worker output and the desire to increase it for more profit. But for most desk workers, feeling pressure to be productive can translate into long nights and work-filled weekends, with only a tenuous connection to actual results.

Slack partnered with Qualtrics to create the 2023 State of Work, a survey of more than 18,000 desk workers, to understand what makes them more efficient and productive.

The results of the survey found that executives traditionally measure productivity in the following ways:

• 27%

  visibility and activity (time spent online or at the office)

• 19%

  achieving key performance indicators (KPIs) and goals

• 15%

  cost metrics

Our survey found that, in practice, workforce productivity is more about generating high inputs (such as resources used, time spent at work, and code written) to appear productive rather than actual outputs (including goals met and revenue generated). And how are modern companies measuring employee productivity? In short, through tools and technology, motivation, visibility and activity, cost metrics, and employees achieving their goals and KPIs.

Productivity vs. efficiency: what’s the difference?

People often use productivity, efficiency, and effectiveness interchangeably. While they can be pretty similar, they have nuanced differences.

• Productivity focuses on the quantity of work done
• Efficiency places weight on resources and minimizing waste to achieve an outcome
• Effectiveness looks at doing the right things for the desired outcome and producing results that align with organizational goals

Also used interchangeably are the three P’s: productivity, production, and performance. Again, these terms have subtly distinct meanings, so you must have a solid understanding of each to talk about how to improve employee productivity and performance.

• Productivity is the measure of how efficiently resources or goods are created
• Production is the actual process of creating those services, covering the entire process
• Performance focuses on how well and how often individuals reach their goals

Why we measure employee productivity

Nobody wants productivity dips, but they are especially problematic when competition is fierce or other market factors put pressure on the business. With productivity metrics you can avoid dips by:

• Identifying productivity gaps. Map out areas for improvement. Maybe you need to upgrade your tech stack or offer more flexible work hours.
• Making data-driven decisions. Apply productivity metrics throughout the company so you can make data-backed decisions. For example, if your HR department lags in responsiveness, you can adjust the team’s workload or rebalance the team to drive higher outcomes.
• Boosting employee satisfaction. When you measure employee productivity, you can acknowledge high performers for their achievements. Showing appreciation to your employees can increase their job satisfaction, which can drive higher employee retention rates.

The link between employee satisfaction and employee productivity

Employee productivity can be an indicator of individuals’ sense of purpose and fulfillment at work. Employees with low productivity might be unhappy, leading to poor performance.

Employees in our 2023 State of Work survey reported that low productivity was linked to several causes. First, they felt less productive when they were involved in too many meetings.

Those surveyed also reported low productivity when they felt unsupported, lacked access to effective tools, or were trapped in information silos.

On the flip side, employees reported that they’re the most productive when their employers embrace flexible work, empower them to attend meetings as needed, provide time-saving tools, and automate repetitive tasks .

Challenges in productivity measurement

Today executives and non-execs are locked in a tug of war over how to measure productivity.

Our State of Work survey found that individual contributors prefer to be measured based on what they produce according to team goals and KPIs. But executives tend to rank visibility and activity as the highest indicators of performance.

Then there’s the challenge of measuring “soft” productivity drivers like motivation and emotional well-being, often overlooked in traditional human resource management approaches.

How to measure employee productivity

Companies are shifting how they measure productivity. Instead of putting all of your attention solely on one data point, like activity, try quantifying productivity according to both hard and soft data points.

Below, we’ll go over some of the ways you can measure productivity.

Quantifying productivity through internal communication tools

One way to analyze productivity is by communication and collaboration. Platforms like Slack gather data around how employees use the tools in the company tech stack and provide insights to help measure workplace productivity. Accessing those metrics helps determine how effective, efficient, and productive internal communication is at your organization.

How to calculate employee productivity

Try measuring multiple data points. Start with metrics like tasks completed, online engagement and responsiveness, attitude, and willingness to incorporate new technology.
Through our 2023 State of Work survey, we learned that most successful companies prioritize equipping their people with technology that accelerates work and unlocks their talent, creativity, and collaboration versus visibility metrics like hours worked.

Executives are measuring cost metrics, visible activity, and KPI and goal achievement as the most important productivity data. Individual contributors, on the other hand, focus on hours spent on specific types of work, conversations with their managers, and then KPIs and goals.

Monitoring and tracking employee productivity

The best ways to monitor and track productivity do not include spying on your employees or tracking their clicks. To garner real results and build trust, try these ideas instead:

• Set goals with your employees. Actionable, time-based KPIs are easy to track and monitor progress.
• Keep an open-door policy. When employees feel that they can come to you, they’re more likely to share when they’re overloaded.
• Reward productivity. Too often, high performers are rewarded with more work, which is a recipe forburnout. Instead, give high performers recognition and perks.

Measuring productivity in remote workers

Remote work can pose challenges, but the strategy stays the same. If a remote worker isn’t delivering or being collaborative, you’ll notice it. Give performance reviews with clear metrics to build trust on both ends.

How to increase employee productivity

At Slack, we found no direct correlation between the pressure to be seen doing performative work and real, measurable gains. On a related note, employees who “feel pressure to respond to messages quickly, even if they’re sent after standard working hours” aren’t more likely to say they feel productive.

So, what can you do to increase productivity? Here are some productivity tips for employees:

• Ditch distractions and multitasking with a platform that supports focus, tool choices, flexibility, and automated workflows. Workers told Slack that collaboration tools used in-office and remotely have helped them be more productive and forge better connections with their teams.
• Make use of automation and AI to save time and energy. Smart tools can handle the repetitive stuff, help you find what you need faster, and even support better decisions—so you can focus on the work that really matters.
• Eliminate performative work and hold fewer, better meetings. Spending too much time in meetings slows productivity. Our research found that almost 43% of meetings could be eliminated with no real downsides.

1. Tap into the power of automation and AI 

While 77% of survey respondents asserted that automated tasks would significantly boost productivity, a whopping 60% reported that their companies had not incorporated AI.

AI and workflow automation have long promised to help organizations operate more efficiently, and they’re seizing the spotlight thanks to major leaps.

AI and automation tools give employees an informational edge, save time and money, improve the overall quality of work, increase employee satisfaction and retention, and reduce dependence on IT teams.

Here’s some things AI for work can do:

• Sales teams can automate deal approvals and customer record updates
• Customer service can use AI agents to escalate to the right contact
• IT teams can monitor and respond to incidents automatically with automated ticketing and Slackbots
• Software engineers can perform AI-assisted code review and testing
• Marketers can automate elements of their social media production and use generative AI to help with content creation

2. Flexibility and employee productivity

Employees who say they’re more productive at work attribute some of their success to a flexible work environment. Flexibility consistently ranks first for what workers want.

More than half (52%) of desk workers say that a flexible work schedule is one of the best ways employers can support their productivity. But the issue is far more nuanced than giving free people rein over their schedules and desk location.

The key is to create workplace policies with intention. It’s not useful to be in the office when no one else on your team is there. Focus on the tasks that benefit from an office setting, like project planning, and align office visits with those tasks.

3. Experiment with new ways of working

The landscape of work is shifting, and we should be experimenting alongside the changes. Fully distributed teams might be more productive by attending quarterly team meetings in person, where they can meet one another and collaborate.

Slack huddles enable the quick, informal discussions that are often missing in remote and hybrid environments. Social channels in Slack help break up the workday with light-hearted discussions about food, movies, books and music to get individuals chatting and connecting.

4. Keep skills sharp and productivity going

Consistent training and development initiatives are essential for long-term employee productivity. When employees have the right tools, up-to-date info, and solid processes, they adapt quicker and do better work. Plus, investing in learning keeps things fresh, encourages new ideas, and helps everyone stay in sync with where the business is headed.

Key takeaways

There is no one right way to measure and improve employee productivity. If you’re looking for new ways to boost output, here are some of the key takeaways from this guide:

• You might not be on the same page as your employees. It’s eye-opening that executives and individual contributors consider productivity on such different levels. To make sure you’re rowing in the same direction, set achievable productivity goals with your employees in 1:1 meetings.
• Quantify productivity with hard and soft data points. Focus on hard data points like activity and output, and soft data like your employees’ well-being, job satisfaction, and collaboration efforts.
• Incorporate time-saving tools. AI and automation can be powerful tools to boost productivity, especially when you implement them thoughtfully.
• Embrace flexible work environments. By giving your employees work options, they can choose the environment in which they feel the most productive. That might be fully remote, hybrid, or in the office. Providing flexible work schedules can be a great way to enhance work-life balance, boosting your employees’ moods and output.