Stop focusing on employee productivity. Start measuring Outcomes

Let’s face it, one of the main reasons managers resist adopting a hybrid work model is concern about remote workers’ productivity compared to those in the office. Microsoft’s “Productivity Paranoia” report reveals that while 87% of employees assert their productivity in hybrid work models, 85% of managers within the same organizations express doubt about the validity of these claims.

This raises the question: What precisely are we measuring when we attempt to gauge productivity?

Productivity is in essence a mathematical equation – output divided by time. The notion of productivity indicators emerged during a different era, when the advent of machinery in agriculture and industry allowed for the measurement of increased output among farmers and production workers. As working hours remained relatively stable during this transition, overall productivity increased. Gradually, the productivity index became a reliable metric, extending beyond traditional sectors to encompass knowledge-based domains, such as office work, education, and healthcare. The utilization of mathematical efficiency measurements provided us with tangible numbers and data, instilling a sense of assurance.

But this assurance might be misleading for knowledge workers as we try to understand whether they are productive now that we cannot see them in the office every day. Because what we are measuring as productivity might not automatically translate into achieving the desired results:

Your team may successfully complete the development and production of numerous products that no one will buy.

Your customer service organization may diligently handle and resolve numerous inquiries, but unsatisfied customers will choose to leave.

Your marketing team may produce an abundance of blogs and social media posts that no one will read.

In the world of knowledge workers, fixating on productivity can lead us down the wrong path. Just spending endless hours in offices, sending loads of emails, and attending countless meetings doesn’t necessarily mean we’re creating real value for customers and the company. Take a development team, for example. If their performance is solely based on meeting deadlines, they might get caught up in making minor tweaks that don’t really impact purchasing decisions, pricing, or customer satisfaction—leaving overall business outcomes unaffected. In fact, such measurements might unintentionally discourage them from taking on bold projects that require more investment and come with higher risks.

Our current productivity measures are outdated and fail to acknowledge the human elements that are integral to work. Overemphasizing productivity indicators for knowledge workers disregards critical factors like innovation, risk taking, quality, and long-term outcomes. Moreover, this approach also has detrimental effects on employees’ work-life balance, impacting their motivation and sense of connection. Merely pushing individuals to do more without equipping them with the necessary tools and resources results in longer work hours and a faster pace, which ultimately burdens them and prevents them from fully utilizing their capabilities.

Knowledge workers harness the power of their intellect and passion. Their productivity cannot be simply measured through inputs, such as the quantity of ideas generated within a given timeframe. Rather, it is derived from the impact of these ideas and the underlying factors that contribute to their effectiveness, including creativity, innovation, product and process quality, and more. It is through these elements that knowledge workers truly excel, making valuable and impactful contributions.

Rather than focusing solely on productivity, it is crucial to measure whether knowledge workers are effectively delivering the desired results for customers, while also considering their experience as employees in the process.

Outcome over Productivity

Ultimately, the key focus should be on achieving results for customers and the overall success of the business. This requires shifting away from the narrow measurement of input components. Instead of measuring a marketing employee on their ability to publish a specific number of blogs per week, it is more effective to encourage them to increase website visitors and extend their average duration on the site by 5%, while also exploring any correlation with purchase decisions. Similarly, rather than solely measuring the quantity of customer inquiries handled within a given timeframe, it is important to assess the nature of these inquiries and address them in a way that eliminates the need for future customers to reach out. Additionally, evaluating customer satisfaction with the handling process and monitoring customer retention are crucial metrics to track. By focusing on these outcome-oriented measures, organizations can better align their efforts with customer needs and drive business success.

Measuring results redirects the conversation between managers and employees towards what truly matters, encouraging them to explore alternative approaches for achieving those outcomes. Increasing website traffic and attracting potential customers can be accomplished through a range of strategies beyond solely relying on blog posts. By focusing on outcomes, employees are empowered to think creatively and consider diverse avenues for success. Moreover, measuring results instills a sense of accountability and ownership. When the sole emphasis is on milestones, for example, responsibility tends to wane once the task is completed, and attention swiftly shifts to the next item to be measured. Conversely, managing outcome and impact ensures accountability endures, with continuous feedback, iteration, and adaptation until the desired outcome is achieved.

Define leading indicators

One reason for the focus on productivity is that they are better leading indicators compared to lagging outcome indicators. But it is possible to design leading indicators for outcome, which act as early signals to gauge progress towards the desired result. For instance, stating that “We are halfway towards reducing customer support calls by 30% this year” serves as a powerful leading indicator, generating a sense of accomplishment, particularly if the milestone is achieved ahead of schedule. On the other hand, recognizing a lag in progress can create a sense of urgency, prompting innovative thinking to regain momentum and realign efforts towards the intended outcome.

In the case of a service center, shifting from a productivity measure (reducing the number of service calls) to result measures (customer retention, improved satisfaction) reframes the reduction in service calls as an indicator of the desired outcome, rather than the outcome itself. Within this process, leading indicators encompass various milestones aimed at establishing a customer-centric infrastructure that promotes independent issue resolution, reducing the need for relying heavily on the service center. These indicators involve effectively addressing the most common or customer-churning questions, evaluating the utilization of created content, identifying areas where customers still resort to phone contact, highlighting potential content insufficiencies or unmet needs. Additionally, continuous improvement indicators track the rate of change, such as the decline in support demands or an increase in customer adoption of the service. Progress in these indicators indicates a learning process moving in the right direction.

Focus on Employee Wellbeing

Focusing on customer results in today’s era calls for a win-win relationship between people and organizations. Your best people work not because they have to, not because you tell them to, not because you measure them on it. They work because they want to. Because working for you is their way of achieving their purpose in life.

This underscores the importance of fostering a culture of trust, autonomy, and psychological safety in the evolving work landscape to enhance the productivity of knowledge workers. It is vital to acknowledge that employee happiness is not merely a byproduct of efficiency; rather, it plays a pivotal role in enabling effectiveness. To cultivate connected and engaged employees who take ownership of both their tasks and outcomes, organizations must address the holistic needs of employees, encompassing both their work and personal lives. When employees bring their whole selves to work and leverage their diverse capabilities, exceptional results can be achieved.

To ensure the effectiveness of your employees, even when they are working remotely, it is crucial to shift the conversation towards desired outcomes rather than adhering to a rigid to-do list. Granting individuals autonomy to determine how they can achieve those outcomes is key. By adopting this approach, you will experience the benefits of increased employee engagement, as knowledge workers are not satisfied with being mere cogs in a strictly measured system. They strive to understand how their actions contribute to the ultimate goal and desire control over their work, including the freedom to decide when and where they can best achieve the desired results. As long as they deliver the desired outcome, the specific details of where and when they worked should be of minimal concern to you.