The OECD defines productivity as ‘the ratio of a volume measure of output to a volume measure of input’.
By extension, workforce productivity is the amount of goods and services that a labourer produces in a given amount of time. However, as well as being simply quantative, many authors now agree that in order to be truly meaningful, the definition of productivity needs to encompass concepts such as quality changes, innovation, and efficiency.
So, what is your return on investment? How much ‘bang’ are you and your organization getting for your ‘buck’? Hundreds of billions of dollars have been spent globally in investing in IT, and after growing strongly in the 1960’s, there was an alarming slow-down in productivity increases in the 1970’s and 1980’s, prompting the famous statement in 1987, by Robert Solow, a highly esteemed American economist and nobel laureate that ‘you can see the computer age everywhere but in the productivity statistics”.
This concept is sometimes referred to as the Solow computer paradox, but is now more popularly known as the Productivity Paradox, following an article by Erik Brynjolfsson from MIT in 1992.
Simply put, the productivity paradox is that there has historically been a massive discrepancy between the amount of investment in IT and the productivity returned. This has implications at organizational, national and global levels. It poses the question: why has the enormous investments in IT not historically resulted in increased productivity in organizations beyond a certain level?
‘Organizational Linkages: Understanding the Productivity Paradox’ (1994) is one of the very many books, research projects and articles that are available on this particular topic.
In Chapter 5, William Ruch recognises the complexity of the relationships between the productivity of the individual worker and the total performance of the organisation.
He states that ‘ within the organization, individual workers performing specific jobs form the base level of all productive endeavour’. He illustrates this using the diagram below:
This diagram has thought processes travelling laterally and vertically, but to choose one element for now:
Reading horizontally across the bottom of this diagram, the Goal Alignment model indicates that the individual and group productivity results would sum to the productivity of the next higher business unit, and ultimately to the productivity of the organization.
And so it can be seen that individual worker performance is essential to the overall performance of the organisation. When those individual workers are remote workers, does this create a whole lot of issues? Not really.. because whether the worker is right there in front of you in head office, or in their virtual office 100 miles away, the issue is the same – the need to measure individual-level productivity.
In RWorks, we have addressed this by allowing:
- Workers to see their own productivity at all times
- Managers to see the productivity of individuals and of the entire team
For example, when a worker is assigned a task, RWorks determines when they are working on that task, how much time they spend on that task, what tools they are using to complete the task, and also updates the progress information for the project. In turn, managers can see instantly the detailed productivity of an individual worker, or the progress of an entire team on all of their assigned tasks.
In Chapter 6 of the book mentioned above, D.Scott Sink and George L. Smith Jr. state that this measurement and analysis of individual-level productivity is of paramount importance.
They write that productivity measurement:
- provides specific direction, and guides the worker towards productive activities,
- that a measurement system provides a means to check progress towards the objective, which can be additionally a major part of the employees evaluation leading to rewards or disciplinary action,
- that the examination of trends helps to identify problems before they become crises and permits early adjustment and corrective action,
- that productivity measurement provides information on costs, time, output rate and resource usage to allow decision making,
- and finally that productivity measurement supports innovation. This is because productivity analysis combined with cost data aids in the evaluation of proposed changes to existing products or processed and the introduction of new ones. This is one of the primary foundations for the continuous improvement efforts that are both popular and necessary for survival in business firms today.
I have written in my previous article that remote working has many benefits for employees and employers, that it is on the increase, and I highlighted the challenge of geography in managing a remote team. A really effective communication system incorporating remote management software such as RWorks, is of paramount importance to doing this successfully. The measurement of individual and group productivity is a key part of that communication system, relaying information to the worker about how they are spending their time and what progress they are making on their assigned tasks, and also relaying very detailed information to the manager about how the various projects are progressing.
In using an effective system of measuring worker performance analysis such as RWorks, intuitive software is employed to remove another barrier to successfully employing workers remotely .
