Simplicable Guide

7 Examples of Productivity Management

John Spacey, July 20, 2022

Productivity management is the process of increasing the value created in an hour of work. Productivity is basic economic gravity whereby a firm with high productivity can be both profitable and a good place to work with high wages and attractive working conditions. A firm with low productivity will either be unprofitable or will be unable to offer employees good working conditions and wages. The following are foundational examples of productivity management.

Productivity Measurement

Productivity management always begins with measuring productivity. At the highest level, this is revenue per employee. Productivity can also be measured with the productivity formula and with custom metrics such as widgets per hour.

Employee Productivity

Productivity management can be seen as an alternative or complement to employee performance management that fights the tendency for employees to set conservative performance goals that don't map to much work throughput. This would require that productivity metrics be at the heart of employee evaluations.

Process Productivity

Measuring the productivity of business processes and either optimizing them or reinventing them to increase output per employee.

Strategic Productivity

Productivity as a goal of strategy. For example, exiting a business that is labor intensive.

Automation

Generally speaking, automation increases productivity. For example, a firm that automates order fulfillment that shifts jobs from manual labor towards engineering and coding positions.

Capital Investment

Capital investment can greatly increase productivity. For example, a farmer who invests in a harvester that allows one person operating a machine to do the work of 20 manual labors.

Tools

Tools can reduce or increase productivity. For example, a firm with cumbersome and unusable systems that represent a drag on productivity, culture and morale. Productivity management can look at the details of each process, step and tool interaction to identify improvements or bottlenecks that need to be reinvented.