Measuring Productivity

Entrepreneurs, do you know if your employees are productive? Or productive enough? Should you? Claiming to have good employees is one thing, but backing it up with data is essential.

Do you establish metrics to measure productivity directly based on your annual company goals?  Are the metrics simple and easily understandable? Do you communicate them effectively to your employees? How often do you post or discuss measured results? Are there periodic meetings to analyze performance and develop methods to improve productivity?

“Doing more with less” is a nice slogan, but proving it with productivity measurement data makes it more meaningful.

If you do measure productivity of your employees and do obtain successful results, have you aligned your reward systems to be in line with productivity improvements?

Improving productivity of your employees is a sure way to deliver more to the bottom line. Are you doing that? If not, why?

Ravi Patel


Revenue per Employee

A useful macro measure for tracking productivity is Revenue per Employee.

Revenue per Employee can be tracked on a monthly basis by dividing the rolling 12-month revenues by the average number of employees during the month.

Monitoring the trend line demonstrates your efforts in increasing revenues per employee. More importantly, Entrepreneurs should compare the Revenue per Employee measure for their company to the standard in their industry. Is your company above average in your industry?

Ravi Patel