11 Employee Productivity Metrics and KPIs That Matter

Company productivity is a recurring business topic since it is critical to staying competitive. Productivity is defined as an organization’s output divided by its inputs. A corporation must not only track productivity but also show how it may be improved. 

This necessitates selecting the productivity measures that will most impact your firm and then regularly monitoring its performance against them.

Productivity can be defined as the efficiency with which individuals, businesses, industries, or entire economies turn inputs into outputs. These four levels are inextricably linked. The aggregate productivity of all individuals in a firm represents the company’s productivity. 

Productivity is easier to assess accurately if, of course, you use KPIs. 

What are KPIs?

KPIs, or Key Performance Indicators, are measurable values organizations use to assess and track the effectiveness of various business processes and activities in achieving their strategic goals. 

KPIs are crucial for evaluating performance, identifying areas for improvement, and making informed decisions. Here are some key points about KPIs:

• Measurability: KPIs should be quantifiable and easily measurable. They often involve numerical data or percentages that can be tracked over time.

• Relevance: KPIs should directly align with the organization’s goals and objectives. They reflect the critical success factors contributing to the business’s overall performance.

• Specificity: KPIs should be specific and clearly defined, leaving no room for ambiguity. This ensures that everyone in the organization understands what is being measured.

• Timeliness: KPIs are often tracked over specific periods, such as monthly, quarterly, or annually. This allows organizations to identify trends, patterns, and changes in performance over time.

• Variety: KPIs can cover various organizational areas, including financial performance, customer satisfaction, employee productivity, operational efficiency, etc.

Why does Measuring Employee Productivity Matter? 

Measuring productivity can help managers understand how their teams work and ensure employees can meet their goals. It also allows organizations to provide timely feedback to employees. 

This feedback helps employees adjust their efforts to achieve business goals. Thus, it is a collaborative effort that requires timely communication and direction from both parties. 

Productivity metrics also help businesses identify areas for improvement on an individual, team, and organizational level.

Therefore, there are several benefits to measuring employee performance and productivity.

11 KPIs For Measuring Employee Productivity

Here are 11 KPIs that you must look at closely. 

1. Projects Completed

This is one of industrial organizations’ most basic definitions of productivity when the same “job” is repeated with little modification. It is a simple counting exercise to calculate: 

How many jobs did the company accomplish in a given period (as defined by the number of jobs done divided by the period)? The target number will obviously vary depending on the task’s complexity and output.

This is a good starting point as it helps evaluate how much work is actually getting done, the status of tasks, and an organization’s output. It also helps prioritize important tasks, and it will vary from team to team and organization to organization. 

2. Revenue Generated

The revenues generated by a corporation from selling items or services to its consumers are referred to as sales. They are one of the most fundamental indicators of a company’s financial security.

It is critical to distinguish between sales and revenue since businesses have additional income sources such as interest, money from litigation, royalties, and other avenues and sectors.  

As a result, income is almost always more than sales unless the company is facing extreme losses and has high expenses. Unlike net sales, Gross sales can surpass revenue because they are not adjusted for returns and discounts. 

It helps organize a business’ growth, revenue, and income. It helps put things into perspective and change tactics if necessary. 

3. Sales Close Rate

Rather than churn rate, which is the rate at which existing customers stop subscribing to your products and services, your sales closing rate is the number of new leads that convert into sales.

If your sales win rate is below these numbers, you must improve and adapt to modern trends. However, how can you begin to make changes if you don’t know your closing ratio?

To start, you only need to figure out the total number of sales leads you have had over a certain period. For instance, you can use sales leads from a particular quarter to give yourself a number.

Once you have that total, compile your total closed sales during that same period and divide that number by your total leads. Finally, multiply that amount by 100 to give yourself a final percentage—this total is your close rate.

4. Sales Growth

Sales growth is the increase in sales of a product or service over time. It measures a business’s revenue from sales performance.

Sales growth can be measured by comparing the year-over-year, quarter-over-quarter, or month-over-month sales. 

Here’s the formula for calculating sales growth: 

• Subtract the net sales of the prior period from that of the current period
• Divide the result by the net sales of the prior period
• Multiply the result by 100 to get the percent sales growth

Companies use sales growth to assess internal successes and problems and by investors to determine whether a company is on the rise or starting to stagnate. 

5. Revenue per Employee

Revenue per employee is an easy calculation to assess the value of each employee. You divide your total revenue by each employee to calculate revenue per employee. 

This KPI indicates how expensive or profitable a company is to run. 

This helps assess a business’ profitability/survivability against competitors in the same industry. This calculation offers a better comparison in companies where employees directly impact the profit, such as sales companies or investment banking. 

When comparing revenue-per-employee ratios, consider how each company completes its daily operations. For example, a company that runs entirely online and a similar company that relies on in-person sales can differ in their ratio.

6. Total Cost of Workforce

The Total Cost of Workforce (TCOW) is a metric that includes the total amount invested in human capital. It’s more than just employee salaries; it includes direct compensation, health benefits, taxes, and workforce overhead. 

This KPI provides management with labor costs and the factors indirectly causing these costs. Nearly 70% of a company’s expenses come from workforce costs, so calculating this KPI is crucial. 

TCOW should also include expenditures on the contingent workforce, outsourcing workforce, or gig workers if they work exclusively or spend a substantial amount of time each month working for your organization. 

Historically, companies omitted these expenses from the calculation, which missed this important source of expenditure.

7. Overtime Hours

The frequency with which employees have to work overtime leads to burnout. It means that workers are unable to meet deadlines during normal work hours and have to work extra time.

Employers should use this KPI to evaluate why their employees are having trouble, whether they need extra time, or whether they simply need more workers to meet demands. These questions will implore businesses to self-evaluate and determine if their management style needs to change.

It could also mean that they are taking on too many projects and work, and their workforce isn’t strong enough to take on so much task load. A great tool to measure work time is TimeBee.

It shows how your employees progress with their assigned tasks and helps evaluate if they aren’t overburdened and must work overtime.

8. Turnover rate

The turnover rate indicates how many employees leave an organization every year. To calculate it, simply divide the number of employees leaving by the total number of employees. KPIs such as the Employee Turnover Rate give a good indication of employee happiness and output. 

Any organization with high turnover rates shows concerns like low morale, ineffective management practices, or inadequate compensation or benefits. Organizations should view this KPI to assess why employees are not productive and feeling burnt out.

After gathering this information, they can use it to improve their management style. 

9. Attendance & Punctuality

Attendance and Punctuality are key performance indicators (KPI) used to analyze staff productivity, dependability, and efficiency. Here’s how it can help in some industries:

• Healthcare:

Attendance and punctuality in healthcare can be used to evaluate employee dependability and patient care. Managers can monitor nurses’ attendance to ensure they provide high-quality patient care.

• Retail: 

In the retail industry, attendance and punctuality can be used to assess customer service and reliability. Managers can monitor their sales staff’s attendance to ensure they provide excellent client service.

• Manufacturing: 

Attendance and punctuality can be utilized to assess employee productivity and efficiency in the manufacturing industry. An assembly line manager may monitor worker attendance to ensure output objectives are reached.

The Attendance and Punctuality KPI can be used to evaluate staff productivity and performance. Employers and businesses can use these metrics to improve staff efficiency and ensure all projects are completed by the deadline.

TimeBee has a robust attendance and worksheet calculator to assess this KPI accurately. 

10. Time To Complete Tasks

This KPI measures your employees’ efficiency and work output measurements against time. It can also identify areas of improvement and if some of the workers are overworked and suffering from burnout.

It is an effective KPI for measuring success and productivity and is viable across many industries.

For example,  in the manufacturing industry, time to finish tasks can be used to assess the efficiency of production lines. Managers may track how long it takes staff to complete specific assembly jobs to discover bottlenecks or potential areas for process improvement.

To measure this KPI, you need accurate time-tracking software. That is where TimeBee comes in. The app accurately calculates time worked, breaks taken, and work sessions missed and automatically fills in precise timesheet data for every employee. 

11. Website Traffic

Website analytics is a great way to determine your team’s productivity and output. They offer a highly measurable KPI for tracking your business’s projects and profitability.

You can view the traffic generated by your website, the customer retention rate, and the bounce rate. These metrics help you assess how much of your work is coming to fruition, generating leads and converting into sales.

This is even better for companies with subscription-based business models like SaaS products. This is because the higher the website traffic, the greater the odds of selling your product. 

What Tools Help Measure KPIs? 

Several tools can help measure and track KPIs effectively. The choice of tools depends on the specific needs of the organization and the nature of the KPIs being monitored. Here are some common types of tools used for measuring KPIs:

• Project Management Tools: These tools help organize your teams and the projects they are working on. You can track the progress of each project and the tasks completed. They also help your team collaborate better and gain useful insights into task completion. We recommend Jira.
• Website Analytics: Website analytics is a great tool to measure how many people interact with your website, new visits, recurring customers, lead generation, bounce rates, and more. These help improve your website and marketing tactics to boost sales and increase the team’s productivity and efficiency, as they now have certain milestones to hit. We recommend Google Analytics. 
• Time Tracking Software: This tool helps calculate worked time, projects worked, screenshots of employee activity, and attendance sheets. We recommend TimeBee
• Survey and Feedback Tools: These help assess your standing in the marketplace. It directly connects you with your customers, gaining insider knowledge and feedback on improving your product to appeal to a wider audience. This is a valuable KPI that can redirect your team to make changes in their work and productivity patterns to appease the customer. As they say, the customer is always right.  We recommend SurveyMonkey as it is useful for tracking customer satisfaction and other survey-based KPIs.

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KPIs Can Be Hard To Measure

Once a company reaches a certain size, it is only possible to track productivity KPIs at the level required to analyze it effectively and make adjustments with the right tools. At that point, it’s more a question of what software your organization requires. 

Tools like time-tracking software make it easier to monitor and improve your workforce’s productivity. However, this must also be accompanied by a robust policy framework that values employee performance.

Once both are in place, measuring KPIs can become an easy task.