productivity management

Why is productivity important in the workplace?

Productive companies have lower costs, higher output and more motivated employees. Read on to know how you can raise productivity in your organization.

What is productivity?

It is not an overstatement that talent is the most vital resource that drives an organization forward. This holds true even more so in emerging enterprises that need to run at high productivity levels to optimize their cost of operations and other investments. However, if the employees are not being productive enough, then this surely is a cause for concern.

Productivity can be defined as the level of efficiency with which employees are able to accomplish their allotted tasks and achieve the company’s objectives. This may vary slightly as per the nature of your business, such as products or services. Productivity directly affects all aspects of the workplace including self, team members, company’s cost of business, and customer deliverables. With so many critical touchpoints, it is no wonder then that organizations lay high emphasis on measuring employee productivity and finding ways to keep it high.

Types of Productivity in the Workplace

While performance can be rather subjective, productivity is an objective concept and hence both are measurable as well trackable. In fact, productivity results are one of the key inputs for executives to make data-driven decisions around corporate planning, workforce management, process improvement and so on. The three main inputs used in the calculation of productivity include labor (human resources), capital, and materials. Using variations of these, typically, productivity can be categorized in 3 types:

  • Partial-Factor Productivity: This form of productivity considers only one of the three inputs. This is the easiest to calculate and usually the data for this is readily available. This is why it is often used to benchmark specific processes or activities. For ex: average output per person-hour, or average output per material asset.
  • Multifactor Productivity: When more than 2 inputs are used in the calculation, it is referred to as Multifactor Productivity. So, if the output is weighed against the person-hours utilized and the employee’s cost to the company, then we are looking at an example of multifactor productivity.
  • Total Factor Productivity: A more high level type is the total factor productivity wherein all inputs are considered into the equation. Often used when discussing productivity at national or state level, in this type total output is divided by all the different resources used as input, including raw material, cost of automation, power and energy, and so on.

Benefits of increased workplace productivity

The advantages of increasing workplace productivity are manifold. Some of the more tangible ones include:

  • Increased output
  • More efficient usage of inputs leading to reduced cost of business
  • Improved customer satisfaction parameter such C-Sat and NPS scores
  • Higher quality of output
  • Minimized overheads

The intangible benefits include:

  • Higher employee morale
  • Elevates loyalty towards towards the organization
  • Encourages camaraderie among team members

Activities that increase workplace productivity

Here are some of the activities that can help increase workplace productivity in your organization:

  • Quality Face-Time With Employees: This has become especially more relevant in the post-pandemic with the prevalence of remote and hybrid working models. Set up regular one-on-one meetings with your employee to reduce the distance. Don’t go overboard also by catching up too frequently, lest they feel being micromanaged. Once a month is usually a good benchmark to spend quality time with each employee.
  • Employer Wellness Programs: Another trend which has been more evident in the recent couple of years is the focus on holistic well being. Online programs and initiatives geared towards dealing with stress and depression, financial literacy and health, and tie-ups with medical apps can go a long way to alleviating your employee’s anxieties, thereby rendering them more productive.
  • Open and Transparent Communication: While communication has always been held in high importance it has taken on a more significant role in the hybrid working era. With new hires not able to meet their team as regularly as earlier, clear communication channels need to be in place to convey company goals, objectives, and expectations. This alignment needs to be complemented by a reverse channel of seeking feedback and acting upon it as well. It can raise morale as well as provide an influx of new and innovative ideas to run your business.
  • Off-Work Bonding Initiatives: “All work and no play…”. With so many lockdowns and social restrictions, it may be worthwhile to rekindle the camaraderie and team spirit among your employees. Short offsite events or activities hosted within the office can act as a distraction while also helping employees destress and become more relaxed.

Tips to increase productivity in the workplace

Here are some more helpful tips to increase workplace productivity:

  • Promote a healthy workplace culture: Studies have shown an increase of 12-15% in productivity in companies with a strong and inclusive workplace culture.
  • Create clear KPIs and metrics: The metrics on which productivity and performance should be SMART and transparent. Each employee should be aware of the calculation and how their contribution fits into the overall picture.
  • Invest in technology to aid your employees: Technology can be a great enabler to improve productivity at your workplace. Invest in technologies that reduce time and effort.
  • Provide resources to stay productive in hybrid work setup: With a large portion of the workforce working remotely, ensure that your employees have access to all the right tools and resources to stay productive.
  • Hire prudently: Don’t hire purely based on skill sets. Gauging cultural fitment and an alignment of values are also important aspects of hiring, especially for sustained productivity in the long run.


Simply put, productivity is the ratio of output in comparison to the various inputs necessary to produce it. Productivity is an important measure of the health of the business and ample emphasis must be put on reaching optimal levels. A combination of human cognizance and technology-backed initiatives can go a long way in raising productivity levels in your organization.

For example: An online cloud-based HR software can address several aspects of productivity.

  • Easy onboarding for new resources
  • Always accessible training and learning modules
  • Employee self service features to access and manage your employment daya
  • Central hub for company policies and procedures
  • Reduction in time and effort for all hiring and HR related manual tasks
  • Higher quality of hiring with lower higher costs and TATs



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