Why and How productivity should be measured

Why Do We Need To Measure Productivity?

• Productivity simply measures the capability of the human capital to produce the necessary output. Organizations that grow without taking the productivity into factor do not really reap the benefits of growth as their “Expenses” grow with the increased turnover. Real growth comes from higher turnover with lesser increase in human capital.
• Increasing productivity is not that difficult but what is not easy for most of the organizations is to measure the “Productivity” of the project personnel. In absence of reliable and scalable scales to measure the existing productivity, the whole initiative of increasing productivity ends up being a “Guess work”.
• Once the existing (average productivity) is benchmarked than actual goals for productivity improvements can be set and used in the KPI or KRAs of the personnel appraisals.
• Productivity benchmarks also allow us to identify which personnel have a higher productivity and which of them have a lower productivity
• A simple of act of finding how many persons are needed for a particular project becomes a guess work without productivity benchmarks
• Productivity benchmarks are the best insurance against “Economic and Market Downturns”
• Productivity benchmarks bring about science in the hiring process and evaluation process and promotion as well as appraisal process
• Removes (almost completely) unhealthy practices and unhealthy politics that is usually followed in organizations with weak productivity measurements

Why Not Standard Benchmarks?

• Each organization is unique and are affected with a unique set of cultural and environmental and domain related challenges
• Industry wide benchmarks are a bit too general and they could be at best used for guidance only. Organizational specific organizational productivity factors have to be established to ensure organizational growth
• Each organization has its own unique strengths and weaknesses and they need to be accounted for before benchmarking the “Organizational Specific Productivity Factors”.

Steps In Establishing Productivity Benchmarks

• A basic fact finding study would be conducted
• A detailed proposal would be given to the organization based on the fact-finding study.
• Post approval of the proposal a detailed study would be conducted to understand all the environmental factors, domain related factors, existing human capital, existing processes maturity, national regulations, HR policies, technical challenges and other industrial and cultural challenges.
• Post the detailed study first release “Productivity Benchmarks” would be released.
• The first release “Productivity Benchmarks” would than be put to  test  in a “Controlled Pilot” environment to understand accuracy and process variations.
• After fixing (if needed) the first release “Productivity Benchmarks” the second and final version would be released to the organization
• The key stakeholders would than be trained on how to keep measuring and how to use the “Productivity Benchmarks”.