Productivity vs Performance

When it comes to increasing productivity, performance or both, you need to be clear about what you want before you apply the right leadership approach. If you want increased productivity, you need to work smarter. If you want to increase performance, you need to lead more humanely. If you want both, you need to lead both smart, and healthy organisations.

When it comes to the definition and the differences between employee productivity and performance, Managers and leaders get confused. There is a subtle yet powerful difference between the two terms, which, when you understand it, will transform how you think about the results you are getting and why.

This lesson explores the difference between employee performance and productivity and why this distinction matters — and how you as a leader, can put measures in place to support and boost productivity and later we will focus on performance.

Performance at Work

Performance is it is a mixture of tangible and intangible factors. The tangible elements describe output, the ability of an employee to complete their work to a certain standard based on certain goals or objectives. The more they do at this standard, the higher their productivity is. The intangible is the performance. The performance of an employee also includes their communication, teamwork, interpersonal skills, time management, willingness to collaborate, motivation, and their general attitude at work.  The intangible is hard to measure, so many managers focus on only what they can measure, and everything becomes about productivity. Yet I have met plenty of team members who are hitting their targets but aren’t performing in appropriate behaviours, unwilling to take on extra responsibilities and create chaos all around them.

The tangible and intangible factors of employee performance matter because both can have a significant impact on the overall performance and culture of your organization. As a leader, you must create both smart and healthy organisations if you really want to boost performance. Focusing only on the smart, efficient stuff won’t guarentee performance success. In fact, you might just survive, hitting targets through cost cutting, pushing and driving your people and create exhaustion and burnout. Is that a trade-off you are willing to make?

So set expectations and standards around employee performance. Make this your priority. These expectations shape the culture, the employee experience, the values and behaviours, and you will see an impact on both performance, and productivity.

Exploring Productivity

Traditionally, productivity was a measure of output over time. Existing since the 19th century approach to work when we were focused on agricultural output, shifting to industrial output. Productivity described the yield of the land and was tracked over time, with changes to soil, seeds, tools and systems to increase land yield. Everything was output focused.

This shifted from the yield, eventually to business, then team and eventually to individual productivity. Again, this was useful when you had people doing like for like work, let’s say in a production line. However, in today’s working environment, few people complete exactly the same function as someone else. It is difficult to compare one person’s productivity against someone else’s. So, you focus on day to day, week to week or month to month, which creates a whole lot of management, data and effort.

So now, leaders shift to efficiency. How can we work smarter, and with technology, systems and processes, there is no excuse for inefficiency in business? The focus shifts to incremental gains, continuous improvement and eventually, when you have sweated all assets, the focus has to turn to performance.

Productivity influences and misconceptions.

Productivity, or working smarter, has many influences. Many are misunderstood.

Here are just a few misleading beliefs about productivity that don’t serve us anymore:

Work more and get more. The workaholic mindset of the 1980’s is still firmly embedded in some organisations. Yet, the forefather of efficiency noted that after 8 hours on a production line, individual performance dropped. Henry Ford introduced the 8-hour day, 5 days a week model that many organisations still (contractually) work to. However, many organisations encourage (or don’t discourage) emails after hours, longer days and workaholic tendencies. Humans are not increasing productivity. They are actually working towards burnout. Research shows productivity dramatically falls after working 55 hours a week. Those that work 70 hours produces the same work as someone working 55 hours. Now we see more companies actually trying to find the optimal level in their organisations, trialling 4-day weeks or flexible working.

Downtime means waste. You know yourself that you work better after a rest or a good night’s sleep. You can’t work hard consistently for 8 hours. Your energy drops. Your focus drifts. So, working through lunches and breaks harms productivity. By taking short breaks, stretching your legs, conversing with others, people become re-energised.

Multitasking means efficiency – Surely, we know this isn’t true. Humans work best by concentrating on one thing at a time. We work better in focused activity without interruptions of emails, phones or people chatting around us. We can multi-tasks, but we don’t work efficiently. It’s like you are spreading your 100% attention over 2-3 things at once, so only working 50% effectively on each activity. And when you switch from task to task, it takes a moment to get your focus back, so you slow yourself down. You are wasting time. So, when you are in a meeting, set the expectation that emails will be turned off. You will put your phones away, and you will find you have better engagement and conversations, or shorter meetings.

Knowing the difference influences your leadership style.

Performance and productivity are different yet linked. If you focus on performance boosting, productivity generally follows. When you you’re your people for regular catch ups, you can gauge team members morale, pressures, motivations and engagement levels. Engaged employees care about their work and contribute to solutions. They want positive and high performing environments, so they are more willing to tell you where productivity blocks are. They will tell you when there are negative behaviours that impact performance. So, focus on performance conversations first, and the smart, efficient and productive incremental gains will follow.

If you focus on productivity first, when performance is low, you will lead frustration and disengagement.

But there is a caveat to this. Increased performance doesn’t always mean improved productivity. Some employees might have the right attitude and behaviours, they might even be hitting the targets, but they aren’t really adding value. It might mean that they are simply operating at their maximum, the goals are the wrong ones or perhaps in the wrong job. This is where you ned to explore further and craft the role to maximise both performance and productivity.

 How to increase productivity.

If we put performance aside for a moment and focus on productivity.

Be aware of productivity rhythms — Where possible, align work with the employee’s natural rhythm. Some people are more productive in the morning and early afternoon, others are more productive in the early evening or at night. Of course, this works in some roles easier than others, but where possible, allow employees to work to their own rhythms and notice the impact on productivity.

Remove the barriers. – Encourage everyone to look at productivity improvement as part of their job. Create an environment where continuous improvement is the done thing. Invest in systems, processes and technology. Be innovative and trial new approaches. Just because it has always been done a certain way, it always has to be done that way.

Encourage regular breaks — Set the culture that regular breaks, water cooler conversations, taking lunch breaks, logging off at a reasonable time, are all expected. Encourage people to take annual leave and rest. As the leader, you can role model this yourself.

Play to strengths — Everyone works better when they are playing to their strengths. If there are tasks that are better suited to someone’s passions, interests or strengths, delegate to them. We have all had work given us that is not fun, really hard or completely out of our skill sets. We take longer, procrastinate and are less efficient. So where possible, craft roles and delegate accordingly.

Get the resources, training and environment right. — This is basic housekeeping, but you can only be productive if you have the resources, the skills and knowledge, systems, tools and environment to do the work. Remove the barriers and work smart.

Provide means for in-the-moment feedback and team communication — Communication is still a huge barrier to productivity, yet it need not be. Technology enables real time communication and feedback so there is no excuse to not delivering a message in the moment. If something isn’t working, communicate it. If something is working well. Communicate it.

Give autonomy. — You won’t increase productivity through micro-management. Hovering over an employee’s shoulder or monitoring their log in times will create stress, resentment and fear. Each time you micromanage, you are actually being a distraction. Allow the employee to find out how they want to work, make decisions for themselves and notice productivity increase.

Hold regular performance catch-ups — Talk to your people often and regularly to identify issues and coach, train or mentor them.

Ask employees for their opinions — Employee feedback is hugely important for continual improvement. They are doing the job and know the blocks to productivity. Ask them and the either empower them to solve the issue or step up and remove the barriers.

Set the right goals. — Are you measuring the right things? Are your goals stretching and motivating? Often, we measure the wrong things in the wrong way. Does the Goal setting for success course to learn more?

Reward, recognise and role model what good looks like. — Employee recognition is a low cost but high impact way to increase productivity and loyalty to your company. Appreciate the work of others, make heroes out of the people doing well, and reward them. It sets the bar of excellence and creates environments based on success does not fear.


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