Productivity measures

• In practice, productivity measurement is not straightforward

• How would you measure the productivity of a hospital, fund manager, police force, government department, bank or PR firm?

• At organisational level, there’s no one meaningful total productivity measure available because of the complicated mix of processes and tasks, or outputs and inputs involved

• Most organisations also offer more than one product or service – and each one may employ a very different mix of resources and methods for using them

• However, at process or task level, there are many partial productivity measures possible and useful

• Some focus on just one output from just one input to a whole process or task – for example:

                   Mortgages approved in a week     or      Tins produced in a shift  
                      Staff employed in a branch                               Canning line

• They measure what’s got out of an input resource already paid for and highlight whether trends are moving in the right direction or not

• They also let you compare actual with past performance levels in-house or best practices outside – and they raise alarms if and when things start to go wrong

• Each individual manager should have at least one partial productivity measure which focuses his team on their most important outputs and costly inputs

• However, thousands of partial productivity ratios are possible

• Perm any one output with any one input in any organisation and one can soon see the blizzards that could arise

• Most of them would be irrelevant to most managers

• Hence the need to focus only on important outputs and inputs for each team

• Overall, these few should cover some 90% of their teams’ productivity picture