Productivity measurement

In practice, productivity measurement is not straightforward

How would you measure the productivity of a hospital, fund manager, police force, government ministry, 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 – and most organisations offer more than one product or service and each one may require a very different mix of resources

But, at process or task level, there are many partial productivity measures possible

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 the input resource paid for and whether the trends are in the right direction or not
Partial measures 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 – ones which focus his team members on their most important outputs and most costly inputs

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 of ratios possible

However, most of them would be irrelevant to most managers – hence the need to focus only on the important outputs and inputs for each team

The few ratios that managers need will cover some 90% of their teams’ productivity picture

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