How to create productivity indicators: 7 examples of KPIs and their benefits for the company

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How to create productivity indicators: 7 examples of KPIs and their benefits for the company

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Every business aims to boost its profits, isn't it? For this, it is essential that those responsible for business management keep an eye on the results of the business. For this it is essential to learn how to create productivity indicators.

Measuring organizational effectiveness is an indispensable step for:

  • evaluate the control of the enterprise;
  • condition the more assertive elaboration of a strategy plan;
  • guarantee increasingly satisfactory results.

However, what are the productivity indicators that should be used in an organization?

The company's productivity can be measured by indicators such as:

  • definition of the analyzed factors;
  • establishment of reference values;
  • analysis of the indication of increased profitability;
  • daily monitoring of data;
  • differentiation between quality and quantity;
  • definition of productive capacity;
  • benchmarking.

These productivity indicators indicate in how long and with how much investment an activity is performed. Allowing to analyze the institution as a whole, identify possible problems and solve them before they generate losses.

With that in mind, we will show you how to create productivity indicators and why to measure the company's productivity levels. Follow the post and learn the tricks to leverage your results.

What are productivity indicators?

Productivity indicators are metrical tools used in performance management that help to measure the organization's results, in a segmented or globalized way.

These data are important to define the company's quality parameters and to identify the demands of time, resources and costs for carrying out any activity.

In addition, it is possible to recognize the failures of the processes, facilitating the creation of corrective action plans to avoid losses and optimize the results.

Obviously, efficiency and performance of employees is not left out of the evaluation of productivity indicators. Therefore, the indicators also allow motivation strategies in organizations and talent management tactics to be developed.

This performance evaluation is extremely important to maintain the constantly growing company productivitybecause it guides solutions and measures based on effective analysis and not intuitions.

How to create productivity indicators?

To define the company's productivity status, it is necessary to pay attention to a few basic steps:

  1. define production standards;
  2. consider the effective result;
  3. compare the data.

When defining the minimum acceptable standards for what will be evaluated, it is possible optimize performance of the company, readjusting processes that are below the limit and leveraging those that are above.

The comparison between the expected result and the achieved it can be done in detail, identifying all stages, employees, sectors, machinery, processes that deserve more targeted attention. And so, correct any situation that compromises the productivity of the company as a whole.

It is worth remembering that measurement alone is not enough, it is necessary that corrective actions applied in order to answer: how to optimize processes and results.

What are the best examples of productivity indicators? 7 examples

Each company must establish the most appropriate indicators for its market reality and for the objectives of its performance management system. However, some of these metric references are quite interesting for evaluate productivity from the company. Check out the main ones!

# 1 Definition of the factors analyzed

First of all, it is necessary to define what is being analyzed. There is no ready recipe that works for all areas of the company, so each sector must determine the specific factors that influence productivity of the company, considering the market trends and the periods of the year.

Some examples are:

# 2 Establishing benchmarks

As we said before, when learning how to create productivity indicators, it is essential to establish reference values ​​for the company valuation.

Thus, it is possible to identify whether the company has efficient processes and whether or not it is achieving its basic goals.

If the average results are below the benchmark, there is an urgent need for changes in strategies to reverse the negative situation.

If the average is at the acceptable limit or above, the strategies have been effective and can improve even more, since the search for increased productivity is continuous.

# 3 Profitability indication analysis

In addition to knowing if the goal is being met, it is important to analyze the net profit that the company achieves.

This indicator shows the operational efficiency obtained in the form of a percentage value, that is, what is the gain that your company generates from a developed work.

Profitability is what defines whether it is worthwhile to continue with a project.

Read too: Goal management: 5 steps to engage the team and measure results

# 4 Daily data tracking

Another example of an essential productivity indicator for measure productivity of the company is the monitoring of data.

It is very important that the team responsible for this assessment, usually the leaders and the Human Resources (HR) sector, monitor the indicators daily, so the identification of dissatisfaction can be done promptly and remedied efficiently.

The feedback culture is a smart strategic action to help solve these negative results, whether from a specific sector of the company or from countless employees.

Regardless of the source of the problem, it is the responsibility of the HR monitor these issues and offer conditions that alleviate obstacles and motivate the workforce. After all, motivated employees are much more productive.

# 5 Differentiation between quality and quantity

How to create productivity indicators without considering the quality of deliveries?

When it comes to the company's productivity, the quantity of products and services delivered is soon increased. However, monitoring quality indicators is an indispensable factor for measuring results.

It is useless to produce many products with little commercial adhesion, for example. THE qualityand it is essential for the fulfillment of the defined goals strategic planning and stimulate profitability.

HR has a fundamental role in this process, as it can offer training to employees so that the quantity and quality are worked in harmony.

# 6 Definition of productive capacity

For quality to be the norm in the company, it is important to have knowledge of the capacity indicators.

With them, the quantity produced in a given period of time is measured, allowing the limits, which guarantee the excellence of products and services, to be respected.

# 7 Benchmarking

Consulting references will always be a smart move, so benchmarking companies in the same segment as yours, and who have already experienced the difficulties your company is experiencing, is very important.

Thus, your business strategies gain new parameters of assertiveness and the knowledge management is reinforced, preventing the same mistakes from happening again.

Learning how to create productivity indicators and measure their results is essential for anyone looking for continuous development, as it is an excellent way to detect procedural flaws and optimize workforce performance.

A strategic HR considers the impacts that the examples of productivity indicators listed above, among others, generate for the organizational results, for this reason it reinforces the union and the satisfaction of the collaborators, directly influencing the company's productivity.

Read more at: 5 key HR indicators to optimize results

Need to improve your business results? Contact HR Consultant UK and find out how we can help with this process. We are a Human Resources platform that reduces the time spent on HR activities and people management and optimizes your processes. Talk to an expert and find out how to reduce your HR costs by 30%.



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