Measuring productivity: outcomes vs. hours

Thanks to the internet – and especially to social media – staff now have more distractions to choose from than ever before. Although some businesses have responded to this with restrictions and guidelines, others have chosen to change how they gauge staff productivity to accommodate what they see as part of a modern workplace.

These businesses have shifted the focus of their management away from hours spent on a project and onto the quality and timeliness of the work that’s produced.

The benefits to this approach are clear – given free reign to complete set tasks, staff are happier, as they have more autonomy in their work. A greater sense of ownership over their roles also encourages them to have pride in what they do and to produce better work. In turn, supervisors avoid the time and stress that micro-management costs them, allowing them to focus on cultivating positive and productive company culture.

There are downsides too – not all employees will use this autonomy wisely, and some could use this freedom to mask how much more work they could be doing. Regardless, it’s worth considering – could a change in focus from hours to outcomes make your business more productive?

Different roles

While it’s tempting to take a particular side in this debate, the truth is that neither approach is a silver bullet when it comes to gauging an employee’s performance. Some roles are simply best suited to time-bound objectives; others can reasonably be managed according to deadlines met and the quality of the work.

“It’s not actually about the people, it’s about the role,” says Anita Ziemer, managing director of Slade Group. “If you think of a role, and you dig deeper into what the core of the role entails, you can determine which side of the fence it sits on.”

For example, in an office, the role of a secretary would primarily need to be measured on the number of hours spent at the front desk. They can’t move far from their post, as they need to greet customers and answer the phone – but there is a degree to which their efficiency, and thus their productivity, can be measured. On the other hand, someone working as a copywriter or web designer can be considerably more outcome-focused – provided they meet deadlines, their responsibilities don’t necessarily bind them to the office.

Will it work for you?

Aside from deciding over individual roles, it’s important to establish whether or not an outcome-based focus will suit your business as a whole. If your business is productive and profitable operating on a clock-punching basis, then it may be disruptive to change that approach.

“Ask yourself: ‘are we an organization that can cope with having a workforce that is not measured by attendance?’ They are rarer than those who don’t because there are a lot of organizations that get comfort from seeing people at work,” says Ziemer. “In anybody’s letter of the contract, you’re paid for 38 hours per week. That itself is a very defining statement. There’s a psyche about the time you put into a task. To actually shift the thinking is a major shift in how an organization operates.”

The first step to making outcome-based roles work as part of your business is to find staff that is likely to rise to the challenge of accounting for their own productivity. There’s also the obstacle of changing the office culture to accommodate both hours-based and outcome-based roles so that each staff member understands how expectations of them differ from those of their colleagues.

“It’s about saying one staff member is on reception and is required to be there between 8.30 am and 5.30 pm, but another staff member, who uploads the website content, is paid a permanent salary, but their role is measured by productivity,” says Ziemer. “It’s about having those conversations and changing the culture. It’s almost easier to create those cultures when you’re a startup or a small business.”

Effort over hours

Changing how you perceive a staff member’s productivity may be a challenge, but it could prove to make your business more efficient and have a positive effect on workplace culture.

Peoplebank’s CEO, Peter Acheson, explains that the motivation to introduce an outcome-oriented approach in his company was to keep staff on-topic.

“The major driver was to get all our staff focused on the key things we need them to do in terms of their job roles, and ensure, via a formal key performance indicator (KPI) process, that they’re focused on the six or seven key things we need them to do,” he says.

Part of the company’s approach is to involve staff members in drawing up their KPIs.

“If staff are being brought into the process, and feel they have significant input into the setting of the KPIs, then they’re much more likely to ensure that they’re delivered,” continues Acheson. “You get a greater buy-in and a greater level of engagement from people when they’ve had involvement in this KPI setting.”

If a staff member performs so well in an outcome-oriented environment that they run out of work to do, then it should be clear that their KPIs need re-calibrating.

“If someone’s achieving their KPIs by only coming in two days a week, then clearly the KPIs need to be reviewed because there’s the capacity for that person to take on more work,” says Acheson.

Staff as cost

It is difficult for many business owners to stop micro-managing and allow staff to pursue self-set KPIs. Trying to view staff as a profit-driving cost can help.

“If you look at it as the staff is a cost, and the benefit is the quality and output that they produce, then you can get more of a mathematical dollar figure on the output,” says Bianca Petrevski, client services manager at Nimic Productions.

She explains that because Nimick is an online video and audio production company, it’s very difficult to quantify staff output according to the hours they’ve worked.

“We’re in a more creative-oriented business, so you can’t really put your thumb on hours,” she says. “It may take more hours to come up with something amazing, but at the end of the day, it’s worth it, because the quality is obviously a lot higher.”

Distractions vs. productivity

Giving staff free reign over their work also places the management of distractions like social media and email into their hands. This can work to mask a staff member’s true potential; a task that takes them eight hours with distractions might only have taken them five without. Nimick’s Petrevski believes that allowing staff to moderate their own social media usage is an unwise move.

“That will work for a certain amount of time, but then where’s the balance?” she asks. “Then, abuse starts happening, and it’s kind of like ‘I’ll just do it later so I can be distracted now.’ You sway the culture, and everyone’s got their own little rules.”

Accordingly, a more rigorous approach to social media is taken across the board at Nimick.

“In our arrangement, social media is only used at lunch,” says Petrevski. “The best way of doing that is to make a culture in that you have to respect that work time is work time, and social media, depending on the industry, isn’t. If you understand your office and its culture, and you’re able to develop it so that everyone understands and respects that they’re here to work, at the end of the day, not to be on Facebook.”

The downside of policing distractions in an outcome-oriented office is that it dampens the enthusiasm and task ownership that autonomy and self-management can give staff.

“I don’t like to micromanage my staff, so as long as they’re productive and are meeting their KPIs, then I don’t really care if they’re doing personal things such as social media and emails,” says Elizabeth Ta, creative director of 4Promote.

“Unlike a lot of companies, we don’t block social media, because it’s unrealistic to say you can’t have any personal emails, or you can’t go and check your Facebook,” she continues. “It just gives them more sense of ownership in their time management. Let them own up to their schedule, and how they want to manage that.”

Ta explains that 4Promote has come to this approach by way of trial and error.

“We have put programs onto the computer system to measure time and what they’re going on and stuff, and it just doesn’t work,” she says. “At the end of the day, if an employee’s going to do that, and that’s what they choose to do over the job that they’re paid to do, they’re going to do that regardless.”

Each to their own

One of the most difficult things for a small business owner to accept in an outcome-focused office is that staff will always perform tasks differently from how the owner would like to see them done.

While it may feel like the right thing to do, it’s important to abandon the compulsion to correct staff at every turn, as this can be stressful and time-consuming. As long as they are meeting deadlines and working to an acceptable standard, then time otherwise spent micromanaging can be used for more constructive means.

“At the end of the day, when you have full-time employees that have eight hours to fill, they’ll always find a way to fill the whole eight hours, whereas when you get contractors or people who are on projects, they want to finish their project as quickly as they can so that they can move onto their own personal or more exciting things,” says 4Promote’s Ta. “Frankly, if I have an employee that needs to get a certain amount of things done, I really don’t care if they can get it done in four hours instead of eight, as long as they get it done.”

Expectations

The key to making sure employees perform their set tasks without micromanagement is to ensure they understand exactly what is expected of them, in detail.

“It’s really important that people are clear on what’s expected of them on a day-in-day-out basis,” says Peoplebank’s Acheson. “If the manager doesn’t reinforce the important things a person needs to do, then ultimately what occurs is confusion and lack of engagement.”

He explains that Peoplebank’s management involves each employee in outlining the expectations associated with their role, and linking them to a ‘competency framework’.

“In every role, we’ve defined the competencies a person needs to exhibit in each of their roles,” he continues. “As part of the review process, if they’re not yet exhibiting performance on all of the competencies, then we put in place a development plan to make sure they are.”

There will always be some staff that takes a focus on outcomes as an invitation to do exactly as they please. 4 Promote’s Ta says that providing clarity is the key to dealing with staff members who bend the rules.

“Even before someone’s hired, it’s very clear where we stand on personal stuff at work. It’s not that we don’t allow it, but it has to be done in moderation, and it can’t impede the workflow,” she says. “When that happens anyway, then we’ll address the issue, and we’ll ask ‘what can we do to make this no longer a problem?’”

Nimick’s Petrevski takes a similar approach.

“A lot of the time, I find that it’s the sheer fact that people just don’t realize that what they’re doing is not being productive at all,” she says.

Even a simple conversation with a staff member outlining how they can improve so that the whole team benefits can help to get distracted employees back on track.