I recently attended a fantastic Leicestershire CIPD event where Ian Brinkley, the Interim Chief Economist of the CIPD, answered this question. The main headlines were:
Headline 1 (Very good reminder): Don’t confuse productivity with effort! Productivity is the ratio of the output of goods and services to the number of labour hours required to produce that output.
Headline 2 (Not too much of a surprise): High productivity generates business growth and all the good things that come with that. Low productivity ….yes …… you’ve guessed it ……..will, over time, destroy a business and the people in it.
Headline 3 (Thank goodness for that): Some organisations are bucking the trend and have increased their productivity. They are the ones that have reacted quickly, are still investing in training, and are embracing the digital world.
Headline 4 (There is hope): There are things that HR can do to drive productivity (and they don’t include time and motion assessments):
1. Champion productivity measures – Many organisations measure performance but not productivity, so won’t even know whether they have an issue until it’s too late. You don’t need a complicated measure – but you do need to be able to track and compare trends to know if you are getting better or worse.
2. Keep an eye on the workplace culture – This will range from the physical environment in which people are working (put simply, it should be organised, safe and clean), the processes they are following (e.g.: Quality Management), the leadership they receive, and the beliefs and values (implied or explicit). If any one of these is not quite right it’s likely productivity is lower than it has to be. Changing organisational culture is not easy but you may not need to change all of the ingredients to make a difference.
3. Drive the business case for investing in training , especially of a vocational nature. This will increase the skill base, enabling the business to respond and adapt more quickly than its competitors. Evidence exists to show that businesses that stop investing in training become less productive than those who continue to invest.
4. Ensure effective workforce planning . Too many employees? Not enough? Are they working in the wrong place at the wrong time and/or on the wrong activity? This will all affect productivity. HR can play a key role in helping to shine a light on this one.
5. Understand the skills in the business - and utilise them. By 2020 more than half the people in work in the UK will have a degree or equivalent. Use these skills as a competitive advantage, but first you’ll need to understand what talent you have.
6. Effective people management frameworks – HR can lead the way on ensuring the business has frameworks in place that support and reward high performance. These can range from simple recognition policies to bonus schemes, through to appraisals and personal development reviews. The list is endless. The key question HR should be asking is whether the policies are supporting or stifling productivity.If you want to know more you contact us at E3i today - email@example.com