Best Ways to Measure Employee Productivity

We can’t manage what we don’t measure, a line often provided as advice for new and seasoned managers alike. The adage certainly applies to current employee productivity challenges faced by small businesses. The productivity of your employees is the underlying success factor of everything you’re working on across all departments in your organization. Disengaged employees lead to poor sales performance, more accidents, increased stress levels, and failed deadlines.

Productive employees

While the common reaction to this may be to have a laser focus on maximizing productivity, this can have some drawbacks. These drawbacks include increased anxiety and in the most extreme of cases high employee turnover. To prevent this negative side of productivity efforts it is important to have a balanced relationship between management practice and the technology deployed to streamline performance. Productivity measurement can be as simple as employee computer monitoring or a basic time tracker. Depending on your business needs the solution you need can be readily available with your current resources.

Below you will find a curated list for small business of the most important benefits of measuring employee productivity. This will be followed by the best techniques you can use to measure the productivity of your employees. Finally you will find some best practice tips for staying within legal limits as you measure employee productivity.

Businesswoman working hard

Benefits of Measuring Productivity

Measuring employee productivity can have amazing benefits and dramatically improve the operations of your business regardless of size. So let’s begin!

Operations & Process Improvement

Have you wondered what technology or structural improvements your employees could use to make their jobs easier? Monitoring productivity provides a wealth of data to analyze that provides intelligent insights into what your employees actually do, as opposed to assuming the process works perfect for them.

An example of this would be if you had a time tracking system in place that recorded time and activity. Then one week as you’re analyzing data you recognize that one specific task seems to take a long longer for employees than it should. After asking them about it, you find that they need new software to perform it better. This is one of several insights that can be gained from only two data points. Imagine what operational inefficiencies could be identified by productivity monitoring.

Distraction Reduction

Lets face it, employees get distracted at work, often by things like cat videos (although at the right dose those can help boosting employee happiness, weirdly enough.) There have been bizarre cases where whole teams were spending a cumulative 80 hours per week on cat videos alone. Thankfully, measuring employee productivity has become far easier in recent years.

As a small business you have more flexibility to implement to the latest technology solutions and management practices. Something as simple as providing constructive feedback paired with insights from employee computer monitoring software can have a positive impact on reducing employee distractions.

Policy Violation

Sometimes productivity losses can be a sign of bad behavior from your employees. By measuring productivity you will also have access to data that indicates if there is a violation of company policy or laws aimed at the workplace. Being proactive and keeping a comfortable workplace for your employees can ensure there is a productive atmosphere.

Below you will find some of the tools and methods available to you for measuring productivity.

Using time management system

Methods & Tools for Productivity Measurement

Below you will find some of the best methods for improving productivity in your business.

Measure Tasks Completed

Often when you hear about employee monitoring as a means to improving productivity it is a measurement of only time and computer activity. These two are no doubt powerful but do not reflect how much the employee is carrying out the mission of your business. Instead of tracking time tied to a computer, track the tasks completed by them.

You may find that some of your employees vary drastically in how much time it takes them to complete the same task. By tracking tasks in addition to time it helps to generate a collective feeling of accomplishment and motivation to keep things moving forward.

Passive Time Tracking

The last thing you want is more paperwork for you employees, so having them fill out a timesheet every week can be a daunting task. Additionally, analog time tracking does not provide the data you need to improve productivity. Fortunately, technology today allows for passive time tracking. For your employee this is simply the click of a button that starts a timer while they’re working. However, for you this is so much more, passive time tracking can provide data, in the form of background screenshots, application usage, idle time vs active time, and customized indicators.

Together passive time tracking paired with task measurement, you can have comprehensive data for productivity analysis. Passive time tracking is a win-win solution for you and your employees.

Support Your Staff

While it is reasonable to expect your employees to be self-directed and know exactly what they’re doing. This may be true, but it is not the only aspect of productivity.

Employees engage with work processes with the information they have available to them. In today’s world this is often the result of information shortages or information overload. You can help your staff by defining operational definitions of the work they need to do. This helps employees to know how business functions and concepts apply to your specific context. Another method you can use is to have managers curate information for their subordinates to work off of or start from. This allows employees to jump right into work with a strong understanding of what needs to be done and where they can get the information to do it well.

Employee monitoring

Best Compliance Practices

By now you’re likely strongly considering measuring employee productivity, however it is also important to understand compliance in your region or country. In the United States employee monitoring and productivity measurement is a gray area.

An example commonly used is where an employer can monitor activity; It is ok to monitor activity in areas and spaces where employees work, however it is not legal to monitor employees in personal spaces such as the restroom or the cafeteria.

Compartmentalize Measurement

Legal experts generally recommend that an employer communicate any monitoring activity to their employees so that there is transparency and shared understanding. Below you will find some general recommendations to stay in compliance and avoid lawsuits.

Avoid Specific Group Targeting

There can be serious legal and financial consequences if a protected group or individual is singled out for monitoring. When measuring productivity of employees, it is best to take an all or nothing approach. Keep in mind your reason for monitoring or measurement, you want to improve productivity overall, which means that your focus should be the organization as a whole.

Get Legal Advice

You may have a specific reason outside of improving productivity or perhaps you’re worried that your measurement efforts will appear selective. Whatever the case, it is best to get legal advice on how you should go about monitoring your employees. This can save you from potential legal issues in the future.

Business meeting


Measuring employee productivity can have tremendous benefits for you and your organization. From process improvements to catching policy violations, measuring productivity generally provides business improvements very quickly. Methods to get you started very quickly include tracking tasks, tracking time, and supporting the needs of your employees.

With the amount of data generated you will be able to boost morale and keep tabs on where productivity is failing in your organization.