How much is the individual worth?

Paulette Dunn-Smith, Contributor

THE NATION'S workforce education and training system is essential to Jamaica's collective prosperity. Over the last few months, among other things, we have looked at ways in which the workforce can be improved through on-the-job training, competency-based training, lifelong learning, innovation, and through giving exceptional customer service.

For big companies, productivity is measured using a variety of methods along with the help of mathematical formulas. This allows them to have a big picture of how their company is doing. This week, in response to a number of readers, we look at a simple method to measure individual productivity. This method should be particularly useful for small businesses since what is not measured cannot be improved upon.

Why do we need to measure workforce productivity?

When employees cannot perform their work against established standards, performance can suffer. Effective training can increase performance by improving the skills that directly affect the quality of output. A skilled operator, for example, knows how to measure the work that has been done, understands the impact of variation and inconsistencies in products, and knows to stop production to take corrective measures when the quality falls below the acceptable standard.

Accurately measuring the outputs of the workforce can pinpoint performance-improvement opportunities down to the individual level.

In any business, it is very important for management to measure inputs and outputs so as to determine whether it is feasible or pro-fitable to remain in business. Research has shown, however, that there are many aspects of business which many managers fail to measure. For example, a recent survey showed the following:

Only one in five enterprises measure their return on investment of their marketing and sales dollars;

Fifty per cent of enterprises do not use budgets or forecasts to help manage their business;

Thirty-two per cent of enterprises do not have specific measurements in place to monitor performance on a daily or weekly basis;

Only 11 per cent of enterprises regularly monitor non-financial indicators such as customer retention or employee turnover to further evaluate business performance;

Sixty per cent indicate employee productivity is critically important, but less than 12 per cent have mea-surements and programmes in place to manage the business;

More than 80 per cent of small businesses outsource some component of their business from information technology to payroll and tax accounting to save time, reduce costs, and improve performance.

situation to situation

Very few firms measure producti-vity itself, even though productivity is one of the main factors which define the success of the business. From previous articles, we know that workforce productivity is the amount of goods and services that a worker produces in a given amount of time. Put another way, productivity is the rate of output for every input, in this case time.

The units of output may differ from situation to situation, but time is always a constant. No matter what the output is (sheets, song lyrics, reports, chairs, cakes, carvings, etc), time will continue to remain the constant factor when it comes to productivity. The more output is produced for a constant period of time, the more productive something is.

Productivity can be measured for an individual, for an enterprise, for a process, for an industry, and of course, for a country. Managers, therefore, commit a serious mistake when they do not measure productivity. The following steps can be used to determine your productivity level.

Step 1: Determine what units you want to measure. It is useful to know what you are working with. If, for example you are wondering how productive you are in making sheets, your units may be the number of finished sheets per hour. Another set of units for the same example may be the number of sheets made in an uninterrupted four-hour period. No matter what units you have, you can use the following examples as your guide to create your own units, or what is often called metrics.


Step 2: This step calls for you to observe and take notes. All that is required is for you to observe what your output is and to write it down. The data that you gather in this step will be the determining factor to measure your productivity level.


Step 3: This calls for computation. To start, take the number of outputs that you have written down. Assume that you wanted to determine how many sheets you are able to finish in an uninterrupted four-hour period. Let us say that the output is 40 sheets in a period of four hours. What you need to do now is to divide the output, which is 10, by the time it took you to finish it, which in this case is an uninterrupted four hours, and then we can determine that your productivity level is 10 sheets per hour.

The units mentioned above may be replaced by any type of unit that you choose. Only the units should change while the process of measuring productivity remains the same. The results for productivity measurement may now be used to maintain or to improve your productivity level and in turn, your performance as a whole.

Paulette Dunn-Smith is the executive director of Dunn, Pierre, Barnett and Associates Ltd and Chairman, Caribbean Career and Professional Development Institute. She can be contacted at pdunn@dpbglobal.com, or www.dpbglobal.com.