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Wednesday, January 10, 2020

It's Time to Think Again About Productivity

The simplistic formula for calculating productivity, based on hours worked and costs incurred, is no longer sufficient for today’s environment. Following it seems to be as likely to harm a business as help it. It’s time for something better.
How far are the long hours that many people now work increasing productivity?

This seems a simple question. If you work longer, surely you will accomplish more? And if you work longer for the same pay, the cost of what you do will be lowered. More output with lower costs equals higher productivity. Q.E.D.

Well, maybe.

It seems that British workers currently put in around one full working day of overtime each week [via].
Unpaid overtime often increases only gradually, with employees . . . failing to realise how much extra time they are working, and the negative effect this is having, until it is too late.
A US survey found that employees working overtime were 61 per cent more likely to sustain a work-related injury or illness than employees who did not [via]. Research published in the journal Occupational and Environmental Medicine in 2002, showed that working over 60 hours a week and missing out on sleep can double the chances of a heart attack for the 40+ age group.

Once again, it seems that short-term benefits can be quickly wiped out by long-term results.
The impact of such outcomes must decrease productivity and raise costs by the amount of cash that has to be devoted to covering lost working hours, paying for health benefits, and hiring replacement workers. Once again, it seems that short-term benefits can be quickly wiped out by long-term results.

Recently, a survey by Microsoft suggests that some of these extra working hours are being wasted anyway [via]. Here are the key findings:
  • Surfing the web during work time consumes almost an hour a day (54 minutes).
  • Formatting documents and sorting out PC problems consume a further 46 minutes (Couldn’t Microsoft do something about that?).
  • Another hour or more is spent gossiping with co-workers, making calls to friends, drinking tea or coffee, taking toilet breaks, and daydreaming.
So will working longer hours automatically raise productivity?

… almost six out of ten (58 per cent) Americans identified poor management as the biggest obstacle to productivity. Long hours won’t help with that.
The 2005 Workplace Productivity Survey conducted by the Society for Human Resource Management (SHRM) found that almost six out of ten (58 per cent) Americans identified poor management as the biggest obstacle to productivity. Long hours won’t help with that.

A 2004 UK survey [via] found that slow decision-making and unproductive meetings were the biggest wasters of company time, losing companies 36 million days of management time annually.

Is output per working day truly a sound measure of productivity, save in the old-fashioned way that applied to people shoveling coal?

Suppose you have tired, fractious people dealing with customer queries or complaints. How much can be lost in profit terms by making customers angry? If a customer has to wait for 30 minutes or more on the telephone, before being confronted with a lengthy menu of computer-speak “options,” what is the cost impact of his or her irritation? If more quality problems emerge because workers are tired and stressed; if morale falls and more good people leave; if creativity (which takes time and relaxation) is replaced by mindless conformity, what is the cost to the company?

One of the refrains of Hamburger Management is “what is measured gets done.” This is too simplistic to be sensible, since the most crucial aspects of business success are, generally speaking, difficult or impossible to measure accurately.

The current drive for high productivity can harm a business as easily as improve it, if it is not done carefully and with proper insight into the context.
You cannot properly measure innovation, creativity, or human happiness. Even supposed measures of the willingness of your customers to stay loyal, or your product’s marketability, are suspect. Many contain loaded questions or are poorly analyzed. Nor can you relate a rise or fall in such criteria to simple actions. Life is far too complex for that. Customers may be loyal only because there is no viable alternative to your product or service. Give them one and they will desert you in droves immediately.

The current drive for high productivity can harm a business as easily as improve it, if it is not done carefully and with proper insight into the context. People like Bob Sutton and Jeffrey Pfeffer have shown clearly that many management assumptions are based on zero actual evidence.

Why should old models of productivity, derived from the factories of 100 years ago, work today? Why treat knowledge workers like unskilled day-laborers? Do we want to live in a world where work is the equivalent of being a galley slave and human beings are retained only so long as there is no machine to replace them?

It’s time to rethink what we mean by productivity and bring a wider definition into use: one that includes the intangibles of working life, not simply money and time.


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