Employee Productivity Rate - What is it and How to Calculate it?

The employee productivity rate, often referred to as EPR, is, unsurprisingly, an HR metric used to assess the level of productivity of an organization’s workforce over a given time period. This, amongst other employee performance metrics, are key to tracking and managing how well employees are performing their jobs. Employee productivity rates are key indicators of other important factors like employee satisfaction, engagement, and absenteeism rates

Understanding the productivity of employees is vital to optimize business performance and ensure that you’ve created an inclusive workplace. Productivity rates are inextricably linked to workforce satisfaction and engagement. Even in isolation, employee productivity rates can highlight the need for a strategic overhaul. 


How to calculate employee productivity rate?

One of the most common ways to measure employee productivity rates is to divide your company’s total revenue by the number of employees in a given time period. Though this calculation may seem overly simplistic, it can be a great starting point that can later be improved by accounting for things like production rates, satisfaction measures, and overall efficiency. 

Employee Productivity Rate Formula (1)

It’s important to define employee productivity in relation to job positions. Key indicators are sometimes straightforward (for example in sales, you would generally look at the final sales figures produced by an employee versus their targets). Even when they aren’t, however, keeping a constant eye on employee productivity rates means that you can determine your own averages for all employees and create a standard to motivate your team. Tracking and monitoring can be done in virtually any industry or company. 


More on the employee productivity rate

Employee productivity rates are useful in helping organizations optimize the effectiveness of their workforce. Frequent analysis of the figures can help leaders understand changes in productivity, where to focus attention, and more. Strong HR leaders use EPR, amongst other things, to ensure the recognition and compensation of top performers, as well as to manage and correct poor performance across the business. 

There are many things teams can do to increase employee productivity. Some of them include:

  1. Encourage learning by providing things like access to continuing education and employee development programs 
  2. Improve technology. Employees who don't have the right tools to do their job are more frustrated and less productive. Provide employees with the tools and technologies they need to succeed! 
  3. Focus on culture. Clarifying and improving things like work environment, mission, ethics, and goals is a surefire way to increase productivity.
  4. Align goals with performance. If employees are empowered to attain realistic goals, they are proven to be more self-motivated and confident
  5. Improve communication. Open communication, from C-levels down, is vital for productivity. When employees feel directly connected to their co-workers, whether managers or otherwise, they are more likely to be productive. 

Decreases in employee productivity rates can often indicate workforce fatigue, poor management, or any combination of things. 

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