InformationWeek

According to a recent survey by InformationWeek Research of 300 business and IT managers, about two-thirds of executives say their companies measure or track worker productivity. And 80% of those who track productivity say their company's output is at an all-time high.

However, tracking worker output isn't an indicator of above-or below-average productivity gains. And many companies continue to struggle with how to effectively measure worker productivity. Half the businesses that don't measure output complain that it's just too difficult. And for two in five companies, the inability to identify a credible productivity metric is a major deterrent to measurement.

IT and business executives have very different opinions as to why they don't capture worker output. More than half of IT executives find the task too complex to regulate, compared with only one-third of business executives. Not having the resources to track company performance is reported by 44% of IT managers, while only 30% of business managers concur. However, business managers are more inclined than IT managers to blame the rapid pace of technology for not collecting productivity data.

The companies that track worker productivity do so through fairly simple methods: hours per day or week on the job (65%), revenue or sales per employee (62%), customer retention (51%), and customer transactions per hour or day (49%). Less popular, more industry-specific methods include measuring productivity by product cycles (44%), net profit per employee (40%), time from concept to working prototype (37%), and factory output (31%).

Christian Benjamin, CEO of Anthony Christian Consulting, a 50-person IT services firm in Miami, says clients often hire his company to make improvements to business processes, often resulting in better worker productivity. Benjamin says companies have a hard time measuring worker productivity, and his firm helps clients measure it at the start of an engagement, and then later using metrics that his firm provides.

Benjamin says some improvements take place immediately, when the business processes are reengineered. More productivity comes later as clients get comfortable with the technology and find ways of using it to improve other processes. It's those later processes that get an even bigger return on investment because the time to educate users is reduced, and organizational changes already are under way.

Despite the fact that there are standard ways to measure worker productivity, such as the Bureau of Labor Statistics' Tornqvist formula, most companies are self-reliant when it comes to using a formula to calculate worker output. According to the InformationWeek Research survey, only 4% rely solely on a third party to understand performance. Instead, half of the firms surveyed depend on an in-house formula to gauge headway. For 15%, a combination of their own guidelines and those of a third party works best.

Business managers, both departmental and divisional, are most often tapped to track worker output. IT managers are involved, but to a much lesser degree. Seldom does upper management participate in this process. Only 10% of CFOs and 3% of presidents, CEOs, or chairmen are engaged in measuring worker output.