6 Actionable Tips on How to Improve (and Calculate) Workplace Efficiency

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6 Actionable Tips on How to Improve (and Calculate) Workplace Efficiency

Every HR manager wants to create a positive and efficient workplace, but sometimes their efforts are hampered by outdated technologies, inefficient workflows, and unproductive employees.

Workplace efficiency is essential for any organization to be successful, and measuring employees’ productivity and finding ways to improve it helps ensure the company is working at its full potential. This article will share what all efficient workplaces have in common and discuss how HR managers can effectively measure and improve productivity and efficiency.

What is workplace efficiency? 
What does an efficient workplace look like?
How HR managers can measure efficiency in the workplace
Top 6 tips for improving workplace efficiency

What is workplace efficiency? 

Efficiency is sometimes confused with productivity. While they are both necessary, productivity is essential to an efficient workplace. An efficient workplace is one where employees complete the right tasks correctly without wasting time and effort. 

Efficient employees work productively, organizing their activities to complete them on time. But efficiency is determined by factors such as work environment, training, culture, and leadership style. 

  • Productivity is about how much work is completed. A productivity rate indicates how much work employees achieve in a set time. It asks, “How many packages did we ship?” 
  • Efficiency is about working optimally. When you measure efficiency, you look at other factors besides the total number of completed tasks, such as the quality and how the products comply with specifications. Efficiency asks, “Are we using our time and resources to ship the most packages possible?” 

Why is it important to measure workplace efficiency? 

Maximizing efficiency is one of the most common challenges in the workplace. Distractions abound, regardless of whether people work from home or in the office. Here are some reasons measuring efficiency and productivity is essential for business performance: 

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  • Assessing the efficiency of employees allows managers to understand how workers’ performance impacts the entire company’s performance. 
  • When HR managers understand the staff’s efficiency, they can make informed decisions about whether they need to hire new talent or lay people off. 
  • Measuring efficiency reveals areas where incentives or training are needed. 
  • Evaluating the staff’s performance may help balance expectations and capabilities. 

Measuring productivity 

While they are different concepts, productivity and efficiency are intertwined. Most organizations measure productivity to have a starter idea about performance and efficiency. Here are some surprising statistics on productivity

Influence of employee productivity on company revenue: 

  • Productive companies have 30–50% higher operating margins than lower-performing companies. 
  • Top companies are up to 40% more productive than others. 

Self-reported employee productivity statistics:

  • 66% of employees believe they will be more productive working from home
  • 46% of employees surveyed feel that digital tools make them more productive 

What does an efficient workplace look like?

An efficient workplace is a working environment that encourages productivity, enhances job satisfaction, and minimizes errors and delays. A positive and supportive work culture can encourage employees to perform at their best, promoting safety, growth, and goal attainment. Here are three characteristics of a positive, efficient workplace: 

  • Encourages positive time management and work-life balance
  • Fosters collaboration and empowers employees to learn how to work together more efficiently. 
  • Is proactive in measuring and managing performance. Regular evaluation and communication can help resolve issues before they become critical. 

Prioritizing work and adopting a focused approach is another crucial component of an efficient workplace, as are identifying and completing the most critical and urgent tasks while maintaining high-quality work. Additionally, clear expectations, training, and support can enhance employee performance and ensure they understand the expectations for their role.

How HR managers can measure efficiency in the workplace

A productivity ratio is a score that can be used to quantify both tangible and intangible factors like completed tasks, the effects of training, hourly revenue, and efficiency. It’s the measure of goods and services produced (the output) compared to the time or effort spent on that task (the input).

1. Calculating the productivity ratio

The first step in calculating the productivity ratio is to identify your input, such as employee hours or training time. Next, determine the output: revenue, new clients, units produced. 

Output / Input = Productivity

Example: An employee packs 40 orders in a day. The typical shift is eight hours, so according to the productivity ratio formula: 

40 orders accomplished / 8 hours = 5 orders per hour

But is this employee working efficiently? On investigation, we discover that two hours are spent on tasks unrelated to direct output. 

2. Calculating the efficiency score

Here’s how to calculate efficiency.

Scheduled shift – non-productive hours = efficiency. 

8 hour shift – 2 unproductive hours  = 6 hours (75% efficient) 

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The efficiency ratio factors the productivity during the actual productive hours. Therefore, maximum efficiency would mean the employee is filling 50 orders per day.

Steps to track employee efficiency

To maximize efficiency in your workplace, follow these steps:

  1.  Set a baseline standard: The first step is establishing the standard to measure productivity and efficiency. Set target goals for different pursuits, for example, how long it takes to complete each task, how many revisions you will accept for each project, the employee absenteeism rate, and so on.
  1. Track employee time and results: In this time of more flexible work, it can be difficult to measure productivity if you only think about time on the clock. While tracking time is vital for hourly employees, you should also track results. Consider a flexible time framework when measuring productivity. 
  1. Measure the quality of work: While base productivity can be measured easily with a formula, measuring quality is more complicated. There are metrics, however, that can help get some insights. For example, how many products pass quality tests, the level of employee engagement, and client satisfaction rates. 
  1. Calculate the efficiency ratio: Determine which employees produce the highest value in the least amount of time. Monitor performance indicators using the formulas above.
6 HR Tips for Improving Workplace Efficiency

Top 6 tips for improving workplace efficiency

Tip 1: Match the tasks to the employee skills and capabilities

Knowing the employees’ skills and traits is essential to assign the right roles to them. For instance, an introverted employee may not be the best fit to lead a large team or to be the company’s public speaker. 

Conduct a skills gap analysis to assess and understand which skills are lacking and need to be further developed. A skills gap analysis is also highly beneficial in identifying upskilling or reskilling needs.

Tip 2: Simplify communication and processes

Communication is essential for completing tasks, responsibilities, and shared work. There are multiple ways to communicate in the workplace, like phone calls, text messages, emails, messaging apps, and even social media. Communication should be accurate, timely, and reliable to be effective. 

Ensure the expectations are clear to staff and they understand their role in achieving the organization’s goals. Set SMART goals — Specific, Measurable, Attainable, Realistic, and Timely — and ensure each meets those requirements. 

Finally, don’t overwhelm your employees with tasks.  

Tip 3: Invest in training

Initial training is necessary, but continued employee development is essential for efficiency. Training helps employees feel confident in their jobs and improves their performance and efficiency. Continued training also helps employees to expand their skill set and grow within your company. 

You can provide training in several ways: individual mentoring, job shadowing, professional workshops, courses, and seminars. You can also reimburse employees for career advancement courses. 

Tip 4: Embrace remote and hybrid work

Remote and hybrid work are here to stay. While there may be concerns about the productivity of working remotely, in reality, employees feel more productive working from home. 

There are cases where the work cannot be done entirely remotely. However, these days, employees prefer having workspace flexibility, at least in a hybrid framework. These work models benefit employees with children or those caring for older family members. Supporting hybrid and remote work can also help your organization maintain business continuity. 

Tip 5: Encourage feedback

Performance reviews are part of every employee’s life. That is why it’s so important to measure efficiency accurately. Understand that employees’ efficiency is affected by many factors and that some responsibility falls onto the manager.

Consider what the employee can improve and what the manager can do to help them where they fall short. Asking for feedback supports open dialogue and helps fix issues before they escalate. 

Tip 6: Provide incentives

Recognizing a job well done boosts employee morale and engagement, improving productivity. Incentivize productivity by giving rewards that are meaningful to the recipient. While some employees may prefer public recognition or additional paid time off, others may appreciate a voucher for a restaurant or other monetary bonuses.

To conclude

Workplace efficiency is critical to a company’s success and can significantly improve its bottom line. When businesses focus on maximizing their employees’ productivity, they can achieve stress-free workdays, better results, and improved profit margins.

Ensuring every employee is engaged and committed to working efficiently is the key to improving a company’s bottom line. In conclusion, focusing on workplace efficiency can lead to cost savings, better results, and improved business profits.

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