A Simple Guide to Measuring Productivity to Fuel Business Growth

Ever struggled to properly measure productivity within your business? You’re not alone.

December 6th, 2016   |    By: Zirtual Team    |    Tags: Management, Productivity, Product/MVP

Ever struggled to properly measure productivity within your business? You’re not alone.

A lot of growth-driven business owners have a hard time pinning down the productivity (and efficiency, for that matter) of their team members and of general operations.

Measuring productivity

As managers, we all care about productivity and the impact it has on the stability and success of our businesses. That’s why we often find ourselves thinking hard about questions like, “What is the monetary value of an employee working at maximum capacity?” and, “What processes are negatively impacting our bottom line because they’re inefficient?”

We all know how to identify productive and unproductive behavior, but the problem is, we don’t all inherently know how to best measure productivity.

There’s really no singular framework that works across all businesses, but to get a better grasp on how to measure and improve productivity across an entire organization, we can start by exploring:

  • Real formulas for quickly calculating productivity
  • How to use these formulas to create benchmarks for monitoring and improving processes
  • Supplemental time tracking and time monitoring tools that aid in boosting productivity

By studying equations that help calculate productivity and by looking at some tools that can help you better track, monitor, and analyze time spent working, you can better understand what’s working well and where improvements need made. This means higher returns on human resources, more effective teams, and a more profitable operation overall.


Why is calculating productivity so tricky?

Well, for one thing: It’s fairly nuanced. Productivity can be influenced by many external and internal factors like world affairs, competition, and shifting internal objectives. But some businesses like to start by looking at productivity from a zoomed out perspective via a simple equation:

Total output / total input = Labor productivity

Total input / total output equals labor productivity

For example: Say your company produced $20,000 of product over the course of 120 working hours with six employees. The productivity outcome of this would be about $167 per hour of work, or about $3333 per employee per week.

Easy, right?

What you’ll need to remember about this calculation is that your input and output qualifiers will vary based on your business. Input is not always hours spent working, nor is output always direct profit. The inputs and outputs of this equation can be anything that goes into the money-making equation (like materials used, products produced, etc.)

With this in mind, you may also want to tie in a unit of service that’s related to the type of work your employee is doing to make this result more contextually accurate. While a manufacturing business might use ‘units made’, a realtor might use ‘homes shown’, for example.

Benchmarks will likely change based on the type of industry, too. If there’s an ideal length for a successful sales call, then this can be factored into the productivity equation. However, if the employee has little influence over their ability to be productive (think of handling customer service calls, for example, which vary dramatically based on the issue), their benchmarks for productivity have to be adjusted accordingly.

Next, let’s look at how quality factors into the productivity equation.


One of the pitfalls of productivity equations like the one we discussed above is that it doesn’t leave room to factor in the quality of work during productive hours.

Think about it: We might have a team member who is being highly productive–but during that time, they could actually be producing low-quality outcomes that are actually hurting the business. Not good news.

So how do we measure efficiency to get a better grasp on the quality of time spent being productive? This equation can help:

Standard labor hours / amount of time spent working x 100 = Efficiency

Standard labor hours / amount of time spent working x 100 equals efficiency

By dividing the current productivity with the standard amount of time needed for a similar quality output and multiplying by 100, we’ll generate a percentage. Ideally, we want a number that is as close to 100% as possible (as this means the team is being highly efficient.)

Let’s look at this in an example. Say you own a strawberry farm and you find that it takes an average of 12 hours to pick 10 gallons of strawberries. If you find that there’s a team member who’s taking 15 hours to pick this same amount, the efficiency for that person would only be 80%. With this data in mind, you can follow up with the employee who’s working a bit slower than the average to see if there’s an issue that needs to be resolved so that higher efficiency can be achieved.

By monitoring efficiency alongside productivity, we can have a much more clear picture of not only the volume of work being done–but it’s quality, too. Both are key to achieve steady business growth.

Now that we know how to effectively measure productivity, let’s look at some apps and tools that can add clarity and documentation to these core processes.


Without proper monitoring and documentation of working hours, productivity can quickly become an elusive metric.

However, time tracking resources offer robust insights into productivity that can not only help spot bottlenecks and project completion delays, but can help team members self-monitor their own productivity more effectively, too.

Wondering where to begin? Start by taking a look at this visual breakdown of time tracking tools:

Visual breakdown of tracking tools

As you can see, time tracking tools vary by function, price point, and platform–and each has a unique set of features and benefits. Let’s evaluate each one in a bit more detail.


This app is one of the most popular for individuals and teams, as it has a simple UI, multiple integrations, in-depth reporting, and easy project overview. For as little as $12/month, you can quickly generate project-based reports and measure productivity for the time invested in each specific undertaking, as seen in the example below.

Harvest dashboard


Time tracking is the core focus of this tool–and one of it’s beloved features is the timer that’s visible within whatever project you’re working on at the time. At $4.95 per month per user, it’s ideal for multi-taskers who are working on multiple projects throughout the day and don’t want to log in and out of specific jobs. At the end of your work day, you can simply assign blocks of time to different projects, which would look like this:

Paymo dashboard


Timecamp, which costs $6 per month per user, focuses on team-based time tracking in a traditional timesheet format, which can be done via timer-based tracking or manual input. This is a handy resource for overseeing multiple team members, as reports make it easy to spot productivity red flags before they become a major issue. Plus, with it’s to-do list feature, you and your time can better prioritize tasks for more efficient workflows.

Timecamp dashboard


ClickTime is a great tool for assigning projects based on team members’ availability, work speed, and specialty for maximum productivity. And with built-in tools that help measure the outcomes of time spent working–you can better delegate based on who does what type of work most efficiently. It’s cost: $10 per month per user. In the example below, you can see how client work is broken down into highly specific categories with detailed notes on each task.

ClickTime dashboard

Aside from these four popular time tracking tools, there are other options to consider as well. The best solution for your business will depend on your unique needs, budget, and user interface preferences, so be sure to explore various options before moving forward. Here are a few other time tracking solutions to consider:

Whichever time tracking solution you choose, know that you and your team members will be reaping some serious productivity benefits, such as:

  1. Increased awareness around wasted time. When time is tracked on a regular basis, it becomes easier for team members to spot processes and/or tasks that are taking more time than they should. From here, you can come up with more efficient models that allow for higher productivity.
  2. Better prioritization. When time is tracked, you’re naturally encouraged to be more mindful of your time–and therefore, you can better prioritize tasks that need completed.
  3. Decreased procrastination. Monitored time helps create focused attention around tasks.

To read more on time tracking tools, check out the TimeDoctor.

To complement your time tracking tools, it’s a good idea to implement project management resources as well. Let’s look at a few different options.


When evaluating tools, think of time tracking tools as the micro perspective and the project management tools as the macro perspective. When we have both in place, we can monitor our business’s productivity from the daily details to the larger objectives. There are many, many different project management tools to consider, so let’s look at some of the popular options in this realm to get started.


With a resource like this one, teams can check project statuses right from the main dashboard, review calendars and deadlines, assign tasks, communicate back and forth, and share attachments from right within the platform. At $8.33 per member per month (billed annually), this is a highly versatile resource that allows each user to customize her or her view for the best possible workflow.

Asana dashboard


Trello uses a no frills note card-style layout for ultra simple project management. Within boards, users can update project statuses, add comments, share project assets, and quickly see where fellow team members are on completing related tasks. Business plans are $9.99 per user per month.

Trello dashboard


With more than 100,000 customers, Basecamp is known for it’s hassle-free project management that keeps information in a single, easy platform. Using this tool, teams can collaborate on projects from anywhere. From document sharing to scheduling deadlines, Basecamp is another great option for simple project oversight at $99 per month (with no per user fees.)

Basecamp dashboard

Aside from these options, there are other project management tools to consider, such as:

Much like the time tracking tools, the right selection for is dependent on a unique set of needs, goals, and team’s preferences. Oh, and budget, too. Explore different options to see which is the best fit.

Maybe at this point you’re wondering: “What do I need to know to help me make the best possible investment in productivity software?” Glad you asked…


The process for selecting your tools shouldn’t happen quickly, as they can have major positive impacts on the business when chosen carefully. Here are a few key points to keep in mind when selecting tools that measure productivity to fuel business growth:

  • Test different tools to find the best fit. It’s hard to know which software is going to be the best fit for your team right off the bat, so don’t be afraid to conduct test runs with a few different tools. Find the one that integrates best with day-to-day operations before settling on a long-term investment.
  • Gather team feedback. The last thing we want is to implement a software or tool that actually hinders productivity because it’s difficult to use or negatively impacts a workflow. Gather team feedback on a regular basis to be sure the new solution is helping rather than hurting productivity.
  • Study outcomes before and after implementation. If you don’t see value or ROI from implementing a time tracking or project management tool within the productivity numbers, you may find that these solutions are not worth the investment. Look at benchmarks before and after implementation to decide whether or not to continue investing in paid platforms.
  • Use the productivity and efficiency equations to generate benchmarks. Once you have these tools in place that can help you better pinpoint standardized time investments for various processes, calculate benchmarks that will help spot bottlenecks–and then leverage your software selection to problem-solve and boost efficiency. If your selected tools are part of the problem, consider switching to a new platform.

With these key points in mind, you can better evaluate the available solutions–and can make a well-informed decision that you and your team members can be happy about.


Once you begin to calculate productivity and efficiency, you can fine-tune the processes that may have been hurting your bottom line.

And with time tracking tools and software that can make workflows happen more smoothly for your team members, you enable business growth that you were never able to achieve in the past. In no time, you’ll spot and correct issues that for a long time had been hurting the productivity of your team.

Start measuring productivity to make your business more effective, your teams more efficient, and to help make day-to-day work happen more seamlessly across the board.

About the Author

Zirtual Team

Zirtual is a virtual assistant service that matches busy people with dedicated assistants.

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