Calculating Productivity in Employees

Many external factors can affect your organization’s productivity -- the national economy, a recession, inflation, competition, etc. Although you can’t control everything, you can control and measure employee performance. Employee productivity has a huge impact on profits, and with a simple equation, you can track productivity per individual, team, or even department.

You can measure employee productivity with the labor productivity equation: total output / total input.

Let’s say your company generated $80,000 worth of goods or services (output) utilizing 1,500 labor hours (input). To calculate your company’s labor productivity, you would divide 80,000 by 1,500, which equals 53. This means that your company generates $53 per hour of work.

You could also look at labor productivity in terms of individual employee contribution. In this case, instead of using hours as the input, you would use number of employees.

Let’s say your company generated $80,000 worth of goods or services in one week with 30 employees. You would divide 80,000 by 30, which equals 2,666 (meaning each employee produced $2,666 for your company per week).