Performance Management

Employee Productivity Improvement: Managing Business Performance

Introduction: This article addresses one of the major concerns of a CEO: ‘How to improve employee productivity?’ It is to be read in continuation with my previous article on ‘Organizational Climate: Managing Business Performance’. The approach below is based on experience and suggests the launch of corporate initiatives based on employee feedback. It also proposes continuation of this exercise for a period of 3 – 4 years, since all the factors responsible for low employee productivity may be difficult to address in one go. For ease of implementation, we shall look at this problem in 5 phases.

Phase 1: Problem Diagnostics through employee participation

Methodology: Ask these Questions from each employee as a part of the Performance Appraisal Process. Inform the employee that feedback on this Form shall not be routed through the manager. After collation & analysis of the feedback collected through this Form, the statistics shall be shared direct with the management. Purpose is to enable the management to launch initiatives to improve the organizational climate. To initiate the Appraisal process, this Form has to be been signed off by the employee. This will ensure 100% employee participation in this strategic survey.

Question1: Which 3 factors are responsible for my low productivity? In the column RANK, enter 1 for a FACTOR which is 50% or more responsible; 2 for the factor which is 30 to 50% responsible and 3 for the factor which is less than 30% responsible for your low productivity.

Note: RANK column is to be left blank for the remaining four factors not applicable to you.

SRL NO.FACTOR (responsible for my low productivity)RANK
1My job skills are inadequate and require upgrading. 
2My Goals/ KRAs have not been clearly defined. 
3My manager is professionally incompetent and unable to guide me properly. 
4Business objectives of the organization are not clear to me. 
5My personal/ family problems distract my attention from the work. 
6Tools/ facilities provided at my work station are outdated. (specify in the last column the tools/ facilities that need review). 
7I have seldom received appreciation for any of my achievements. 

Question 2: For the factors ranked 1, 2 & 3 above, suggest three specific actions each which the management may take to help in enhancing your productivity.


Question 3: What, in your opinion, should be the corporate planning focus during the next two years? Rank the following ACTIVITIES as 1 to 6. Rank 1 means ‘highest priority’ and Rank 6 means ‘lowest priority’.

Note: No two activities can have the same rank.

Clearly define the Goals to be achieved by each department. 
Review the skill requirements for all job positions in the company. 
Identify low performers and steps needed to boost their performance 
Focus on marketing & sales for revenue growth. 
Launch self-learning initiatives for employees in different departments & track employee participation. 
Introduce performance linked incentives in the company 

Phase 2: Use Goals Setting & Tracking software to enhance accountability of each employee and increase interaction with the manager:

  1. Manager & employee to set SMART goals. Software should enable recording-
    (i) Goal statement(ii) Current status of goal in terms of targets previously achieved(iii) Expected targets to be achieved in a specific time frame(iv) Tracking achievement at 3 to 4 intermediate points(v) Record mentoring notes of the manager at each point (may be as a video/ audio clip) and


    (vi) Final achievement.

  2. Manager is able to trigger a mail asking the employee to enter current status of achievement for any goal at any time, as a special feature of ‘tracking’.
  3. The software should be able to provide to the management-(i) Information about the number of employee – manager interactions in each quarter(ii) Goals for which the progress is slow(iii) Goals which have been over-achieved etc…. This would enable each Functional/ Department Head to know the real story & intervene before it is too late.
  4. The above steps will help in effectively managing the productivity enhancement initiative for each employee.

Phase 3: Use 360-degree feedback mechanism to evaluate managers/ supervisors at all levels (including the top Leadership).

This phase will be undertaken in the next appraisal cycle if Factor 3 in Phase 1 (My manager is professionally incompetent and unable to guide me properly) carries Rank 1/ 2/ 3 in the analysis of employee’s feedback. Purpose is as under:

  1. Identify ineffective managers & decide their transfer/ development/ separation from the company.
  2. Collect development needs for each manager & plan training for those skills/ competencies which are deficient in most of the cases.
  3. Launch ‘Self Development Programs for Managers’ & track their participation. (Check if Q 3 of Phase 1 supports this activity)

Training Management System of the PMS software should enable tracking of employee participation in the ‘self-development programs’ and in organized training initiatives launched by the management.

Phase 4:

The software should also help, through analysis of employee performance over longer periods, to identify non-performers, for whom exit options could be planned by the management. Managing the performance-based incentives to retain high performers is another area to be addressed as a part of employee productivity enhancement drive in an organization.

Phase 5:

Repeating Phase 1, by introducing a new Questionnaire every year, provides the management with a tool to decide new initiatives, in consultation with employees, to keep focus on employee productivity improvement.

In the next article in this series on ‘Managing Business Performance’, our focus will be on Leadership Development to improve the organizational climate.