As Saas business builders, we’re all pushed for time and looking to squeeze the most out of every day. When our teams grow, it’s natural that we look for systems that can track and improve, employee productivity as well. But how do we choose the best tool for measuring employee productivity? And which is the best approach anyway?
When businesses were making widgets, it was much easier to measure employee productivity. Managers could easily count and compare how many widgets each team member made each day. But for most of us, the types of work we engage in make productivity measurement much more difficult.
Objectives for employee productivity measurement software
Before delving into which type of software can best help you measure employee productivity, let’s first consider what our objectives might be for choosing an appropriate tool. Without first knowing our objectives, it’s impossible to evaluate the different options available.
In an ideal world, we would want;
- An employee productivity tool to inform decisions
Your employee productivity tracking should guide you to make decisions, uncover issues, or in some way help you manage and improve the business. Information for its own sake is just wasting everyone’s time.
- A productivity tool that is based on accurate and measurable data
A tool based on hard numbers takes the subjectivity out of productivity. After all, actual, unquestionable results are the real way to measure productivity.
- A team productivity tool that motivates employees and improves performance
As productivity is most often a direct function of individuals’ morale, it makes sense to focus on tools that actually encourage and reward productivity.
Which outcome is most important for your productivity software?
If you’ve been paying attention, you’ve probably realized that these three objectives are hard to hit simultaneously! The tool that is the most accurate is unlikely to motivate. And the tool that provides the most employee motivation is less likely to inform management decisions.
Of course, this means that we need to decide which of these factors is most important to our business at this point in time.
Choosing your objective for your productivity software will depend on things like;
- The type of work your employees perform – if your team is manufacturing widgets or doing something repetitive, your choice will be very different from a business unit that performs research or highly creative tasks
- The level of employees – working with a junior workforce can sometimes require tighter controls than when you work with more experienced employees
- The type of culture you have (or aim to create) – the productivity tool/s you select will have an impact on your business culture
- Your stage of business – a startup business that is still finding its feet and developing processes will usually have very different productivity tracking needs from an established business that is primarily optimizing existing processes
Types of employee productivity measurement tools
Once you’ve got some clarity about the primary objectives for your productivity software, you can set about exploring the various types available.
The primary categories to consider include;
- Project management tools
- Time tracking tools
- Team productivity & collaboration tools
- Results dashboard tools
- Specific reporting tools
There are some software applications that cross between these groupings, but in general, their strengths tend to lie in one area only.
Project management tools
Project management tools have evolved greatly since the old waterfall, Gantt charts that might immediately come to mind. These days, the best project management tools are based on Agile methodologies and also include some collaboration features. Their intention is to help employees manage their work and get things done.
Pros: These types of tools are great for businesses that work on projects, and already have defined processes for the way things should be done.
Cons: They can over-complicate simple tasks and are not as useful for less predictable types of work. They can also add to your team’s workload as many of them require tasks to be entered with a lot of detail and employees can spend more time fiddling with them than getting work done.
Time tracking tools
Since the rise of remote work and distributed teams, time tracking tools have risen in popularity. Essentially they either ask employees to report on how they’ve spent/are spending their time, or they collect this information automatically by tracking activity on the employee’s computer.
Pros: They are generally based on hard data and allow managers to keep a close eye on exactly what their team members are doing. Can be good for contractors or where management resources are stretched thin.
Cons: These types of tools are generally terrible for morale. They send a message to employees that they can’t be trusted and are effectively just an hourly resource.
Team productivity & collaboration tools
Team productivity and team collaboration tools are ones that help team members plan their work and share their work with colleagues. (Chatting apps are also an important part of most teams’ toolkit, but that’s not what we’re talking about here.) Team productivity tools are generally not based on complex project structures, but instead are more concerned with the impact they have on team members. Some also include social features like rewards and recognition for getting things done.
Pros: These types of tools can unite teams that are not physically together and/or are not working on the same types of things. They use peer accountability to encourage high performance in teams, but they are also flexible enough to include all types of work. They help individuals get clarity about their work and focus on getting the important things done.
Cons: These tools are not based on hard data, but instead rely on employee inputs.
Results dashboard tools
Dashboards give real-time visibility to the key metrics for the business. They are generally third-party applications that integrate with the key software used by the business (eg the accounting system, sales system, web analytics, etc.)
Pros: Knowing the real numbers of a business or team can help managers to spot trends and make better decisions. These kinds of tools are great when the team is relatively small and each team member knows exactly how they contribute to the results.
Cons: Once teams become bigger, employees can disengage from aggregated metrics and feel they have little relevance. Dashboards are usually also based only on outputs – which are sometimes quite disconnected from the employee’s actual inputs. For example, a development team could release fantastic new features which are entirely bug-free, but yet that are unlikely to show up on a dashboard as new sales or better user retention for many months.
Examples of dashboard tools include; Zoho, Tableau, and Sisense.
Specific reporting tools
Depending on the type of work your teams perform, there are all kinds of industry and function-specific tools that can help track and report on outcomes. This could be reports generated from your phone systems to show calls made and call times for each operator, it could be sales activity reporting, support ticket reporting, development reporting, or even employee sentiment reporting.
Pros: These types of tools can provide specific and granular data that can help managers develop team members. They are based on real data and often include leading indicators (which can be more useful than lagging indicators).
Cons: As these tools usually have a narrow and data-driven focus, they can miss some of the more qualitative elements of productivity. For example, one employee could be closing more support tickets than anyone else but might be destroying goodwill. A developer could be pushing lots of commits but that doesn’t say anything about the quality of their work.
As there are so many different applications, we won’t provide examples for this category.
Productivity for Saas businesses
Not all, but many Saas businesses are in the relatively early stages of business life cycles. They run on lean teams comprised of highly intelligent, information workers. And many of them run remote teams. It’s also a highly competitive space, where innovation is the most valuable resource. Teams are relatively small and employees’ work consists of a wide range of diverse activities.
For these reasons, productivity tools that help keep team members on the same page and keep morale high, are generally the best options. Most of us know intuitively that positive work cultures are more productive, so tools that actually impact employee motivation are most likely to have the greatest impact on productivity.
Choosing your approach to business productivity
You can see from this discussion that there are many different approaches to productivity – each with its own advantages and disadvantages. It’s may also suit you to use several tools together for different purposes. It’s also clear that there’s no, perfect employee productivity tool either. The key is just to choose one that meets your most important needs, and then stick to it.
When you first adopt a new tool, it’s easy to see what it doesn’t do and it can be hard to change your working habits to properly incorporate the tool. But don’t be tempted to keep switching and changing! Focus on staying with the tool that you choose and truly integrating it into your day-to-day working life. This is where the magic happens and you’ll start to see the impact of your productivity tool in action.