Measuring Employee Productivity, Effectiveness & Performance – Verint Systems

Many consider employee productivity, effectiveness, and performance as interchangeable terms, but there’s more to know. Check out this guide to learn more.

Employee Productivity, Effectiveness and Performance: What’s the Difference?

You might think that employee performance, productivity, and effectiveness are all interchangeable terms; but that isn’t so. Let’s check the old standby – Merriam-Webster’s Dictionary:

productivity: the quality or state of being productive – producing a result
effectiveness: the state of producing a decided, decisive, or desired effect
performance: the execution of an action / something accomplished

And these definitions can change based on the context in which they are used. Creating a common understanding of these terms in your organization can help increase these factors as well as better business outcomes. This is particularly important in back-office operations. Let’s explore why.

What Is Employee Productivity?

Employee productivity refers to the state of being productive, or the amount of time spent in tasks and activities that support business outcomes, such as interacting with a customer or processing an order, vs. attending a meeting, training, special projects, etc.

Productivity levels can depend on lots of factors, including removing distractions to allow employees to focus on productive tasks, improving team collaboration, optimizing processes, or automating manual, mundane tasks.

For example in a contact center setting, implementing a knowledge management solution can be a boon for improving productivity for customer service professionals. Instead of searching for answers or documentation, the knowledge resources are delivered right to the employee desktop in context with the activity type being performed. This can help agents work more independently, minimize obstructions, and keep customer satisfaction high.

Employee Productivity in Back-Office Operations

Back offices are often complex organizations made up of different teams and functions, spread across many sites—making it extremely challenging to create a complete picture of all the work being done. And, it is nearly impossible to understand how employees are spending their time in these groups, not to mention remote employees.

A of 130 HR leaders revealed that 90% of respondents plan to allow employees to work remotely at least part of the time, even after the COVID-19 vaccine is widely adopted. Sixty-five percent of respondents reported that their organization will continue to offer employees flexibility on when they work.

Desktop analytics tools such as Verint® Application Visualizer™ can capture real-time data on application usage directly from the employee desktop. Managers now have an objective, data-driven source of employee activity. To make it easier for managers to use the data, administrators can group applications into predefined categories, such as production-related, non-production, idle, and inactive time.

Armed with this data, managers can compare application usage against scheduled or actual productive work time to identify:

Opportunities to increase productivity and capacity, reducing costs and the need for overtime.
Employees who are struggling and need coaching to improve performance.
Best practices of top performers to share with others.

Yet, even this data source presents only part of the picture. Employees can spend time on work-related activities that don’t involve their desktop. They could be opening mail and scanning documents. In some back offices, they could be making or responding to phone calls. They also have other valid activities that account for their time (including meetings, training, breaks, lunches, etc.). So, how do you get a complete picture?

Back offices need another means of tracking time spent in these off-system activities. Historically, this has been done with manual tick sheets or electronic logs. Unfortunately, this leaves the manager compiling data for each employee and for the team. This activity can consume so much of a manager’s time that they feel more like a glorified reporting analyst than a manager.

An alternative is a digital solution that provides a single system where employees can self-record how they are spending their time—eliminating manual compilation of paper or disparate sources. The self-reported data can be compared to the system reported data to validate activities.

Gartner Survey Finds Ninety Percent of HR Leaders Will Allow Employees To Work Remotely Even After Covid-19 Vaccine is Available, Gartner Press Release, December 14, 2020

Using Activity Data to Boost Employee Productivity

So, how do you transform the captured activity data into insights that can change employee behaviors?

One way is to analyze the data to establish goals for time spent in the various activities. Desktop and off-system activity can be transformed into performance metrics. To make those metrics meaningful and actionable, display the data in performance scorecards that are visible to both employees and managers.

Employees can see current, actual performance against their goals. The scorecards could also show how they are performing against their peers in a similar role. Having this real-time data helps employees self-correct behaviors. They are motivated to focus on the higher value, production-related activities to meet their goals. The Verint Operations Visualizer™ solution for back-office operations brings all these components together.

For your managers, the data becomes a “virtual walk-around.” Instead of walking the floor to see who is doing what, managers can now view a unified team scorecard for both onsite and remote employees. This real-time data helps them identify who needs help, who could take on more work, and who needs to focus more on production-related activities.

Read: Three Ways to Enable Virtual Walk-Around Management

What Is Employee Effectiveness?

Employee effectiveness refers to an employee’s capacity to produce specific, desired goals. Think of it this way. Productivity is time spent in customer support or production activities. Effectiveness is how well you are doing the work while in production. Are you executing the work quickly and accurately? Improving employee effectiveness results in helping to minimize costs, enhance productivity, and increase revenue.

To understand how much an employee can produce and to set realistic goals, you need some data points:

Length of time the employee is scheduled to work/be in production
Types of work to be executed
The volume of work or number of work items by type
The expected handle time for each work type.

In addition, it’s important to understand an employee’s expectations and proficiencies prior to setting their goals. Intricacies for measuring employee effectiveness are not one-size-fits-all.

Addressing problems that can hinder employee effectiveness requires creating actionable plans with a reliable method for tracking progress. Additionally, providing frequent feedback and encouragement shows the importance of celebrating team successes.

Team meeting standing pointing at paperwork

How to Calculate Employee Effectiveness

We recommend calculating employee “earned” hours as a common denominator for assessing employee effectiveness. Earned hours are the number of hours of production work an employee “earns” based on the datapoints mentioned above: scheduled time, type and volume of items processed, and the time standard for those work types. Here’s an example:

Jane is an account services specialist at a business process outsourcer. She works a 9 to 5 shift and is expected to spend 7.5 hours on customer service-related activities. On a typical day, Jane processes:

	# of items processed	Handle time	Earned hours
Work Item A, BPM system1	3	20 minutes	60 minutes
Work Item B, BPM system 1	27	7 minutes	189 minutes
Work Item C, BPM system 2	13	4.5 minutes	58.5 minutes
			307.5 minutes or 5 hours and 7.5 minutes

Jane is one of the team’s top performers. She is always busy and always hits her production goals. However, the company has been overestimating how long it took to process work items. Because she was using two different systems, her boss is unable to create an accurate picture of her availability and processing capacity. We can see above that Jane has the capacity to process five more “A” work items, or 1 hour and 42 minutes of extra production time available.

After implementing Verint Operations Productivity™, the BPO was able to consolidate work from multiple systems and teams. They could also understand the true handle times for each work type, and the amount of work processed by team members.

When they adjusted the handle times, they also adjusted team member production goals. So, in addition to a quota or production goal for the day, Jane also now has an effectiveness rating. To calculate Jane’s effectiveness rating, use this formula:

(Volume Completed x Time Standard) / Scheduled Production Hours = Effectiveness Rating.

Jane’s scheduled for 7.5 hours of production time. She only “earned” 5 hours and 7.5 minutes of production-related activity. So her effectiveness rating is 78 percent.

Jane is still a top performer, but she has adjusted her work habits to execute more work during the day to meet her new goals.

Employee Effectiveness in Back-Office Operations

Measuring employee effectiveness and setting realistic goals is complicated in the back office because of the wide range of tasks to be performed and the number of systems used to execute the work. Each task has its own handle time; and capturing data from each of the systems used can be challenging.

However, the ability to create accurate capacity plans and ensure you have enough resources to execute the work and meet your SLAs is dependent on this data.

In addition, back offices are typically made up of multiple teams and departments with different managers who often have their own ways of tracking performance. When looking holistically across the back office, it is extremely difficult to assess one individual or team against another. We’d like to propose a single approach to measuring employee effectiveness that removes the variables and focuses on individual employee effectiveness.

What Is Employee Performance?

When thinking about employee productivity and effectiveness, you are focusing on the outcomes of the interactions or processing throughput—net items produced. Employee performance takes a more holistic view of the employee’s contributions to the workplace. The framework of employee performance is based on how the individual fulfills their role and their behavior in the workplace. Assessing employee performance includes expectations for how the work gets done. Is the individual courteous and professional? Do they work collaboratively with their peers? Employee performance measures are rooted in efficiency, quality and priorities that uphold company standards—both procedural and cultural.

When thinking about assessing an employee’s performance, your mind most likely jumps to the annual review process that’s tied to compensation and advancement. Organizations typically have a separate system and process for conducting annual performance reviews, vs. the day-to-day management of employee productivity and effectiveness.

Smiling man sitting at a desk with a laptop and mobile phone

Employee Performance in Back-Office Operations

One of the biggest challenges in back-office operations is having real-time data on employee activity to determine if the individual team member and the overall department are going to hit their production and service goals. This challenge gets compounded in large enterprises where there are multiple teams and functions moving a work item along its process to completion.

Back-office operations can benefit from a single platform for efficiently tracking, managing, and improving both individual and organizational performance. The platform supports individual, role-based performance scorecards for measuring KPIs, which roll up to scorecards and dashboards for teams, departments, locations, and across the enterprise.

Through a continuous loop, data-driven process, you can set and communicate goals within the platform across the organization. Now you can regularly measure performance against goals and adjust training and processes as needed—helping them offer better, more focused coaching.

In addition, you can tie the goals of individuals and teams to company goals, helping employees understand how their role supports the company’s. This understanding helps employees feel more connected to the organization and is a driver of employee job satisfaction. Management benefits from standardized employee performance reporting across the organization. The dashboards can quickly highlight opportunities for improvement, and executives have drill-down capabilities to uncover root causes of issues or anomalies.

Metrics from the individual scorecards can be used by managers during the annual review process. Employees are more confident that they are being treated equitably, because they know their peers are being evaluated on the same data sources. And the data-driven metrics help remove any perceived biases or subjective assessments by managers on employee performance, increasing employee trust in their manager’s performance assessments.

A Common Vocabulary Drives Business Outcomes

When everyone in your organization has the same definition for employee productivity, effectiveness and performance, it is easier to measure and manage your workforce against your standards for each.

For example, a mutual life insurer was missing their turnaround goals for customer inquiries. After implementing Verint Application Visualizer, they discovered that back-office employees were only spending 40% of their time in production activities. It seems managers would reward employees with “special projects” that took them away from the processing work. The insurer was able to refocus employees on production and improved their turnaround times by 60%.

A large UK insurer was struggling with very little insight into how employees were spending their time and excessive process complexity and backlog. They implemented Verint Operations Manager and was able to reduce backlogs by 40% and improve effectiveness by 20%.

The shared services group of a global property-casualty insurance, with more than 60,000 employees in over 130 countries, was charged with creating a more robust enterprise-wide performance standard and consistent metrics. After implementing Verint Operations Manager, they were able to capture, measure, and manage employee performance across functions and locations. They were able to lower FTE costs by 26% and reduce idle and admin reporting time by 3%.