Productivity indicators: quantitative and qualitative

Published on 04/04/2024

Productivity indicators: quantitative and qualitative

Published on 04/04/2024
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Productivity indicators: quantitative and qualitative

Some time ago, we talked about productivity indicators and what they consist of exactly. We also explored how to analyze them through business intelligence applied to the company to improve the work performance of employees. We were able to verify the following fact: there are hundreds of productivity indicators, due to a multitude of factors: the type of company, the position held within it, and the tasks performed in those positions. However, it is true that some are common to all companies. Knowing how to apply them to our organization will help us a lot in achieving our business objectives in the desired timeframe.

Let’s look at some examples of the two types of productivity indicators: qualitative and quantitative.

Quantitative productivity indicators

These productivity indicators will always be based on quantities or time. This is what most companies rely on to measure the productivity of the company, a team, or a product. It always relies on a ratio between quantity and time spent. These indicators will allow us to create our own productivity formula, adapted to our company.

For example, we can measure the productivity index of an assembly line by dividing the quantity of pieces produced by the time it took to produce them. This index will tell us how productive we are in terms of quantity, in manufacturing speed.

The same happens in an office, where an administrative worker who has to respond to emails can respond to a certain number of them in a given time and also see how they utilize that time (breaks, distractions, interruptions, etc.).

In the commercial sphere, for example, there is also a quantitative productivity indicator, which can be seen in the number of sales made or the amount of money earned from those sales in a given time.

Qualitative productivity indicators

These productivity indicators are based on the quality of the product or service offered and are closely linked to the efficiency of our productivity, rather than the quantity produced.

Let’s continue with the previous examples and see what happens on that assembly line when we analyze it qualitatively. In this case, we have two parallel lines, the same piece to be manufactured. The number of pieces manufactured in an hour is measured, and of those, it is noted which are good and if there are any defective ones. The ratio of both creates an indicator of productivity regarding the quality of our product.

This is as important as knowing that an assembly line that produces 300 units in an hour, of which 50 are defective, is less productive than one that produces 270 with only 10 defects. Often, more quantity does not mean higher productivity, not only because of the correct pieces but also because the incorrect ones either need to be manually corrected or recycled, both of which incur costs.

If we apply this to administrative work, the truth is that the quantity of emails responded to is not important, but rather the efficiency of their responses, the problems they solve for the company, and the work they save later by addressing problems that have not been resolved via email.

As for salespeople, a similar approach could be applied, considering sales but also the costs generated by those sales. That is, a salesperson who sells a certain quantity of a product but hasn’t calculated the margin correctly or unforeseen expenses arise that they haven’t considered (transport, packaging, special modifications), increases the cost and reduces the said margin, thus reducing the profit, and therefore, the quality of the sale has been low.

The most common error with productivity indicators

Most companies become obsessed with quantities to measure their productivity and forget about qualitative productivity indicators when analyzing the company’s operation. This common mistake makes the difference between companies that have a strong brand and companies with a weaker brand, which may have more capacity to produce and invoice, but whose profits are not as high. There must be a balance between quantity and quality for a company to progress properly and without making so much effort to produce more.

Do you know any other productivity indicators, or do you use different ones in your company? Let us know!

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