Everyone has heard the term productivity, and people talk about it in terms of how high it is and how to improve it. But fewer know how to measure productivity, or even what exactly we are talking about when using the term “productivity.”
In its simplest form, the productivity formula looks like this: Output ÷ Input = Productivity.
For example, you have two salespeople each making 10 calls to customers per week. The first one averages 2 sales per week and the second one averages 3 sales per week. By plugging in the numbers we get the following productivity levels for each sales person.
For salesperson one, the output is 2 sales and the input is 10 sales: 2 ÷ 10 = .2 or 20% productivity. For salesperson two, the output is 3 sales and the input is 10 sales: 3 ÷ 10 = .3 or 30% productivity.
Knowing how to measure and interpret productivity is an invaluable asset for any manager…