Key Steps on Improving Employee Productivity within Your Business for Better Profits

Editor's Note: Take a look at our featured best practice, HR Strategy: Job Leveling (26-slide PowerPoint presentation). Job Leveling is a disciplined approach to gauge the value of work for individual positions across the organization. It entails ascertaining the nature of work done by each position, authority levels, and the effect of each job on business results. Jobs that are configured inadequately bread [read more]

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The key to unlocking profits from your business is employee productivity. While many look to increased production or sales, this can unfortunately lead to a business with substantial cash flow but very little profit, or even substantial losses. For evidence of this, look no further than some of the world’s largest companies, which regularly have sales in the billions or tens of billions of dollars, yet still find ways to lose money.

To increase employee productivity, you as an owner or manager must first look to yourself to make sure that you are providing employees with the right tools and motivation to achieve success for themselves, and your business. To set your company on the track to better productivity and profits, make sure you to take the following steps:

1. Give employees the best tools available. There is no quicker way to boost employee productivity than to first ensure your people have the right tools to do their jobs. If your company requires special equipment, make sure that your employees have what they need. This does not mean that you are always paying top-dollar for the most expensive equipment on the market, but make sure that your employees have tools that are reliable and fit the specific requirements of their jobs. If your business employs salespeople, this step also means making sure that they have good leads, strong scripts, and the information that they need to sell a client at their fingertips.

2. Train. Every manager likes to believe that their employees learn by doing, but most coaches agree that practice does not make perfect, and instead practicing perfectly makes perfect. In other words, make sure that your employees are being trained in the right processes to avoid mistakes and increase efficiency. While you need to be open to new ideas (especially from employees) about ways to improve your procedures, but stay current on best practices and make sure your staff gets good training to help them work efficiently.

3. Reward employees for achieving objectives. The first part of this step involves goal-setting by you, the manager, working together with your employees. Goals need to be set strategically: they need to be specific, measurable, and trackable. For example, one goal may not just be to close more sales, but to close a certain number of high-margin sales within a period of time. This gives your employees concrete goals to work towards and the ability to track their progress. It also gives you the ability to provide them with the proper rewards for achieving their objective, and to adjust goals and incentives as necessary.

4. Do not punish employees who fail to reach goals. Psychologically, punishment serves as a disincentive. Disincentives are largely ineffective – nearly as ineffective as rewards are effective. To avoid breeding resentment among employees who fall short of a goal, avoid punishments except in cases of actual misconduct. Instead, give employees the opportunity to improve. For those who do not improve, over time you can cut dead weight to keep them from dragging your business down. However, make sure to do this patiently and privately – this is not something that should be put on display for other employees, who you need to keep focused and positive.

5. Make sure to avoid or eliminate any toxic employees as quickly as possible. Everybody knows those people who are constantly negative. They spend their time gossiping or complaining about any little thing. Some of them spend their time fighting or pitting people against one another rather than focusing on their work, helping to drive other employees and the business forward. These people can poison the entire company and bring down morale. The easiest way to deal with them is to try to identify and avoid them before hiring, but some will inevitably slip through the cracks. However, once they have been identified, get them out of your business as quickly and quietly as possible.

Increasing employee productivity in your business is a foolproof method to increase profits. Sales are always necessary, as is production, but optimizing productivity to make the most profit from every sale is a key struggle for any small business. To help boost your profits by maximizing productivity, be sure to heed the suggestions above and keep your eyes open for other areas of improvement going forward.

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The purpose of Human Resources (HR) is to ensure our organization achieves success through our people. Without the right people in place—at all levels of the organization—we will never be able to execute our Strategy effectively.

This begs the question: Does your organization view HR as a support function or a strategic one? Research shows leading organizations leverage HR as a strategic function, one that both supports and drives the organization's Strategy. In fact, having strong HRM capabilities is a source of Competitive Advantage.

This has never been more true than right now in the Digital Age, as organizations must compete for specialized talent to drive forward their Digital Transformation Strategies. Beyond just hiring and selection, HR also plays the critical role in retaining talent—by keeping people engaged, motivated, and happy.

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