Employee Productivity and its Influencing Factors

Employee Productivity and its Influencing Factors 

Organizational performance is a sign of the capacity of the organization for pursuing efficiently its goal and objectives. In this regards, one of the elements which is assessable is the employees’ performance through the level of their productivity. In fact, employee productivity is one of the determining factors for achieving the organizational performance. It is the most reliable parameter. Even if there are sufficient availability of all the resources such as physical facilities (equipment, and technology etc.), funds, and raw and other materials etc. these resources are made meaningless without the support of employee productivity for the achievement of the organizational objectives. Good employee productivity mirrors the ability of the employees to contribute through their works leading to the behavioral achievement which is in accordance with the goals of the organization.

Employee productivity means doing high quality work by the employee with good efficiency. It is measured as the output of the employee in a given time. Output is required to be saleable and usable and of good quality. There are many different ways of measuring productivity. In a manufacturing organization, employee productivity is measured as the work output per man-hour worked. This measurement takes into account quality and efficiency. However, effectiveness is not covered by this measurement. Effectiveness of the employee productivity is determined by the cost benefit analysis of the manpower resources employed versus the output achieved. The organizational management always strives to ensure optimal utilization of manpower resources. Management by improving employee productivity ensures increased output of the organization.

The employee and the organization have expectations from each other. They form a psychological contract which is very significant and is of a dynamic nature and which affects the employee productivity substantially.

The expectations of the employees from the organization include (i) provide safe and hygienic work conditions, (ii) make every reasonable effort for providing job security, (iii) attempt to provide challenging and satisfying jobs and reduce alienating aspects of work, (iv) adopt equitable human resource management policies and procedures, (v) respect role of trade union members and employee’s representatives, (vi) consult fully with employees and allow genuine participation in decisions which affect them, (vii) implement best practice in equal opportunity policies and procedures, (viii) reward employees fairly according to their contribution and performance, (ix) provide reasonable opportunities for personal development and career progression, (x) treat employees with respect, and (xi) demonstrate an understanding and considerate attitude towards personal problems of the employees.

The expectations of the organization from employees include (i) work to the best of abilities, (ii) uphold the ideology of the organization and its corporate image, (iii) work diligently in pursuit of organizational objectives, (iv) adhere to the rules, policies and procedures of the organization, especially the safety guidelines at site, (v) respect authority and other colleagues, (vi) not to take advantage of the goodwill shown by the management, (vii) be responsive to leadership influence, (viii) demonstrate loyalty and not to betray trust, (ix) maintain harmonious relationships with work colleagues, (x) do not abuse organizational facilities and equipment, (xi) observe reasonable and acceptable standards of dress and appearance, and (xii) show respect and consolidation to customers and suppliers.

There are three important theories related to the achievement of the required employee productivity in the organization (Fig 1). These theories are (i) goal setting theory, (ii) systems theory, and (iii) organizations theory.

Fig 1 Theories related to the employee productivity

The goal setting theory argues that when specific goal or targets which are difficult to achieve are set up in the organization, it automatically leads to high levels of employee productivity since the employee works harder for meeting the set targets. However, it is to be noted that it does not lead to increased productivity when it is left on its own. It requires the support of the commitment and team work.

The system theory argues that an organization is comprised of different segments within its structures and if the organization is to increase on its level of performance, then the various systems within the organization is to have shared vision. The systems are to properly identify capability of the employees and are to be working in support of each other in order to raise the level of the employee productivity. It means that each subsystem is to work well for improving the employee productivity. If, performance of an employee is not expected level, then he affects the entire subsystem.

The organizations theory argues that the organization, which is responsible for shaping the attitudes and behaviour of its employees, is to realign all its structure in right manner and put in place a viable organizational culture which enables its primary objective of making the employees to raise their level of productivity.

Employee productivity is greatly affected by the approach of the organizational management. The principles of the management affecting the employee productivity are (i) division of work in order to achieve more and better work from the same effort through the benefits of specialization, (ii) authority and responsibility since the authority brings in responsibility and hence generates useful actions, (iii) discipline which is essential for the efficient operation of the organization, (iv) unity of command since it is less confusion for the employees if they receive orders from only one supervisor, (v) unity of direction  since effective coordination needs that there is only one leader, (vi) subordination of individual / group interests since the interest of the organization is required to take precedence over those of the individual / group interest, (vii) compensation package which is to be fair and is to and reward well directed effort, (viii) centralization which in the organization is to the extent needed for smooth operations, (ix) scalar chain where respect for line authority needs to be reconciled with the need for initiative at lower levels, (x) order which means that that there is a place for everything and everything is in its place, (xi) equity which means fairness in dealing with all employees at all levels throughout the scalar chain, (xii) stability which is reflected by stable managerial personnel in the organization, (xiii) initiative taken by employees is a source of strength and is to be encouraged, and (xiv) ‘Espirit de corps’ which means harmony and unity and which is a great strength for the organization.

Influencing factors

There are several elements in the organization which affect the employee productivity. First element is that the employees need to feel that they are part of the organization and not just the workers at their workplaces. Once they feel that they are the part of the organization, they work harder and produce work of the highest quality. Their creativity levels increase and they generate several ideas for the growth of the organization and these have a positive effect on their productivity. Second element is that the relationship between the management and the employees is needed to be professional with a hint of mutual respect. When the management and the employees work as a team in the organization, the organization is more qualified to meet the customers’ requirements.  The customers’ satisfaction gets reflected in the employees’ behaviour and they feel more satisfied. Higher satisfaction levels in the employees result into improvement in their productivity. Increased employees’ productivity helps in greater utilization of the capacity of the human resources of the organization. Further, management-employees relationship can also result into inadequate planning, supervision, and communications. All these lead to lower levels of employee productivity. Some of the major factors influencing employee productivity are given below.

Workplace stress – Workplace stress is the response employees can have when presented with work demands and pressures which are not matched to their knowledge and abilities and which eventually challenge their ability to cope. It occurs when there is a mismatch between the demands of the job and the resources and capabilities of the individual employee to meet those demands. It is the adverse reaction which the employees have to excessive pressures or other types of demand placed on them. Workplace stress is a matter of great concern.  Excessive stress can interfere with the employee’s productivity and impact the physical and emotional health and the ability of the employee to deal with it.

Motivation – Motivation is the desire to achieve beyond expectations. It is driven by internal rather than external factors. It means to be involved in a continuous striving for improvement. It is a psychological process which results from the interaction of the employees with the work environment and is characterized by the willingness of the employees to increase their work effort in order to achieve a specific need or desire they hold. Motivation of the employees is crucial in order to achieve the organizational goal and objectives. The motivated employees have behaviour of self-satisfaction, sell-fulfillment and commitment which are necessary to produce better quality of work. Motivation has a big impact on the employees’ performance. It increases the job involvement by making the work more meaningful and interesting and hence improves employee productivity.

Discipline – The discipline teaches self-control. With discipline, employees bring their behaviour in agreement with the organization’s official behaviour thus they regulate their activities for the common good of the organization. As a result the employees are induced to work for a peak performance. Discipline also imparts an element of stability in the organization despite several differences in informal behaviours pattern of the employees. It develops among the employees a spirit of tolerance and a desire to make adjustments. It inculcate in them giving and seeking of the direction and the responsibility. It creates an atmosphere of respect for the human personality and human relations. It increases working efficiency and morale of the employees so that their productivity is stepped up and the cost of production improved.

Morale – Morale can be considered as the total satisfaction which the employee derives from the job, the prevailing atmosphere, and the factors which appeal to them. It is a conglomeration of attitudes and feelings which constitute a reserve of physical and mental strength including factors like self-confidence, optimism and a positive mental attitude. It is a way of describing how the employee feels about the job, management, and the organization. These feelings are tied to the behaviours and attitudes which the employee shows in the workplace. When employee has good morale, he feels committed, develops higher rates of job satisfaction, creativeness and innovation, respect for his own job, commitment to the organization, eagerness to satisfy group objectives instead of individual objectives, and desires to improve the performance. He feels motivated to be productive. He works harder, produce more, meet deadlines and give it his all. Low morale of the employee takes a toll on employee’s performance and productivity.

Rewards and incentives – Through workplace rewards and incentives, employees of the organization enjoy a positive and productive work environment. Rewards and incentives are big enablers for boosting the employee productivity. When recognized for stellar performance, employee has increased morale, job satisfaction and involvement in his work. As a result, the organization experiences greater efficiency, improvement in employee productivity.

Communication – It is the process of sharing ideas, information, and messages with others in a particular time and place. There are many means of communication. It is the lifeblood of an organization and, without it, things do not get done. To be an effective and valuable at the workplace, it is important that the employees are to have skills in the different methods of communication. With effective communication, the organization is able to have good coordination among its employees, teams or units. Communication is closely linked with the employee productivity.

Systems and procedures – Procedures are series of steps constituting a planned method of carrying out an activity. A number of procedures make a system. Working with systems and procedures provides the employee the necessary implements for performing and there is consistency in the quality of the output. There is an improvement in the employee productivity in the organization since one need not reinvent the wheel every time an activity is started.

Training and development – Training and development is the process aimed at improving the performance of the employees in the organizational settings. It is an organized activity for increasing the knowledge and skills of the employees. Through ‘training’ employee is taught specific skills while through ‘development’ employee’s personality and management skills are enhanced. Training and development provides thrusts for boosting employee productivity.

Safety at workplace – A safe workplace environment is also a productive environment since it protects the process and the equipment from getting damaged and keeps the employee away from physical injuries. It thus has a positive influence on the performance of the employees, process, and equipments. This positive influence results into a positive impact on the employee morale, employee efficiency, and employee productivity. Employee productivity show vast improvement if the work is carried out by the employee in a workplace which is having a safe and healthy environment. Safe and healthy workplaces are always the most efficient. Safety is a key enabler of efficient employee performance, and productivity. When safety at the workplace is neglected then it results into lower morale and productivity of the employee.

Housekeeping and cleanliness – Housekeeping and cleanliness refer to the processes which ensure facilities, equipment, work areas and access routes are kept in good condition. Housekeeping and cleanliness promotes efficient production and a good working environment at the workplace. In fact, efficient production and a good working environment are complementary to each other. The elimination of inefficiencies and accident hazards caused by unfavourable conditions in and about the workplace is necessary in getting the job done properly and safely. The attention to these important details contributes to safe working and has a big positive effect on the employee productivity.

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