Productivity: Measuring What Really Matters

If you’ve ever found yourself wondering whether your team is truly being productive or just looking busy, you’re not alone. It’s a common problem. But with the right mindset and measurement strategies, it’s a problem you can solve.

Productivity Isn’t About Being Busy - It’s About What Gets Done
We throw the word "productivity" around a lot. Businesses want more of it. Governments are worried we’ve lost it. And teams are often confused about what it actually means.

Here’s the truth: productivity isn’t about how busy someone looks or how many hours they spend in front of a screen. It’s about what gets done—and how efficiently it's done.

Productivity vs. Busyness: Know the Difference

Somewhere along the way, we started equating long hours and full calendars with output. But the two are not the same.

Being busy means filling time. Being productive means achieving results.

This confusion became particularly apparent during the pandemic when businesses transitioned to remote work. Many managers struggled without the ability to physically see their employees working and assumed that “butts in seats” meant value was being delivered. In reality, some people became more productive working from home, while others simply stayed busy to appear useful.

A Simple Definition

So, what is productivity, really? At its core, productivity is output relative to input. How much value is being delivered based on the time, energy, tools, and resources going in?

For example, if a team produces 100 units of work in 50 hours, their productivity rate is 2 units per hour. But there's more to it than numbers. Quality matters. If the work needs to be redone or contains errors, those outputs don't count the same.

Put simply: high output plus high quality equals true productivity.

Why Bigger Isn’t Always Better

Many business owners think growing the team means growing the business. But more people doesn’t automatically mean more productivity. In fact, having too many people can lead to inefficiencies, communication breakdowns, and bloated payrolls.

Sometimes, smaller, more productive teams outperform larger teams that are just spinning their wheels. It’s not about how many people you have—it’s about how much gets done and how well.

Measuring What Matters

If you can’t measure it, you can’t manage it. That’s true for productivity, too.

But measurement doesn’t mean micromanagement. It means understanding where your time and money go, and what you’re getting in return.

Here are some simple but effective ways to measure productivity in different kinds of businesses:

1. Time Tracking

Ideal for service-based businesses, especially those that bill by the hour. Time audits help you identify how much time is being spent on billable work versus admin or non-billable tasks. You can use tools like Toggl, Harvest, or even a basic spreadsheet.

2. Revenue Per Employee

Track how much income is generated per team member per hour. It helps you understand who’s driving value and where you might be carrying dead weight.

3. Project Cost and Time Audits

For businesses working on projects, monitor how much time and resources go into a project compared to the budgeted scope. This reveals over-servicing, underquoting, or inefficiencies in delivery.

4. Error and Rework Rates

High error rates or frequent rework kills productivity. Tracking these helps highlight where process improvements are needed.

5. Outcome-Based Metrics

Especially for knowledge workers, measure results, not hours. Did the campaign generate leads? Did the report influence decision-making? Look at what’s achieved, not just what’s done.

Pick One Metric and Start Small

Overhauling your productivity tracking can feel overwhelming. The trick? Start with just one metric.

Maybe it's billable hours, or project completion time, or client satisfaction. Start tracking it, get a baseline, and improve from there. Over time, layer in more metrics as your systems mature.

Trying to track everything at once will likely lead to data overload and confusion. Start simple and build up.

Technology Can Help (But Won’t Fix Everything)

There are loads of tools available to help track productivity—from AI-driven time tracking to workflow automation. But no tool will fix a broken process or poor communication. Use tech to support your strategy, not replace it.

Watch Out for Vanity Metrics

Not all data is valuable. Be wary of tracking hours worked or login times if they don’t relate to results. These are input metrics, not outcome metrics. Focus on what contributes to your business’s bottom line—whether that’s project delivery, customer satisfaction, or profit margins.

Why This Matters Now More Than Ever

The workplace is changing fast. Between economic shifts, tech advancements, and changing employee expectations, productivity needs to be front and centre for businesses that want to survive and thrive.

Employees are more aware of job security concerns and, consciously or not, may be making themselves look busy rather than being productive. On top of that, data shows productivity is in decline across many sectors, despite access to better tools and systems.

It’s on business owners and leaders to shift the focus from activity to impact.

If you’ve ever felt like your team is busy but not effective, or if your profits don’t reflect the effort your team is putting in, it’s time to rethink productivity.

The key isn’t to push your team harder or longer—it’s to get clearer about what really matters and start measuring that.

Track it. Analyse it. Improve it.

It’s the only way to build a business that’s both efficient and profitable.

An Invitation

If you’d like to connect with other business owners, leaders and managers, I’d love for you to join us inside our free Facebook Group where you can connect with other like minded business owners, leaders and managers to discuss all things HR: https://www.facebook.com/groups/hrsupportaustralia