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LeadershipProductivity

Bosses are having a big problem measuring performance because traditional productivity metrics aren’t cutting it

Trey Williams
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Trey Williams
Trey Williams
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Trey Williams
By
Trey Williams
Trey Williams
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February 8, 2024, 3:42 PM ET
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More than 70% of business leaders say they need better metrics other than productivity to measure performance.Portra—Getty Images
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Business leaders have a productivity problem.

When it comes to measuring worker performance, organizations have usually relied on traditional productivity metrics to judge the success of an employee. Is a worker completing a certain number of tasks per day, hitting a phone call quota, or putting in long hours at the office? 

But that’s no longer good enough when it comes to trying to optimize performance, according to business leaders surveyed in Deloitte’s 2024 Global Human Capital Trends report, published earlier this week.

Nearly 75% of business leaders said seeking out new metrics to measure performance for workers was important to the success of their organization. But only 40% said they were doing something about it, and just 8% were confident enough to say they were doing “great things” in that arena. 

It’s not that traditional ways of measuring productivity are dead. But Deloitte argues that as tech developments and AI come into play more, workers are in demand for more sophisticated skills that are harder to measure, including problem-solving, creativity, and collaboration. The report recommends focusing instead on “human sustainability”—which includes worker well-being, happiness, and purpose—to help drive better human performance.

That means the need to incorporate new metrics to gauge human sustainability within organizations has become increasingly crucial, according to Michael Griffiths, workforce transformation offering leader at Deloitte.  

“If we ask most business leaders ‘Okay, you’re measuring productivity, but what are you measuring on the human side?’ most organizations would probably say engagement,” Griffiths says. But “engagement isn’t the right metric.”

Engagement is a one-way street, and essentially means how much a worker is willing to give to an organization, he says, but not the other way around. Instead, companies need to look at how to measure trust between workers and their organization, as well as things like workers’ sense of belonging, connectivity, and equity. 

That can be tricky to calculate, but Griffiths says most companies already have the data capabilities. For example, rather than antiquated yearly surveys, leaders should be using pulse surveys to more regularly capture and analyze trust, both in the company and in employees, as well as their feelings on how the organization is serving them. Tapping into data around work-related emails sent during off hours, whether people are using health and wellness benefits, or volunteering, can provide insight into whether a company is working toward human sustainability and better performance.

But there’s good news for companies getting it right. Business leaders who know that they need new productivity measures, and are also finding ways to do so, are about 1.7 times more likely to get both the business outcomes they want, as well as positive human outcomes among their employees. 

“It’s about understanding where your workforce is and whether you are making them better off in every interaction you have with them,” Griffiths says. “If you start to measure those trust elements, organizations can start to see if they are actually driving human sustainability.”

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