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Employee Productivity vs. Hours Worked: Which One Matters the Most?

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What are productive employees? Are they the workers who clock in for 40 hours per week — or are they the employees who finish their tasks on time?

More and more employers are tracking tasks completed and overall productivity over specific hours worked, especially in hybrid and remote settings. This approach can improve your workforce's productivity and empower your employees to take control of their workflows. However, these new strategies won't benefit every company.

Employers should learn the most significant differences between employee productivity and hours worked to determine the best approach.

What Is the Correlation Between Working Hours and Productivity?

Various studies have analyzed the connection between work productivity and scheduled hours. On paper, if an employee adds 50% more hours to their schedule, they should ideally see a 50% boost in their completed work. However, the exact opposite usually occurs.

Under most circumstances, employees experience a decline in productivity when working longer hours. Unfortunately, these productivity dips extend throughout their full workday rather than their overtime hours. For example, an employee working a 12-hour day may accomplish two-thirds of what they would on an eight-hour day. This is often attributed to stress, a lack of focus, and exhaustion.

Employee Productivity vs. Hours Worked: 2 Different Approaches

Different employers disagree over whether it's better to track employee productivity or hours worked. In many cases, the best option depends on an employee's specific role and primary goals.

Many traditional workplaces stick to 40-hour workweeks that dictate employees' daily start and end times. However, since 2020, non-traditional and hybrid schedules have changed how many employers approach their teams' productivity.

Some employers let workers decide which days and times they work as long as they attend important meetings, hit their deadlines, and meet a minimum number of hours. This way, employees can schedule themselves around their best personal workflows and accommodate their other responsibilities, such as picking their kids up from school.

Other modern employers don't track their employees' hours at all. Instead, they track their teams' productivity and completed tasks to ensure their responsibilities are met. In some cases, this results in employees having shorter workweeks — while maintaining the same productivity as before.

Benefits and Drawbacks of Tracking Hours per Week or Day

Even if employees write their own schedules, most businesses track the number of hours they work per week for payroll processing. Measuring an employee's hours can uncover many important details, including:

  • Their earned wages
  • Their attendance
  • Their utilization within your company
  • The best times for group meetings
  • Their overlap with other employees' schedules

Many roles benefit from longer work hours, even at the cost of productivity. For example, call centers rely on having employees on the phone around the clock. While these employers often push for faster calls and higher productivity, the specific hours employees work take priority.

Unfortunately, prioritizing the number of hours worked over productivity has many disadvantages. Many employers average workers' productivity levels based on their weekly or monthly hours, which can cause them to overlook specific boosts and dips in productivity.

Advantages and Disadvantages of Tracking Tasks

Most people have only four or five "focus hours" per day. These are the hours when employees can fully focus on complex subjects and heavy responsibilities. Even the best workers may lose their attention, forget information, or make mistakes if they push themselves past their daily focus hours. Tracking tasks instead of hours can help you manage and utilize each employee's daily focus-hour limit. More importantly, you can let employees manage their focus hours based on their best practices.

As mentioned, some employees may inevitably end up with shorter workweeks if you track their tasks instead of hours. Though some employers may see this as a waste, shorter hours may benefit your business when considering the correlation with productivity. Employees' work efficiency and speed may naturally increase if they know they can finish their work early.

However, tracking only tasks can limit how you analyze an employee's productivity later on. So even if you don't base employees' pay and attendance on their number of hours, you should still track their time for your productivity analysis. For example, many businesses use time-clock software that starts and stops when remote employees are actively working. This can help you identify your team's most productive times and any tasks that take too long.

What Is the Best Approach to Measuring Productivity?

Almost every business measures productivity differently, whether in revenue, sales, or general tasks completed. Identify which metrics are most important to your company and frequently compare them to gauge your team's overall level of productivity.

The most common employee productivity metrics include:

  • Revenue per employee
  • Workforce costs
  • Tasks and projects completed
  • Customer and client satisfaction scores
  • Absence and attendance rates
  • Employee retention and attrition rates

Many flexible and fully remote organizations already use scheduling software to manage their workflows. This can make tracking tasks completed and other key productivity metrics easier, even when employees are out of the office.

Strategies to Improve Productivity Levels in the Workplace

Consider the following strategies to improve your workforce's productivity:

  • Establish flexible hours: Flexibility is about more than working from home. Letting employees choose their work hours gives them more control over their workflow. It can also motivate them to focus on their work when they aren't distracted by other obligations.

  • Promote employee well-being: Mental health can have a critical impact on productivity. A stressed employee usually has fewer focus hours in the day and is more prone to mistakes and distractions. Meanwhile, a motivated employee may finish their work faster and more accurately. Encourage your team to take breaks and use its available health care benefits.

  • Invest in scheduling software: Tools such as Slack and Scoop can boost your team's communication by putting key information in one place. This can improve your company's culture and help employees finish their tasks faster.

Boost Your Productivity Rates for Business Success

Work-life balance is essential to maintaining your employees' productivity, whether they work from home, the office, or both. However, you may not discover any imbalance in their workloads unless you actively talk to your employees and track their productivity metrics. Compare your employees' productivity with the number of hours they work to learn about your team's greatest needs and strengths.

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