Why Worker Productivity Matters and How to Improve it

In April 2014, The Economist carried a story on worker productivity in Brazil. It is an interesting read for anyone who doubts the importance of productivity to the growth of a company - small or large.

China, where worker productivity accounted for 91 percent of the GDP growth between 1990 and 2012, roared at more than 10 percent GDP growth per year. In comparison, Brazil’s worker productivity during the same period was 40 percent. Unsurprisingly, it grows at a measly 2 percent. The Economist makes a daring, but dismal, prediction - unless Brazilian companies change, the Brazilian economy’s growth will come down to only 1 percent.

There are many useful lessons to be learnt from the largest country in South America on the importance of worker productivity. The most significant of them is - companies that do not invest in worker productivity fail to realise their full potential and grow slowly.

Worker productivity is important. Companies can become more productive in two ways:

    They can hire more workers, and
    They can make their existing workforce more efficient.

 There are upsides and downsides of both methods.

Recruitment of more workers

This is a quick fix solution. It works well in places where unemployment rates are relatively high, and where workers are required for mostly unskilled or semiskilled jobs. A downside of this approach is that it is hugely expensive. Most companies cannot afford to add their highly skilled employees at a short notice.

Improvement of worker productivity

A lesser expensive, but more efficient, method is to conduct a research on existing production methods and devise plans that elicit the most out of existing employees by making them more able. Companies can introduce time tracking, they can use employee performance review systems, they can invest in newer machines, and they can do a million other things to make their existing workforce more productive. This method may not always show immediate results; but it is sure to work in the long run.

Successful companies and societies focus more on improving worker productivity than rely on raw strength - recruitment of more people. The Economist story makes it clear workers in North America and Europe are, on average, more productive. It shows. Their economies are robust.

There are many ways to make a workforce more productive. It takes a combination of an understanding of psychology and a use of right tools.

How much understanding a manager has of their workers, varies. Two managers with equivalent credential can produce vastly different results. A use of right tool is more objective and reliable.

There are a number of excellent employee performance review tools, including Talygen’s performance review, available. They are intelligent software that take care of the review tasks; such as feedback, skills, and how many goals are being met. They are able to perform a number of other tasks, streamline employee reviews, and help companies and businesses create strategies that help them maximise productivity.