The secret to setting realistic productivity goals

Productivity is one of the most important metrics for operations leaders. Looking back at previous days and months, it gives you a crucial picture of performance – but looking forward, productivity targets are vital for planning your workload over the coming weeks and months. They’re also a great way to motivate teams to achieve more. But what targets should you be setting your teams? How do you set a target that’s achievable enough to motivate your team, but enough of a stretch to boost productivity, when productivity is often heavily influenced by the volume of work coming in?

In this blog, I want to share our perspective on solving this challenge. At ActiveOps we are all about helping companies boost productivity in sustainable and long-lasting ways, so over the years we’ve picked up a few tips and tricks that are worth sharing here.

Let’s define productivity

It’s worth taking a moment to ensure we’re both working on the same definition of productivity. At ActiveOps, we define productivity as a way of measuring employee performance compared to standard time. We calculate productivity by first working out how many hours in a week an employee spends completing core work – that means work which is delivering a key part of their job.

Once we know how long they’ve spent on core tasks, we then look at how many tasks they have done. In the ActiveOps world every task takes a certain amount of time; by taking that time, and the number of tasks someone has done, we can express their productivity as a percentage. So, for instance:

In a busy claims department at a large insurance company during one 37.5-hour week, Georgia had capacity to process 200 claims, but only ended up processing 160. So, Georgia’s productivity is calculated as 80%.

The approach can obviously be scaled up to teams and even whole departments. But, we all know that productivity varies day-to-day. If we took a single day and used that as our productivity target, then it’s quite likely that our plans wouldn’t match reality very closely at all. So, let’s get into the detail of setting goals that are realistic for planning purposes, and motivating for individuals, even when workloads and productivity fluctuate.

• Tip 1: aim for the 85th percentile

  1. It allows teams to have targets tailored to them, and which should stretch each team equally.
  2. Over time the 85th percentile should be a higher level of productivity as the team continually strives to work at that percentile.
  3. It’s the right level of stretch. The 100th percentile is the best result achieved in the period, which may be unsustainable to maintain, and the 50th percentile likely leaves performance improvement opportunities on the table.

  An example of the 85th percentile in action

  Georgia and Jon are two team leaders. They each review their team’s productivity; Georgia discovers that, based on the last four weeks, the 85th percentile of productivity for her team is 96%, while Jon’s team’s 85th percentile is 87%. They both use those as the target for their weekly plans. Each time they make a new plan, they recalculate their 85th percentiles based on the previous four weeks. At the end of a quarter, the 85th percentile for Georgia’s team is now 103%, and Jon’s is 99%, demonstrating that the productivity of her team has gradually been increasing.

• Tip 2: keep some WIP for quiet days

  You’ve no doubt heard the expression that work expands to fill the time available. And that’s the model most operations see – when there’s more WIP, productivity goes up, and when there’s less, it goes down. One way to get hold of that, therefore, is to ensure that you always have a certain level of WIP so that you have enough to see you through quiet days.

  Of course, this is a tricky balancing act. Various tasks will be time-sensitive, and so they can’t be left on the back burner lest you fail to meet an SLA or customer service starts to suffer. But, if you dig into the detail, it’s not as hard to do this as you might think. As long as your weekly plan makes sure that all your SLAs and delivery times will be hit, then all you need to do is find other value-adding tasks that employees can do if they get through all their core tasks. And then, if work in drops one week, you still have enough WIP to keep everyone working at the same productivity level.

  
  
  

• Tip 3: be prepared to adjust the target in the face of reality

  Remember that the rules and guidelines we’ve mentioned so far shouldn’t trump your own experience - or the unexpected. There will always be events that you can see coming which will change what your team can achieve, and events that you couldn’t see coming which will do the same.

  Unexpected events, of course, are an especially relevant topic right now in operations. Geopolitical turbulence and its accompanying economic fallout can have radical impacts on your workload in a very short space of time. If the ground has suddenly shifted underneath everyone’s feet and the goals you had are no longer achievable, then adjust them. It might feel slightly uncomfortable reporting the news to your manager, but it will mean that your productivity forecast is more accurate – and you’re still motivating your teams to achieve as much as they can.

  It also works in reverse – if things suddenly get very busy, you can adjust targets up. Just make sure that you’re not accidentally pressuring team members to overwork themselves, as this will hurt your operations in the long run.

Realistic goals give you control

I hope this blog has given you some ideas for how you can start to set realistic productivity goals for your teams and when building out your plans. A final thought to leave you with is that the more information you have – and the more realistic your goals are – the more control you gain over your operations.

When you get planning right, it means that everyone is working at an optimum rate of productivity – you’re getting as much done in a day as you can realistically expect to. That means that you’re less likely to be surprised by productivity issues such as teams falling short of their goals and SLAs coming under threat. It also means that, if something like that does happen (and, let’s face it, there will always be those moments regardless of the quality of your plan), you have a much clearer idea of how you can fix it without causing more problems for other teams along the way.

That level of control helps keep work out at a steady (and steadily increasing) level, of course – but it also helps reduce pressure on you, your teams, and their teams if you’re managing team leaders. As a result, everyone is working in a more comfortable environment, able to give better service, and ultimately you’ve created a more effective operations and a better place to work. Not bad!