We lag 16% behind the average for G7 countries in terms of gross domestic product per hour worked. France, Germany and the US all enjoy greater productivity. Moreover, the latest statistics make gloomy reading. Figures released in October by the Office for National Statistics covering the quarter from April-June 2019 represented the fastest annual fall in UK productivity for five years.
These are testing times, for sure. But in tough circumstances high productivity is more welcome than ever. So, what’s causing the problem? And at the individual business level, what can be done to bring about improvement?
“Productivity and wellbeing are inextricably linked, that’s why companies are going into wellbeing big time – so that people feel valued and trusted,” says Sir Cary Cooper, professor of Organisational Psychology & Health at Alliance Manchester Business School. “My own view as to why productivity is poor in the UK is because we don’t have many line managers who have emotional intelligence.”
Cooper, author of books including Well-being: Productivity and Happiness at Work (co-authored with Ivan Robertson), says all too often managers are promoted on the back of technical rather than people skills. So they may lack the social skills to recognise when people are overloaded, and might manage by fault-finding, which is damaging to productivity. Whereas management through praise and reward achieves far better outcomes.
“If you want to create a positive and productive workplace culture within your business, it starts at team level and requires leaders and managers to have regular ‘check-ins’ with their team members,” says Nic Marks, Founder & CEO of Friday, a specialist in measuring happiness at work. “These conversations not only build trust, they also enable teams to creatively adapt to challenges and opportunities, therefore giving the best chance of business success. Everyone wins.”
Marks, a world renowned expert on happiness in the workplace, believes happiness is an excellent indicator to measure because it correlates strongly with performance. It’s also far more easily understandable than that much-used and sometimes abused term ‘engagement’. After all, we’re all aware whether we feel happy or not. Expressing how engaged we are at a given time is nowhere near as clear cut.
“Everyone knows that miserable people do miserable work,” adds Marks. “However, fewer fully appreciate the impact of positive people. Our research shows that happy teams are more productive, innovative and creative. Happier employees also stay on the job for longer, thereby reducing staff turnover.”
Business organisation the CBI is so concerned about driving up productivity that it has produced a series of reports on the subject in recent years. The latest, Great job: solving the productivity puzzle through the power of people, was published in May and maintains that improvements to how businesses lead, engage and motivate their people can have commercial, reputational and economic benefits.
According to the report, firms that lift their people management performance up from the lowest levels to the UK average can boost productivity by a massive 19%. And if the UK overall achieved a 7% rise in performance on people management, the country’s income would balloon by around £110bn. That, the report elaborated, is like “adding the value of the UK’s construction sector all over again”.
The report highlighted four common barriers that hinder progress: UK firms tend to overestimate how well they lead, engage and develop their people, often because they lack effective means to measure and benchmark their performance; the absence of a shared view of the nature of the problem or how to solve it means different parts of a business pull in different directions; leaders often underestimate the importance of their words and actions in making good practices stick; and finally, as challenges tend to vary depending on business size, it’s hard for leaders to know what actions to take.
Another report, this time produced by HR body CIPD, finds a significant part of the UK’s low productivity levels, compared with some other major OECD economies such as Germany, can be attributed to poor workforce skills development. However, People skills: building ambition and HR capability in small UK firms concludes that what’s arguably as important as the development of workforce skills is the extent to which they are matched to employers’ needs and used effectively in the workplace. Citing ONS data, the report asserts that in far too many cases, UK workers are not well matched with their current jobs, with some over-skilled while others are under-skilled for their role.
The drawback with over-skilling is that it is a waste of the resources used to acquire those skills. Plus, over-skilled employees tend to be less satisfied at work, increasing the likelihood that they’ll leave and by so doing reducing productivity. Under-skilling likewise affects productivity because it slows the adoption of more efficient technologies and approaches to work.
The more complicated the business, the more challenging this kind of issue. Philip Thompson, managing director of Leeds-based Resource & Tebays oversees a business model that delivers a diverse range of operational services. Most of the projects undertaken are multifaceted and may entail a mix of creative, design, marketing, event management, data manipulation, print, direct mail and so on.
“We don’t operate a one-size-fits-all approach, but we do have set processes to follow in each area,” says Thompson. “What is important is that all departments understand the need for open communication and a full understanding of a project and the pinch points within each other’s specialism. Through this interaction and understanding we can ensure projects pass through departments efficiently.
“You can have all the reports and systems in the world but if you can’t get the buy-in and ownership from the operational teams, it’s pointless. So we always consult with the business or specific teams, agree processes including improvement areas, keep communication fluid and to the point, creating an open and proactive culture.”
Ryedale Group managing director James Buffoni says that to improve worker productivity and monitor performance properly companies should create a “golden thread” that runs through the business. In Ryedale’s case, that golden thread entails regularly discussing the overall company plan with goals, targets and rationale, then measuring teams and feeding back how they specifically contribute to that plan.
“In manufacturing it might be better known as plan-do-review or plan-do-check-act, but the rationale is the same: have a plan, make it into an exciting story, make it relevant to teams or people using quantitative or qualitative measures, or both,” says Buffoni. “Usually plans involve some type of change, which is usually thought to be feared. But for me it’s exciting and inevitable. So the issue is not whether or not we are going to change, but what, how much and by when. That’s not for everyone!”
ProCo CEO Jon Bailey says that in order to boost productivity it’s essential for managers to “not just supervise!” A key part of their role is to educate teams on how they can impact company net profit through their individual performance and productivity.
“Managers need to be trained in how to get the best out of their team and also understand how their team can get the best out of them as a leader,” he says. “It’s all about getting the team to be proactive and take accountability for their roles and responsibilities. Incentives can help drive performance and I’m a big fan of leading from the front so I believe the manager should be inspiring this engagement through their own behaviour.”
This will come as music to the ears of Carol Atkinson, Professor of Human Resource Management at Manchester Metropolitan University. “While incentives might improve productivity to some extent,” she says, “this is typically time-limited; i.e. the effects wear off. Productivity is more closely linked to good management practice.”
In Bailey’s opinion, scorecards, tables, performance metrics and regular reviews all help clarify expectations, which is key in the push for greater productivity. At ProCo, 90-day plans are constantly reviewed together and visible to all. In this way, everybody knows who’s doing what and what’s expected.
“Key to getting this right is the use of metric specific leading KPIs, not lagging KPIs,” says Bailey. “This ensures constant focus on the future impact people can have on the business rather than a post mortem on the past.”
Professor Cooper is vehement on the question of performance monitoring. “Abolish the annual appraisal, dump it!” he demands. It would be far better in his view to move to continuous appraisal in real time that entails letting people know there and then when they have done something well. And equally, when and how they could have done better so that criticism is clearly associated with actual employee behaviour.
Begin on day one
Precision Printing HR Manager Kerry Watkins is of the same mind. “We have found that implementing clear and agreed personal development plans from the point of being hired enables employees to see progression, envisage a future and keep focused from the very start of their employment journey. Regular appraisals and one-to-ones uncover progression desires: if someone genuinely has an interest in a certain role, or, a desire to progress and is listened to, they are likely to put the work in to prove themselves.”
By contrast, she adds, every organisation needs those employees that are reliable and content carrying out a familiar role for a lengthy period of time – in fact, often they are the stability of the company. It’s important that the organisation understands their strengths and utilises each employee in the best possible way. Both for them as an individual and for the company.
Shift patterns and the make-up of the team also have a bearing on productivity. In terms of the former, shutting on a Friday night but opening on a Saturday day “causing an interrupted workflow” is an example Precision has learned from and addressed this year.
On the subject of team balance, Watkins adds that introducing varied levels of workers into each department has provided invigoration and support – trainees/seconds are as important as experienced and qualified workers.
“A department of only qualified staff might produce great pieces of work but housekeeping, organisation, job satisfaction all suffer,” she concludes. “We are constantly monitoring workflow and I have a feeling the factory will always be in some state of reorganisation in an attempt to improve this – and so it should be. Preparing for change is best, but reacting to it is better than ignoring it.”
Improve productivity through better people management
Steps managers can take
Have a clear vision, values and goals that embody the company and ensure everyone is included in its achievement. Employees who can see the value they add to the company will work harder and are more likely to offer ideas to improve productivity
You could incentivise ideas that have an impact on cost savings, this encourages employees to think about changes that could aid improvement. The more saved, the bigger the incentive
Ensure you have the right managers in the job. Over promoting really good employees into posts where they manage people can be counterproductive
Train your future managers; it is never too early. Not only will you be supporting and investing in your current workforce you will always have succession plans in place.
Give praise. Recognise a job well done at an individual and team level. People like to feel appreciated whether we admit it or not
How to monitor performance properly
This starts from day one – induction and probation. If you induct your employees efficiently and instil the values of the company, you start on the right foot. Employees will know exactly where they stand and what is expected of them. They will learn by example so visibility of the culture and values of the company must be seen at every level. Use a probationary period effectively, do not ignore the benefit of the start of an employee’s journey, as recruitment costs money and time. Ensure managers are capable of implementing and reviewing performance
Don’t be scared to fail or extend somebody’s probationary period. It is better to deal with the issue at the start of employment than to have to manage an underperforming team member 18 months into their role
Be nice, but not too nice. It is important to be fair and engage with employees, albeit being too nice allows concessions in performance to creep in. Generally, such issues are easy to resolve relatively quickly. However, allowing employees to blur boundaries may lead to bigger issues down the line
What sort of changes might you need to make
Listen to your employees. Introduce employee forums that give all shifts and departments a voice. You often find that employees that permanently work nights do not feel included or part of the team. Frequently, they have a perception that they are ignored, which ultimately has an impact on productivity. Lateness and absence are generally higher
Flexible working. Don’t automatically dismiss an employee’s request for flexible working. Workplaces are changing and employees do appreciate what you do for them, and will in turn be loyal. It is important to retain good employees. And with the impact of an older workforce, we have to!
Communication. Employees need to feel secure in their job and this can be difficult in an increasingly competitive industry. If employees understand why you need to do something they are quicker to accept and get on board with any changes you need to make. Keeping employees in the dark leads to employees guessing; often incorrectly. When there is a communication, remember to ensure that everyone and every team gets the same message. If employees fail to receive a message you will make them feel less important and this could also lead to increased absence
How to ensure standards don’t slip
Consistency. You are destined to fail if you are not consistent. All for one and one for all
Train for the future. Technology is always changing, you need to embrace these changes
Training and development: employees that are developed and trained effectively will in turn train, develop and support other employees more effectively. This will ultimately increase productivity and work will be completed with fewer mistakes
Effective one-to-ones. This is a great opportunity, and often a missed opportunity, to discuss best practice and thank employees for a job well done. It’s an opportunity to deal with any concerns and establish what motivates employees as it is not always money. It will encourage open communication