How to measure employee productivity in a hybrid world

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As businesses brace for next year and feel the weight of economic slowdown, some leaders increased their focus on employee productivity levels – and they are not happy with the data. 

Companies have reported lower than normal levels of productivity, many of them measuring against pre-pandemic levels. Employees and employers, though, are often split on whether that’s true. More than two-thirds of decision makers believe employees are more innovative in the office, while fewer than 3 in 5 employees believe that’s true, according to a Vanson Bourne survey commissioned by VMware.

This has caused business leaders to hunt down the root of perceived decreases in employee productivity. 

Some companies have reversed remote work policies, calling employees back to the office. Goldman Sachs CEO David Solomon, a vocal opponent of remote work, pushed for employees to return to the office five days a week

Even champions of digital work styles have questioned remote work effects. On Friday, Marc Benioff, co-founder and co-CEO of Salesforce, said workers hired during the pandemic were “facing lower productivity” in an internal message to employees, first reported by CNBC. Benioff questioned whether this was a result of either a lack of training or losing out on in-office culture.

“We have a hybrid work environment that empowers leaders and teams to work together with purpose,” a Salesforce spokesperson said in an email. “They can decide when and where they come together to collaborate, innovate, and drive customer success.”

Currently, Salesforce’s work location policy allows team members to decide how, when and where they work. This includes how many days they come into the office and when to stay home, according to a company announcement last year.

As analytics capabilities expand and businesses have more digital touchpoints to monitor, performance metrics can be misleading. Regardless of work location, it is critical for organizations to be transparent about the chosen productivity metrics and keep big-picture goals in mind when setting them.

Atlassian has consistently spoken out about the benefits of remote work, and employees are allowed to work from anywhere.

“In general, the executive teams focused on productivity metrics are looking to be convinced that distributed work is the future, beyond a reasonable doubt, or disprove its effectiveness altogether,” Annie Dean, head of Team Anywhere at Atlassian, said in an email. “Companies should focus their energy on metrics that help make distributed teamwork effective and efficient for their people and business, not on convincing CEOs with metrics that were never in place to begin with.”

In May 2022, more than half of hiring managers said remote work had a positive impact on their organizations, with 39% reporting no change in employee productivity during COVID-19 compared to in-office times and 37% reporting increased productivity during the pandemic, according to a Harris Poll survey commissioned by Express Employment Professionals.

For leaders supporting remote team members, it’s important to set them up for success by setting norms and practices, according to Anita Williams Woolley, professor of organizational behavior and theory at Carnegie Mellon University’s Tepper School of Business.

Woolley suggested these tactics:

  • Eliminate communication gaps
  • Add tools like task trackers, messaging platforms and whiteboards
  • Keep detailed notes and action items for any in-person conversation without remote colleagues
  • Create concrete, detailed and outcome-focused goals and objectives
  • Implement a fair and transparent process for determining if employees are meeting performance goals

Companies have had varying degrees of success in how productive their WFH employees have been, in large part due to how managers have handled the process,” Woolley said in an email. “An organization’s ‘work from home’ policy is not real if it exists alongside a highly subjective and opaque evaluation system where employees feel like they need to have face time with their boss to get promoted.”

Measuring employee performance

Productivity is not necessarily a well-defined and cross-enterprise term. Productivity can look different depending on the team or the company. 

For IT service desk staff, end-user customer experience might be one way to measure productivity, while a sales team might use the number of sales completed.

However, best practices around performance measures don’t change for a hybrid or remote team, according to Jane Kouptsova, senior research analyst of People and Leadership at Info-Tech Research Group. Both groups should have outcome-focused metrics that align with broader enterprise goals.

If managers are turning to micromanagement, this is a symptom of low trust in employees and low comfort with — or absence of — accurate outcome-focused measures,” Kouptsova said in an email. 

For business leaders struggling to improve productivity levels, an honest root cause analysis is needed, Kouptsova said.

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