Productivity

7.1. Key finding

Few truly comprehend where ideas and innovation come from – only companies that understand that some things cannot be measured will succeed.

7.2. Measuring the wrong values

In 2020 staff – particularly knowledge workers – will be a bigger cost in relative terms than they are now. Employers, aware of the rising cost of employing and training workers will seek to monitor their effectiveness. Among our Delphi Panel of experts, 67% agree that employers will have metrics in place to measure productivity.

The first problem is that any productivity measure must be multi-dimensional. A single measure invites staff to focus their energies on achieving that goal – probably to the detriment of other useful activities.

Secondly companies are likely to focus on measuring inputs rather than outputs. There will be a tension between measuring productivity and giving people the space they need to be creative. Only the most imaginative and philosophical companies will recognise that creating metrics does not facilitate creativity. People need to be given the right space and environment to generate ideas.

Ian Brinkley agrees, saying: “[Productivity] will be measured badly. There is an obsession with trying to measure everything. What you should be concerned with is: what is the actual outcome, the outputs? People are obsessed with trying to measure the inputs which is pointless.”

The third problem is a lack of standardisation. As yet there is no commonly used method of calibrating the generation of ideas and knowledge. However, economists are close to creating a measure of how the creative element of industry contributes to GDP. While a useful contribution, it is likely that the measures employed by economists will be too theory-based for practical application.

Charles Cotton of the Chartered Institute of Personnel and Development is sceptical about the current ability of British managers to performance manage their teams. However he sees some signs that businesses are responding to the challenge.

“I think, to be fair, organisations themselves recognise that [managers often don’t have the right skills to reward productivity]. They are, increasingly, spending more time, energy and resources on their line managers to ensure that they are able to have those difficult conversations... ...organisations are now ensuring when they do promote people to people management responsibility that they have those skills beforehand.”

7.3. Measure for measure

The measurement of productivity means radically different things for different groups.

• Graduate workers: Productivity measures place a degree of pressure on graduates – they will be eager to play to the scoring system in order to progress and deal with the debt created by their education. For this reason the evaluation of performance must be multi-faceted – the existence of only one or two measures will encourage staff to strive to achieve only those goals, to the detriment of the company’s broader ambitions.
• Sandwich-generation: For this group these measures can be a source of great anxiety. As they attempt to balance jobs and family, they will fear that others, free of the commitments, will be able to produce more, be more flexible and appear to produce more. This is a test of the natural inclination of employers to measure on numbers alone. The value of contributions needs to be measured as outputs and needs to be measured sympathetically.
• Older workers: These workers are in a different position. Their contribution will often be their experience; productivity per se may not be so important for this group. A different evaluation method will be required; the value of experience needs to be calibrated on a separate scale.

7.4. Conclusions

In 2020 productivity will be measured and the best companies will show a sensitivity in calibrating performance. The elite companies will accept that some things really cannot be measured.

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