Management changed productivity measures

Someday over the previous eighteen months, the novelty and novelty of distant work wore off because the on a regular basis components simply turned regular. However as Zoom conferences and group digital glad hours seeped into fashionable tradition, a extra delicate change was underway. Past simply how professionals collaborate and talk, the pandemic additionally compelled managers to reassess how they consider the success of their group.

Utilizing survey information from over 1,000 U.S. hiring managers, we at Upwork recognized administration observe adjustments that companies made throughout the pandemic, particularly round how they measure productivity. The info means that administration is altering how they measure productivity. 

In a standard workplace setting, managers can simply observe employees. Everybody usually reveals up on the workplace on the identical time, spends the identical period of time there, then leaves on the identical time. If an worker is placing in much less time by exhibiting up late, leaving early, or not exhibiting up in any respect, a supervisor will rapidly understand it. 

Equally, the workplace setting additionally permits informal remark by the frequent observe referred to as “administration by strolling round.” First popularized by Hewlett Packard within the Nineteen Seventies, this strategy took managers out of their workplaces and had them spontaneously interacting with workers to see what they had been engaged on. 

The distant work world blows up these administration practices rooted in monitoring inputs. A supervisor’s skill to casually observe work hours and inputs is drastically diminished. An worker who’s habitually late to their residence workplace, leaves early, or takes lengthy absences all through the day, is much less prone to be seen. This presents a problem for managers who leveraged employee inputs as a part of their evaluations of how individuals are performing.

With a purpose to compensate for this blindness, many are rethinking how they measure productivity. 

One strategy is to maneuver away from the extra informal and extemporaneous measurement of inputs that workplace employees are used to and in direction of extra formal and steady measurement. Productivity monitoring software program is one choice, which may measure each when employees begin and cease working but in addition how usually they’re at their keyboards. 

There are downsides to this strategy. Whereas employees perceive that distant work presents a problem to administration, going from implicit to specific monitoring can simply be interpreted as a scarcity of belief, and abiding by a digital punch card might really feel like an erosion of professionalism. 

An alternate strategy for administration is to vary their perspective by focusing much less on inputs and extra on outputs. Somewhat than asking whether or not employees are placing in sufficient hours, managers taking this strategy would, as a substitute, ask whether or not they’re producing sufficient. This strategy affords employees extra flexibility, each round what number of hours per week they work and after they work these hours. What issues, on this perspective, is what you get performed, not once you do it or how lengthy it takes. 

Survey proof suggests that companies are taking each approaches to measuring productivity. A larger embrace of undertaking productivity software program talked about above, for instance, means that some are embracing extra enter measurement. As well as, a big share of companies reported that they’re putting extra deal with the variety of hours per week an individual works and likewise whether or not individuals are working conventional enterprise hours. 

Nevertheless, whereas some are focusing extra on inputs, a good larger share are targeted extra on outputs. For comparability, whereas 26% of hiring managers say they’re extra targeted on whether or not individuals are working throughout conventional enterprise hours, 64% say they’re now extra targeted than they was once on the standard of labor performed. 

What’s extra, a considerable portion say they’re much less involved about hours labored and the variety of hours per week an individual works than earlier than the pandemic.

Extra distant, extra flexibility

What’s inflicting these differing approaches to measuring productivity in a distant work surroundings? To reply this query, we checked out how an organization’s expertise with distant work might impression their strategy. We discovered that those that have seen the best improve in distant work are additionally prone to be much less targeted on hours labored. In different phrases, the companies who’re leaning most into distant work are the identical ones who’re focusing much less on inputs. 

To additional perceive the connection between adjustments in how productivity is being measured, adjustments in how work is being performed, and distant work, we ran a second survey. This time, we surveyed 600 shoppers on Upwork to investigate how corporations which might be plausibly essentially the most snug with distant and versatile work preparations are adapting their conduct round productivity measurement. Right here we see a good larger deal with outputs and a decline in deal with inputs. Notably, 41% are much less targeted on conventional enterprise hours and 31% are much less targeted on the variety of hours per week an individual works.

What this implies for companies and the labor pressure

These shifts in administration practices could appear insignificant at first look, however, collectively, they characterize broad and deep adjustments in how companies function. Companies have embraced new software program, instituted completely different administration practices, and as this new information reveals many have uprooted how they measure the success of their groups.

However what does this all imply for companies? Initially enacted to accommodate distant work, companies that aren’t embracing these adjustments threat falling behind, particularly in terms of how they consider productivity. 

Whereas there isn’t a one-size-fits-all strategy to measuring productivity, a larger emphasis on measuring outputs versus inputs aligns with a bigger change that’s underway within the labor market; the need for flexibility. As information employees have been uncovered to the advantages of working remotely, many are not keen to return to the workplace.

The Nice Resignation is one piece of proof that helps this. With give up charges already at traditionally excessive ranges, an extra 17% of employees who’re at the moment distant are contemplating leaving their jobs in the event that they should return to an workplace. These professionals are balking on the prospect of returning to hour-long commutes, having bosses always trying over their shoulders, and sliding again into the times of inflexible, 9-to-5 schedules.

Concurrently, companies are going through the gradual realization that these information employees that want extra flexibility, are the identical ones who’ve bargaining energy within the labor market. Lengthy gone are the times of doing simply what’s greatest for administration. However reasonably, as companies face the stress of attracting and retaining expertise, they may more and more have to ask in regards to the needs and wishes of the professionals that they’re struggling to rent and retain. This demand for flexibility might be an inevitable piece of the hiring puzzle. Companies which might be adopting a mindset that emphasizes and rewards outputs over inputs might be higher positioned for this changed manner of labor. 

General, this tumultuous interval for companies has led to new methods of working and new methods of measuring success. The pandemic shattered long-standing greatest practices and rules for profitable administration and professionals had been eager to those new methods. Even after we are capable of put the pandemic in our rearview mirrors, companies ought to proceed to embrace these administration adjustments. Focus extra on the amount, the standard, and timeliness of the work as a substitute of the period of time somebody spends sitting at a desk. 


Adam Ozimek, PhD is the chief economist at Upwork, the place he leads analysis on labor market developments.