There is a fundamental but often misunderstood difference between labor productivity and labor performance, says Steve Hopper of The Progress Group. He explains that productivity is a raw statistic often measured in units per hour, while performance is measured as a percentage of what an average worker would accomplish.

Performance is a fairer way to measure workers, he says. "For example, think about measuring the productivity of two people working on an order-picking line who were supposed to pick 220 lines per hour. If one is picking anvils and the other is picking feather pillows, it is not a fair comparison. But when we set up a standard based on the content of the work, the worker can be measured more fairly." Having a fairer form of worker measurement makes for a better work environment and happier employees, he says. "Workers thrive in an environment where they feel they are being measured fairly and accurately and where they are rewarded and empowered to do their jobs."

Hopper says there are three factors that determine the performance of a worker: the method, technique and tools that a worker uses to perform a function; the pace at which he works; and time utilization, or the amount of time actually working vs. engaged in other activities. Companies wishing to improve labor performance need to address all three, but remedies do not have to be expensive or complex, he says.

"Often companies don't take the time to evaluate how a worker is going about a task," he says. "Sometimes simple, little changes can improve a worker's method at little or no cost." Using industrial engineering or crowd engineering techniques can improve elements of the job without investing in software or systems, he says. "It's about finding the smartest way to perform a job."

Better training, proper incentives and labor management systems can all help, he says. "But the very best thing a business can do is talk to and spend time with their associates. Don't sit in an ivory tower. Ask the associate what is the right way to do the job and what tools and techniques will make them more effective."

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