Tools to measure employee productivity aren’t meeting organizations’ needs, according to a study by the Canadian Financial Executives Research Foundation.
While many organizations track productivity by measuring vacation days (86 per cent) and attendance (71 per cent), just 10 per cent of senior financial executives say those tools are fully meeting their needs. The researchers suggest the gap reflects a misalignment between finance and human resources departments.
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“Many people don’t realize how involved finance departments are in a business’ HR functions, both in a day-to-day capacity as well as strategically,” said Russ Wong, chief financial officer at ADP Canada Co., which sponsored the study. “The two departments can and should lean on one another to determine the key performance indicators that have value to improving productivity and engagement and use their company’s available data to strengthen their business.”
The study also found most businesses define productivity through profits, whether by sales generated per employee (46 per cent), percentage of revenue allocated to compensation (23 per cent), operating expenses per full-time employee (22 per cent) and, in the manufacturing industry, units produced per worker (22 per cent).
“HR is often understood to be the softer side of managing a business,” said Wong. “But these professionals can certainly benefit from a strong relationship with the finance department, who better understand how to extract value from data. Strong metrics lead to better analysis, which in turn leads to both a more productive and engaged workforce and a better bottom line.”
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