It's Time to Ditch Productivity Vanity Metrics

The concept of productivity is far more ambiguous (and subjective) than it seems. In today’s complex economy, even nailing down what productivity means_,_ let alone measuring it, is challenging.

This leads many organizations to measure productivity with simplistic, reductive metrics. These ‘vanity metrics’ focus on the quantity of work getting done, rather than the value that work generates.

These metrics don’t work in a sophisticated, rapidly evolving labor market. In fact, our entire paradigm for approaching productivity needs to change. Luckily, there are clear ways to improve productivity—and measure it. 

The challenge of measuring productivity in 2023

Employers have heard it a million times. Organizations are ‘doing more with less,’ facing ‘unprecedented challenges,’ and figuring out the ‘future of work.’

Many companies feel like they’re in a productivity emergency. They need to understand what kind of results they’re getting from the hard work—and financial resources—they invest.

Their concerns are valid. Research from Deloitte shows that in all Western nations, productivity has declined since the post WWII-technology boom. Shockingly, today’s productivity growth has slowed to a level not seen since the late 1800s.

It’s true that this is a time of great change. But even though work looks different now, productivity has always been tricky to quantify. As far back as 1988, Harvard Business Review was advising managers on how to measure it. Even then, it was more complicated than direct labor costs. 

How is productivity usually measured?

According to that same HBR piece, the basic productivity equation is:

productivity = units of output / units of input

For example, Honda could divide how many finished Civics it releases in a month, by how many hours of staff labor were spent on them over that same time period.

This definition of productivity came into use around the Industrial Revolution. Developed economies were centered around producing physical goods. With new, advanced machinery, we could pump out more of them than ever before.

But in modern economies, work itself has changed. Today’s business world is highly dependent on knowledge work and complex, intangible products like software. These things are harder to measure.

In days of yore, it was possible to just keep a factory open five hours longer, and expect to produce 500 more sewing machines.

That doesn’t work when the end product is, say, a more intuitive software interface. The factory, in this case, is people. While they are using tools to work, their skills and ideas are what’s creating results. 

The leader-employee productivity disconnect

The old methods for measuring productivity don’t work anymore. But businesses still need to understand how effectively they’re operating. They need to know those dollars of wages and hours of labor are actually getting them somewhere.

All too often, leadership focuses on outputs and inputs. By doubling down on how much their employees put in, they think they’re setting themselves up for better results. However, measuring the quantity of inputs has never been as effective as measuring the quality of a team’s outputs and the overall value they deliver.

It’s no wonder employees feel nervous when they hear that higher-ups want to ‘max out productivity.’ They’re actually asking for longer hours, weekend emails, and pressure never to be seen offline.

But as anyone who’s held a (virtual) office job knows, it doesn’t really work like that. Those constant emails and messages are focus-destroyers, and if people are still online at 6 pm on a Friday, nothing worthwhile is getting done.

What are productivity vanity metrics, and why are they harmful?

Vanity metrics are exactly what they sound like. They look good, but there’s no substance.

Vanity metrics exist in all fields. For example, a social media team may be creating daily posts to various channels, but only a small number of people engage with the posts.

There’s no complete, hard and fast list of productivity vanity metrics. Anything that doesn’t tell the whole story or makes a company look like it’s doing more than it is, is a likely culprit.

Generally, productivity vanity metrics measure workers’ visibility and activity—their inputs. That might look like stipulated overtime hours or mandates that require people to be back in the office a certain number of days a week.

Or, they might measure outputs—how many units of product came from their work. A team might boast they published 10 blog posts or fixed 12 software bugs in a week. But were those tasks impactful? Did any qualified leads come in organically through one of those blog posts? Did CSAT go up thanks to all 12 of those handled bugs?

Worthwhile productivity improves the product, the brand, or how customers experience it. But productivity vanity metrics just focus on quantity. They measure how much people work, or how much they’re producing—as if they’re steam engines, pumping out car parts; they ignore the actual value of those results.

Improve productivity, no vanity required

It’s time to skip the surface-level metrics. The reality is that modern productivity shouldn’t measure outputs or inputs. It should be focused on outcomes entirely, and let individuals and teams decide how they’ll make them happen.

Productivity should mean an organization is making meaningful progress. That it’s improving its offerings, evolving in a positive way, or reaching its most important goals.

That might sound vague, aspirational, or hard to measure. But there are proven methods to create the conditions that lead to productivity — and rigorous frameworks for tracking outcomes.

Here are some ways to approach productivity through a modern, holistic lens. 

Track outcomes, not productivity

This is the crux of the new productivity paradigm. Companies should be striving for effectiveness, not efficiency. Instead of doing as much as possible, they should be doing the things that matter_._

Deloitte suggests using outcome-based metrics, such as “increase web traffic by X%,”  that capture the “value, quality, or desired result of work.”

Consider quarterly or annual OKR planning and KPI goal-setting. While these frameworks aren’t typical ‘productivity metrics,’ they’re undeniably powerful tools to track outcomes and easily see they ladder up to larger company initiatives.

This model empowers teams to freely innovate and decide how best to allocate resources to achieve outcomes. Beyond the obvious focus on actual business value, the result is a much more fulfilling work experience than the ‘hamster wheel’ feeling of logging as many hours as possible.

Set a clear definition of productivity and offer tools to deliver on it

If they want ‘productivity,’ leaders need to be clear about the outcomes they’re looking for. If they don’t understand what they’re working towards, employees will feel constant, misplaced anxiety.

If all an employee hears is that their employer wants ‘more,’ that’s a recipe for feeling as if they’re never doing enough.

“Leaders who want to increase productivity…must first define it for their teams, clarify how they plan to measure it, [and] provide the right tools to enable it,” says Jim Bartolomea, Senior Vice President of People at ClickUp.

Even more importantly, employers must offer people new tools and resources if they want them to be more productive. “Once this framework is established, it’s critical to establish an incentivization system to maintain motivation,” continues Bartolomea. “If leaders follow these steps, not only will business improve, but morale should, too.”

Otherwise, the implication is that all employers want is greater input: that employees spend more time at work or work faster and faster while they’re there. Again, that might work for robots, but it’s not effective for human beings.

Take employee autonomy and flexibility seriously

The solution is to focus on outcomes. But it’s just as crucial that employers release control of what employees are putting in.

Autonomy and transparency are the cornerstones of this new world of work. The rise of remote work has shown us that people can accomplish incredible things without supervision. That sense of self-determination is powerful—enough that 67% of hybrid workers say they’d take a pay cut to keep control of their work environment.

This model is most commonly associated with remote, or hybrid, workplaces. But true flexibility is about more than just location. It’s about letting people decide when, where, and how they work best—a level of autonomy that 87% of people will take if it's offered, according to McKinsey.

When employers emphasize autonomy, they’re demonstrating trust. They are proving that outcomes really are their greatest priority. 

Prioritize company culture

Happy people are more productive. It sounds so obvious—yet dated management styles focused on discipline and eeking out more and more units of work from their people prove it’s not always the norm.

Offering autonomy and looking for people who are naturally self-determined are just two ways to make people happier at work. But just as important is a strong organizational culture built on shared values that drive every level of operations.

Company culture should inform your business goals, but also how you work together to achieve them. Put it into action with programs, established processes, and policies—if your values are just empty words, they’re actively harmful.

A thriving, action-oriented, values-based culture helps people feel safe and respected by their organization. These are the prime conditions for productivity.

Are your metrics in vain? 

Vanity metrics are all about context. The same figure could be useful in one scenario, but misleading in another.

Even an obviously quantity-focused metric, like hours worked, could show true productivity in the right context. If a team worked fewer hours but surpassed key OKRs, that would be a clear win for productivity.

To unpack whether productivity metrics are useful, teams should discuss in-depth what really should be tracked based on what really leads to outcomes. Keep the discussion focused with guided prompts. Together, teams can unpack what function their productivity metrics are serving, and whether they’re getting the organization closer to its goals. 

This vanity metric test, from Amplitude, is a great place to start. To learn more, check out our new eBook, 4 Proven Pathways to Productivity.