Canadian HR Reporter

CANADIAN HR REPORTER NOVEMBER 2018 NEWS 13 JOINT VENTURE BY: Accurately measuring employee productivity Total Health Index scale provides baseline that can be measured year over year BY BILL HOWATT TOTAL HE ALTH INDEX THI research has provided Morneau Shepell with a frame- work for measuring employee productivity error, which defi nes the percentage of hours the aver- age employee is fully engaged and productive. is information gives senior leaders a baseline for both the fi nancial cost of lost time (for ex- ample, sick time, discretionary eff ort and presenteeism) and lost productivity opportunity. Even a three per cent increase in full- time equivalent (FTE) productiv- ity can be positive for enhancing fi nancial results. The THI productivity scale provides a baseline that can be measured year over year, like an engagement scale. e produc- tivity scale's effi cacy and predic- tive analytics capability can be improved when integrated with historical data such as: human resources information system (HRIS) documented days, short- and long-term disability time, and workers' compensation days. In 2017, the Organisation for Economic Co-operation and De- velopment reported the average time worked per year by Canadian employees (full-time, part-time, part-year, including overtime) was 1,695 hours. However, senior leadership cannot accurately measure em- ployee productivity by simply measuring the number of hours the average employee works per week. is metric by itself is in- complete. An organization's pro- ductivity can be defi ned by the total number of hours employees are willing and able to work to meet organizational expectations. To do this with any accuracy, senior leadership requires an ac- curate baseline on three metrics: attendance, discretionary eff ort and presenteeism: Attendance: Factors such as illness, family issues and mental health are a few examples of why a person takes time off work. Typi- cally, these are covered under pay (such as a sick day bank, short- and long-term disability time and workers' compensation claims) or leave without pay. Discretionary eff ort: is is the amount of eff ort an employee willingly gives on a daily basis that goes above and beyond the mini- mal expectations for her assigned role. For example, if the average FTE at a 1,000-employee organi- zation puts forth 80 per cent of her best eff ort daily, the other 20 per cent may not be productive. is suggests it is possible that up to 200 FTEs are not producing any tangible or measurable results. In this example, even a two per cent improvement in the average FTE's discretionary eff ort could equal up to 20 more FTEs working to achieve measurable results. Presenteeism: is can sim- ply be defi ned as when an em- ployee reports to work feeling unwell. e root cause can vary, from physical illness to mental ill- ness, boredom, fear of bullying or chronic pain. Suppose that Company ABC's workforce planning schedule for its 1,000 employees means each employee is scheduled to work 37.5 hours per week for 48 weeks, 1,800 hours per year. Senior lead- ers who don't have a lens to ac- curately measure the above three variables can't accurately measure the organization's employee pro- ductivity error. THI productivity research has found that 53 per cent of employ- ees fall in the favourable bucket, 33 per cent in the neutral bucket, and 24 per cent in the unfavour- able bucket. is means 57 per cent of employees' productivity scores are not optimal. A profi table business that's un- aware of its employee productiv- ity error could very well be pro- ducing good results that are still below its potential and are leaving money on the table. is suggests that a profi t-and-loss statement (P&L) is not the only metric that can predict an organization's po- tential to sustain revenue or grow. To positively infl uence employ- ee productivity error, leaders must be aware of the diff erent kinds of levers involved, as seen in the above table. Employees report- ing higher THI scores also have higher scores in multiple areas. ese higher areas are levers that can positively or negatively aff ect employee productivity. THI research continues to re- inforce the theme that without health, there's no chance to maxi- mize employee engagement, and without engagement, there's no chance to maximize productivity. Coaching for HR Here are some ways HR lead- ers can influence employee productivity: Add employee productivity error to the HR scorecard: If you can't defi ne, observe or measure it, it's diffi cult to make decisions to improve employee productiv- ity. One starting place is to obtain an employee productivity error for the organization as a baseline metric (for example, 27 per cent). Using tools like THI or the Em- ployee Recommended Workplace Award (www.employeerecom- mended.com) allows an orga- nization to obtain an evidence- based baseline for analyzing any relationships between HR metrics and fi nancial metrics. is provides a model to start to predict the tangible dollar impact the organization can obtain by im- proving its employee productivity error score (for example, benefi t for moving from 27 per cent to 24 per cent). e employee produc- tivity error metric can be used to evaluate how diff erent initiatives such as policies, procedures and programs influence employee productivity error scores year over year. Get CFO buy-in: Typically, when an organization's CFO un- derstands the math behind an employee productivity error pro- ductivity metric, and the link be- tween that and dollars, he wants to work with HR to fi gure out how to lower fi nancial risk and maxi- mize productivity. Because CFOs, CEOs and boards (both for profi t and non-profit) are constantly looking for variables that predict how an organization can achieve its fi nancial results, having a met- ric that can support this eff ort can help to shape the business case for investing in employees to improve employee productivity error scores. Bill Howatt, Ph.D., Ed.D., is the Toronto-based chief of research and development, workforce pro- ductivity, at Morneau Shepell. For more information and educa- tion about the company's Total Health Index (THI), please visit www. morneaushepell.com. 12-PART SERIES This is the 10th of a 12- part series on total health that will explore the links between employees' health, engagement and productivity: 1. The total health framework 2. The 4 pillars of the Total Health Index 3. Senior leadership 4. Resiliency 5. Alcohol consumption 6. A respectful workplace 7. Manager effectiveness 8. Financial health 9. Going beyond traditional engagement 10. Productivity 11. Mental health 12. Physical activity, nutrition, sleep Factors predicting employee productivity 75% 76% 78% 74% 77% 69% 75% 72% 76% 68% 68% 71% 67% 71% 62% 67% 66% 70% 61% 60% 64% 63% 57% 56% 60% 61% 65% THI Productivity Index scale Favourable Neutral Unfavourable Culture Scale Management Effectiveness Scale Psychological Protection Scale Psychological Competency for Role Scale Respectful Workplace Scale Work Demand Scale Engagement Scale Trust Scale Total Health Score By registering, you'll get a unique perspective on the health of your workplace. The Employee Recommended Workplace Award looks at all four components of total health – physical, mental, work and life – and their impact on engagement and productivity. When you register, you'll receive: • The Employee Recommended Workplace Survey for your employees • An aggregated report that identifies your organization's strengths and areas for improvement • Actionable insights into improving the total health of your employees • A chance to be named an Employee Recommended Workplace! You've worked hard to build a healthy workplace. Get recognized for it! Register your company today! Visit employeerecommended.com for details. Registration ends November 22, 2018. M O R N E A U S H E P E L L T H E G L O B E A N D M A I L 20 19 Employee Recommended Workplace The Employee Recommended Workplace Award, developed by Morneau Shepell and the Globe and Mail, recognizes excellence in achieving a healthy, engaged and productive workforce. It is the only award of its kind that is based entirely on feedback from employees. Why register for the Employee Recommended Workplace Award?

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