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Measure Output on Productivity and Results, Not Time and Place

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Measure Output on Productivity and Results, Not Time and Place

Hold employees accountable for their ideas and results, not the time they log in front of a desk. Not a single study suggests that working in an office eight hours a day, five days a week maximizes employee productivity, satisfaction, or performance.

Not a single study suggests that working in an office eight hours a day, five days a week maximizes employee productivity, satisfaction, or performance. In fact, any data that exists on working life in an office reveals that most employees aren’t engaged, waste a lot of time in the office not working, and that underperformance is a persistent problem.

The gig economy transforms the way we work by disconnecting work from an office. Independent consultants, contractors, and freelancers are judged by their results, output, and productivity—no matter how, where, or when they are produced—not on the time they spend in their office chair, or whether they work from nine to five every day.

Study after study after study of remote workers have consistently demonstrated that they are happier and more productive than their office-bound colleagues. Recent surveys of 8,000 workers by the McKinsey Global Institute and nearly 900 independent workers by Future Workplace and Field Nation find that those workers, freed from the constraints of office life, are more satisfied and more productive.

Somehow—despite compelling empirical evidence to the contrary—our office-based, five-day-workweek, time-in-the-cube approach to work persists.

The most impactful lesson that companies can learn from the gig economy is to judge workers based on their work—their results, and their output—not on when and where they do that work.

Tracking employee time and location made sense when many jobs were time and place dependent. Factory workers, manual laborers, or workers in retail stores, restaurants, or hospitals have to be at their place of work at specific times to reach productivity goals. If your job is to be a salesperson at a retail store, you have to be there to sell to customers when the store is open.

There are still jobs in our economy that require a particular time and place to get the job done, but few of them are corporate jobs. Despite that, most companies invest significant resources into tracking and managing employee time and location, with little to show for the effort or cost of doing so.

The problem with the current corporate method of tracking employee time and place is just that: that it tracks time and place, which means it fails to measure what matters to a company’s financial and business performance: output and results.

Ideas and results are the true value that workers bring to their employers, not time and presence. Companies must start to measure what matters.

Sitting in a cube or a conference room attending endless, poorly-run meetings is probably not how your company’s strategic or product issues are best solved. It might not even be the most effective way to create your marketing message, manage your back office, or maintain secure information systems.

Our greatest insights and most productive work are often generated outside the constraints of the corporate workweek and the office. We have stories in our history of scientists stumbling across great discoveries sitting under trees.

The primary obstacle to managing output, results, and productivity is existing corporate culture. Most managers enjoy working at a company in which employees are managed by time and place. After all, it’s pretty easy to see who is at their desk.

It’s much harder to develop, measure, and track the specific value, deliverables, and output each employee should produce. Managers will have to work a lot harder under a system that focuses on tracking results.

The rewards are great for companies that can overcome those obstacles: more productive, efficient, and satisfied workers, better management, a healthier corporate culture based more explicitly on merit, and lower real estate and facilities costs as workers move away from an office-based work schedule.

In the gig economy, productivity-guided independent work is awarded, managed, and paid for based on specific deliverables and output. Workers are free to determine when, where, how, and how much they need to work to deliver specific objectives.

It doesn’t matter if the idea for how to solve a problem or the insight for a key deliverable is generated while showering, in yoga class, or sitting at a desk. The gig economy employer judges and values the quality and timeliness of deliverables, not the process by which they are created.

Labor is the most expensive and valuable resource at most firms. Managing that resource by time and place is a crude, empirically unproven, inefficient, and costly approach that fails to measure what really matters: results.

The biggest lesson that companies can learn from the gig economy is to manage and measure employees based on what they produce and deliver and solve, not the hours they spend in an office. Most simply, companies need to stop measuring what doesn’t matter, and start measuring what does.

Diane Mulcahy is the author of The Gig Economy: The Complete Guide to Getting Better Work, Taking More Time Off And Financing The Life You Want. The MBA course on the gig economy she created was named one of the Top 10 Most Innovative Business School Classes in the country by Forbes. Diane is a Senior Fellow at the Ewing Marion Kauffman Foundation. Her articles and work have been featured in outlets including The Harvard Business Review, The Huffington Post, The Economist, the New Yorker, Forbes, Fortune, The New York Times and The Wall Street Journal. Learn more about Diane at www.dianemulcahy.com

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