GSA Enterprise Transformation

Knowledge Worker Productivity: challenges, issues, solutions

June 2011

Knowledge Worker Productivity: challenges, issues, solutions

Background • knowledge workers need to be committed to and enjoy their jobs.1

Knowledge workers are those employees who In all organizations knowledge workers are a have responsibility for exploring and large category of workers that continues to generating ideas and concepts rather than grow. They are also the most expensive concentrating solely on implementing or workers in organizations and they are managing existing processes or operations essential to realizing the business strategies of within the organization. The original the organization. As an example, the General ‘prototype’ used by Peter Drucker when he Services Administration’s (GSA’s) value created the concept of ‘knowledge worker’ proposition reinforces the last point. As the in the mid 1990s was a MD/PhD graphic below shows, innovation and developing new drugs for a pharmaceutical customer intimacy are two of the three key firm. Generally speaking, knowledge workers platforms of GSA’s business strategy to have high degrees of expertise, education, or support a government that works. All three experience and the primary purpose of their platforms require knowledge workers but jobs involves the creation, distribution or they are particularly critical to the Innovation application of knowledge. Knowledge and Customer Intimacy platforms. workers differ from manual workers because: This assertion is reinforced by a quick glance • knowledge work is less standardized down the list of GSA’s position titles. This and structured suggests that the proportion of knowledge • knowledge workers are used to a workers in the workforce is currently very certain level of autonomy high, and it is likely that further recruitment • before certain ends result it may be of staff will be in the knowledge worker difficult to know whether knowledge workers are working or not category. This high proportion of knowledge workers raises a particular challenge for GSA • knowledge workers basically own their key production mean – brains as, like many organizations, it ramps up

1. Knowledge Work Productivity Measurement: Case Study In A Municipal Administration

1 teleworking in order to, among other things, reduce its corporate real estate (CRE) footprint. Organizations need to be able to both extend teleworking and reduce CRE footprint while maintaining operational excellence.

Challenge

Operational excellence is maintained by high levels of productivity with quality performance. Sadly, it’s a ‘well known fact’ that it is very hard to measure knowledge worker productivity in spite of the fact that it is a critically important thing for any organization to be able to do. Peter Drucker, in 1999, wrote that “Increasingly, the ability of organizations – and not only of businesses backed up by a subjective quantitative – to survive will come to depend on their measure for example customer satisfaction comparative advantage in making the scores. knowledge worker more productive”. It is much less easy to measure productivity But more than ten years later there is little that may have a quantitative output but movement in the research or application which depends on knowledge worker input - field of how to measure knowledge worker a policy paper is a case in point. In this productivity and from there improve it. This instance the process for getting to the policy gap arises partly because knowledge work is paper is not reliably measurable in intangible and difficult to categorize in sub- quantitative terms. It would be difficult to groups and partly because the existing know whether a policy paper that took ten productivity measures and performance weeks to write was ‘better’ that one that took review systems are rooted in ‘machine age’ five weeks to write because the speed of organizations that are much more product writing depends on the skills, knowledge and than service oriented. experience of the writer. In any event, the So, for example, it is easy to quantitatively value of the policy paper is not in the fact measure the number of cookies that are that it was written but in the outcome of its boxed on a production line by a particular use: delivering a policy that is never used is worker, or whether salespeople meet their an output measure of productivity. sales targets, and in many of these instances Delivering a policy that is implemented and the objective quantitative measure can be can be shown to have added value to the organization is an outcome measure.2

2. See Appendix 1 for more on outputs and outcomes.

2 Knowledge worker productivity is best judged a) Are ‘invisible’ workers working? on outcome measures. But here the relationships between time, cost, and quality come into play. Managers worry that they won’t be able to tell Questions arise which are essentially judgment whether an ‘invisible’ worker i.e. one not calls. Is the worker being productive when physically present in front of their eyes, is being he/she interviews 10 people, or could he/she productive. This sometimes results in managers interview 5 people and get the same level of refusing to let their staff telework or they resort quality in the policy paper? Should the time to micro-managing their teleworking staff allowed for writing the paper be 10 weeks or 6 requiring them to ‘report in’ at defined times, months? Can you compare one policy writer’s state exactly what they will be working on, performance to another’s? complete logs of work done or calls made, etc. Looking for organizational best practice in b) How will my manager know measuring knowledge worker productivity does what I’m doing? not yield much. There are surprisingly few studies on measuring productivity in the Conversely teleworkers worry that they cannot administrative knowledge-intensive services of prove value add productivity if the work large public organizations. involves, say researching for an article, or planning a strategy.People used to traditional This challenge of measuring knowledge worker command and control hierarchies feel adrift if productivity (and performance) and the they are given more range and autonomy than questions that arise from the challenge, raise they are used to and lack the skills to feel issues that come into clear focus as organizations comfortable working outside of the defined now grapple with extending, across their office environment. populations, teleworking, mobile working, any associated hoteling,and new ways of delivering c) Will my career suffer if I telework? their missions. But if such measures can be developed they Teleworkers feel they will miss out on would unveil the hidden potential for recognition and career development productivity improvement, help develop ways of opportunities if they are less visible to their productivity improvement, contribute powerful managers than they would be in the office bricks evidence to the business case for teleworking, and mortar environment. Many employees feel, and mitigate anxiety about teleworking. rightly or wrongly, that managers reward and recognize people who they can physically see. They believe that face to face visibility leads to career opportunities – for example details – or Issues recommendations for next steps in the career ladder. Four key issues, related to productivity and performance, are raised as organizations consider d) How will my positional status the prospect of extending teleworking across a be obvious? larger population3:

3. Other issues are raised relating to IT support, home office fit-out, etc. that are not the topic of this paper.

3 Teleworkers are concerned that their positional # 1 Stop viewing the four issues status will not be recognized by something that noted above as specific to equates to an expected symbol of power or teleworking. prestige which, in many organizations, is marked traditionally by ‘personal real estate’, for example a large personal office, or a car-parking spot. Are ‘invisible’ workers working? These four performance and productivity issues Managers who do not have the capability to both individually and collectively build a body of performance manage remote workers are not resistance to teleworking that government likely to have the capability to performance agencies in particular need to provide solutions manage on-site workers. Indeed, as the graphic to if they are to meet the goals set out in the below shows manager effectiveness at President’s Memorandum of June 10, 2010, and performance review delivery is, across the board, the Telework Enhancement Act. rather weak. Managers who manage teleworkers differently from on-site workers (by requiring different Solutions reporting protocols for example) illustrate that lack of capability. An effective manager will There are a number of solutions that need to be manage work flows and people in a fair, activated simultaneously that will address the equitable, and respectful way across diverse issues raised by the challenge. workstyles and locations.

Manager Effectiveness at Performance Review Delivery 40%

32%

22% 21% 20% 14%

Manager Effectiveness 5% 3% 3% ecnaeofPercentage HR Staff Rating 0% Very Ineffective Somewhat Neutral Somewhat Effective Very Ineffective Ineffective Effective Effective

Source: 2011 Performance Management Survey, CLC Human Resources, 2011

4 How will my manager know Positional power, in any event, is not the what I’m doing? only source of power – nor indeed the best source of power to accord status to in a Workers, specifically knowledge workers, knowledge based organization. Status who worry that they cannot prove their value recognition should be tied to business add in a telework setting probably cannot mission delivery and knowledge worker prove it in the office environment either. It productivity gains can be made by according is often an emotional feeling of ‘rightness’ in status to things like the outcomes of their both manager and employee that ‘presentism’ ideas implemented successfully, the increase is a sign of productivity and value. Managers in their customer satisfaction scores, etc. and employees who have regular, meaningful, task related conversations, seek feedback from a range of people and develop informal communication paths regardless of #2 Develop a robust but location are unlikely to have problems with flexible framework for tracking performance and progress. measuring knowledge worker productivity Will my career suffer if I telework? The way university academic staff Career development opportunities result performance and productivity is measured is from an orchestrated and conscious approach frequently cited as a best practice model in to personal development and manager discussions of knowledge worker support that is good practice whether the productivity. Although each university has employee is off-site or on-site. Most developed its own measurement system all organizational policies on career have common characteristics: development do not set out to prejudice one a) They are based on type of worker over another. Encouraging manager/employee agreed outcome people how to develop career paths they are (not output) measures interested in and working with them to b) They are contextually valid – that is, realize these is part of a manager’s people they are informed by what a development repertoire. particular business unit needs in terms of outcomes related to the business goals How will my positional c) They enjoy perceived fairness status be obvious? d) They provide a quantitative basis for Status symbols that are vested in CRE are evaluation and reward of knowledge work not the way of the future. All organizations e) They are customized to provide are trying to reduce their CRE footprint and incentives that individual workers in many organizations (Intel, for example) value hierarchical power is not recognized by f) They apply multidimensional getting a corner office. Space is allocated by measurement to capture productivity work type. i.e. data is captured from a range of

5 sources that simultaneously examine • What time period are we looking at? quantity and quality as well as tangible and intangible aspects in • What are the main inputs you are service provision. This approach also using in your work? How do they enables the combination of help/hinder you subjective and objective measures • What kind of factors you think affect which may not by themselves the process through which you provide information sufficient convert the inputs available into enough). outcomes expected? g) The data captured is both objective • What kinds of things hinder your and subjective productivity? Using these eight characteristics as guidelines • What factors benefit your work? gives organizations the opportunity to • What ways can we measure your develop a scalable and replicable knowledge productivity/outcomes? worker productivity measurement model. A The conversations should then continue on number of data sources already in use could an informal but regular basis with the be captured and integrated for example, objective being to track progress towards the within GSA these include customer service agreed outcome(s). measures, items from the Gallup Q12 survey, 360 feedback through software and so on. #4 Increase manager skills in productivity and #3 Include knowledge workers performance management in the efforts of deciding how to measure their Managers who can give effective feedback on productivity progress and combine with attentive listening to what the employee is saying are skills lacking in many. Organizations that do measure knowledge worker productivity believe that knowledge If productivity is indicators and being workers should be included in the efforts of tracked from a number of sources sensitivity deciding how to measure their productivity – in discussing negative indicators such as and intuitively that seems right. Structured disparities, missed promises, failure to deal conversation between manager and employee with setbacks, and so on becomes a core are commonly used with the conversation required skill. Equally indicators of progress taking place around these types of questions, made, hurdles jumped, decisions taken and use Table 1 as a prompt to formulate so on should not be glossed over – many questions such as: managers feel as uncomfortable praising or • What is the task (or tasks) you are encouraging an employee as they do giving going to work on/are working on? negative feedback. However, manager • What is the outcome your work willing, these skills are learnable. should aim at?

6 Inputs Process Outcomes Organizational: Mission Organization of work Innovations implemented successfully Human capital Division of tasks Quality of product or service Innovation potential Ways decisions are made improved Organizational standards, Clarity of job descriptions Time and/or space gains made practices and routines Teamwork Process efficiencies achieved Information systems Knowledge sharing $$ saved Quality of information Delays and waiting Customer’s expectations available Ability to affect own work fulfilled Access to information Networks and community Time allocation Working environment

Personal: Motivation Job satisfaction Social network Work/life balance Values and culture fit

Table 1

Summary Recommended next steps include:

• Identifying a site to try out a Measuring knowledge worker productivity is productivity measurement system not a straightforward task, but working out • Developing a framework that how to do it using the suggestions in this includes multidimensional measures paper, and then testing the approaches offer tied in some cases to existing measures an opportunity to develop organizational • Working with individual employees performance in several aspects including and managers to tailor the productivity through more motivated staff, framework to their circumstances reduced CRE footprint, improved and then with their support managerial skills, and increased knowledge implementing it management and transfer.

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Appendix 1

Output and outcome An outcome is direct business impact. “Revenue” is a classic outcome measure, but Output: An output is something like outcomes don’t have to be directly tied to “provided 1,000 families in a housing crisis financial results. Growing brand awareness is with one-time emergency financial an outcome measure, as is growing your assistance.” database of marketable contacts. Increasing the number of people who are talking about Outputs are simply things that happened as your brand in a positive manner in the the result of some sort of tactic. For instance, blogosphere is an outcome. the number of impressions for a banner ad campaign is an output of the campaign. Even the number of clickthroughs is an output — in and of itself, there is no Distinction between business value of a clickthrough, but it is outputs and outcomes something that is a direct result of the campaign. The distinction between outputs and outcomes matters for two reasons: Outcome: An outcome is more like • At the end of the day, what really “reduced the number of families who matters to a business are outcomes became homeless due to a financial crisis by — if you’re only measuring outputs, 15% over the previous reporting period.” then you are doing yourself a Does the distinction make sense? The output disservice is what the nonprofit agency did, whereas • Measuring outputs and outcomes can help you determine whether your the outcome is why they did it — what best opportunities for improvement result they were really trying to achieve at the lie with adjusting your strategy or end of the day. with improving your tactics

9 From: Gilligan on Data, get the work done, which is a shift in culture http://www.gilliganondata.com/index.php/2 from permission granting (e.g., granting 009/10/26/measurement-strategies- leave, permission to telework, etc.) to balancing-outcomes-and-outputs/ performance guiding. In FY 2010, OPM evaluated its ROWE pilot and has since extended it for another ROWE year. The evaluation assessed the project’s effect on employee performance and morale. OPM has implemented its Results Oriented As a result, OPM is developing performance Work Environment (ROWE) pilot project. appraisals that are in-line with the goals of ROWE is based on employee management, ROWE and not based on more structured under which employees are given maximum work environments. From OPM Fiscal Year flexibility to schedule their work day, so they 2010, Agency Financial Report can continue making productive http://www.opm.gov/gpra/opmgpra/2010_A contributions to their organizations while FR.pdf also attending to family, pursuing higher education and taking care of other responsibilities. Managers manage for results rather than process. Employees are trusted to

For further information contact: Naomi Stanford Special Advisor EnterpriseTransformation email: [email protected]

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