GSA Enterprise Transformation

Knowledge WorkerProductivity:

challenges, issues, solutions

June 2011

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Knowledge Worker Productivity:challenges, issues, solutions

Background

Knowledge workers are those employees whohave responsibility for exploring andgenerating ideas and concepts rather thanconcentrating solely on implementing ormanaging existing processes or operationswithin the organization. The original‘prototype’ used by Peter Drucker when hecreated the concept of ‘knowledge worker’in the mid 1990s was a MD/PhDdeveloping new drugs for a pharmaceuticalfirm. Generally speaking, knowledge workershave high degrees of expertise, education, orexperience and the primary purpose of theirjobs involves the creation, distribution orapplication of knowledge. Knowledgeworkers differ from manual workers because:

• knowledge work is less standardizedand structured

• knowledge workers are used to acertain level of autonomy

• before certain ends result it may bedifficult to know whether knowledgeworkers are working or not

• knowledge workers basically owntheir key production mean – brains

• knowledge workers need to becommitted to and enjoy their jobs.1

In all organizations knowledge workers are alarge category of workers that continues togrow. They are also the most expensiveworkers in organizations and they areessential to realizing the business strategies ofthe organization. As an example, the GeneralServices Administration’s (GSA’s) valueproposition reinforces the last point. As thegraphic below shows, innovation andcustomer intimacy are two of the three keyplatforms of GSA’s business strategy tosupport a government that works. All threeplatforms require knowledge workers butthey are particularly critical to the Innovationand Customer Intimacy platforms.

This assertion is reinforced by a quick glancedown the list of GSA’s position titles. Thissuggests that the proportion of knowledgeworkers in the workforce is currently veryhigh, and it is likely that further recruitmentof staff will be in the knowledge workercategory. This high proportion of knowledgeworkers raises a particular challenge for GSAas, like many organizations, it ramps up

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

teleworking in order to, among other things,reduce its corporate real estate (CRE)footprint. Organizations need to be able toboth extend teleworking and reduce CREfootprint while maintaining operationalexcellence.

Challenge

Operational excellence is maintained by highlevels of productivity with qualityperformance. Sadly, it’s a ‘well known fact’that it is very hard to measure knowledgeworker productivity in spite of the fact that itis a critically important thing for anyorganization to be able to do. Peter Drucker,in 1999, wrote that “Increasingly, the abilityof organizations – and not only of businesses– to survive will come to depend on theircomparative advantage in making theknowledge worker more productive”.

But more than ten years later there is littlemovement in the research or applicationfield of how to measure knowledge workerproductivity and from there improve it. Thisgap arises partly because knowledge work isintangible and difficult to categorize in sub-groups and partly because the existingproductivity measures and performancereview systems are rooted in ‘machine age’organizations that are much more productthan service oriented.

So, for example, it is easy to quantitativelymeasure the number of cookies that areboxed on a production line by a particularworker, or whether salespeople meet theirsales targets, and in many of these instancesthe objective quantitative measure can be

backed up by a subjective quantitativemeasure for example customer satisfactionscores.

It is much less easy to measure productivitythat may have a quantitative output butwhich depends on knowledge worker input -a policy paper is a case in point. In thisinstance the process for getting to the policypaper is not reliably measurable inquantitative terms. It would be difficult toknow whether a policy paper that took tenweeks to write was ‘better’ that one that tookfive weeks to write because the speed ofwriting depends on the skills, knowledge andexperience of the writer. In any event, thevalue of the policy paper is not in the factthat it was written but in the outcome of itsuse: delivering a policy that is never used isan output measure of productivity.Delivering a policy that is implemented andcan be shown to have added value to theorganization is an outcome measure.2

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

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Knowledge worker productivity is best judgedon outcome measures. But here the relationshipsbetween time, cost, and quality come into play.Questions arise which are essentially judgmentcalls. Is the worker being productive whenhe/she interviews 10 people, or could he/sheinterview 5 people and get the same level ofquality in the policy paper? Should the timeallowed for writing the paper be 10 weeks or 6months? Can you compare one policy writer’sperformance to another’s?

Looking for organizational best practice inmeasuring knowledge worker productivity doesnot yield much. There are surprisingly fewstudies on measuring productivity in theadministrative knowledge-intensive services oflarge public organizations.

This challenge of measuring knowledge workerproductivity (and performance) and thequestions that arise from the challenge, raiseissues that come into clear focus as organizationsnow grapple with extending, across theirpopulations, teleworking, mobile working, anyassociated hoteling,and new ways of deliveringtheir missions.

But if such measures can be developed theywould unveil the hidden potential forproductivity improvement, help develop ways ofproductivity improvement, contribute powerfulevidence to the business case for teleworking,and mitigate anxiety about teleworking.

Issues

Four key issues, related to productivity andperformance, are raised as organizations considerthe prospect of extending teleworking across alarger population3:

a) Are ‘invisible’ workers working?

Managers worry that they won’t be able to tellwhether an ‘invisible’ worker i.e. one notphysically present in front of their eyes, is beingproductive. This sometimes results in managersrefusing to let their staff telework or they resortto micro-managing their teleworking staffrequiring them to ‘report in’ at defined times,state exactly what they will be working on,complete logs of work done or calls made, etc.

b) How will my manager know what I’m doing?

Conversely teleworkers worry that they cannotprove value add productivity if the workinvolves, say researching for an article, orplanning a strategy. People used to traditionalcommand and control hierarchies feel adrift ifthey are given more range and autonomy thanthey are used to and lack the skills to feelcomfortable working outside of the definedoffice environment.

c) Will my career suffer if I telework?

Teleworkers feel they will miss out onrecognition and career developmentopportunities if they are less visible to theirmanagers than they would be in the office bricksand mortar environment. Many employees feel,rightly or wrongly, that managers reward andrecognize people who they can physically see.They believe that face to face visibility leads tocareer opportunities – for example details – orrecommendations for next steps in the careerladder.

d) How will my positional status be obvious?

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

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Teleworkers are concerned that their positionalstatus will not be recognized by something thatequates to an expected symbol of power orprestige which, in many organizations, is markedtraditionally by ‘personal real estate’, for examplea large personal office, or a car-parking spot.

These four performance and productivity issuesboth individually and collectively build a body ofresistance to teleworking that governmentagencies in particular need to provide solutionsto if they are to meet the goals set out in thePresident’s Memorandum of June 10, 2010, andthe Telework Enhancement Act.

Solutions

There are a number of solutions that need to beactivated simultaneously that will address theissues raised by the challenge.

# 1 Stop viewing the four issues noted above as specific to teleworking.

Are ‘invisible’ workers working?

Managers who do not have the capability toperformance manage remote workers are notlikely to have the capability to performancemanage on-site workers. Indeed, as the graphicbelow shows manager effectiveness atperformance review delivery is, across the board,rather weak.

Managers who manage teleworkers differentlyfrom on-site workers (by requiring differentreporting protocols for example) illustrate thatlack of capability. An effective manager willmanage work flows and people in a fair,equitable, and respectful way across diverseworkstyles and locations.

Manager Effectiveness at Performance Review Delivery

Per

cent

age

ofH

RS

taff

Rat

ing

Man

ager

Effe

ctiv

enes

s

VeryIneffective

Ineffective SomewhatIneffective

Neutral SomewhatEffective

Effective VeryEffective

3%

21%

32%

14%

22%

5%3%

20%

40%

0%

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

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How will my manager know what I’m doing?

Workers, specifically knowledge workers,who worry that they cannot prove their valueadd in a telework setting probably cannotprove it in the office environment either. Itis often an emotional feeling of ‘rightness’ inboth manager and employee that ‘presentism’is a sign of productivity and value. Managersand employees who have regular,meaningful, task related conversations, seekfeedback from a range of people and developinformal communication paths regardless oflocation are unlikely to have problems withtracking performance and progress.

Will my career suffer if I telework?

Career development opportunities resultfrom an orchestrated and conscious approachto personal development and managersupport that is good practice whether theemployee is off-site or on-site. Mostorganizational policies on careerdevelopment do not set out to prejudice onetype of worker over another. Encouragingpeople how to develop career paths they areinterested in and working with them torealize these is part of a manager’s peopledevelopment repertoire.

How will my positional status be obvious?

Status symbols that are vested in CRE arenot the way of the future. All organizationsare trying to reduce their CRE footprint andin many organizations (Intel, for example)hierarchical power is not recognized bygetting a corner office. Space is allocated bywork type.

Positional power, in any event, is not theonly source of power – nor indeed the bestsource of power to accord status to in aknowledge based organization. Statusrecognition should be tied to businessmission delivery and knowledge workerproductivity gains can be made by accordingstatus to things like the outcomes of theirideas implemented successfully, the increasein their customer satisfaction scores, etc.

#2 Develop a robust but flexible framework for measuring knowledge worker productivity

The way university academic staffperformance and productivity is measured isfrequently cited as a best practice model indiscussions of knowledge workerproductivity. Although each university hasdeveloped its own measurement system allhave common characteristics:

a) They are based onmanager/employee agreed outcome(not output) measures

b) They are contextually valid – that is,they are informed by what aparticular business unit needs interms of outcomes related to thebusiness goals

c) They enjoy perceived fairness

d) They provide a quantitative basis forevaluation and reward of knowledgework

e) They are customized to provideincentives that individual workersvalue

f) They apply multidimensionalmeasurement to capture productivityi.e. data is captured from a range of

sources that simultaneously examinequantity and quality as well astangible and intangible aspects inservice provision. This approach alsoenables the combination ofsubjective and objective measureswhich may not by themselvesprovide information sufficientenough).

g) The data captured is both objectiveand subjective

Using these eight characteristics as guidelinesgives organizations the opportunity todevelop a scalable and replicable knowledgeworker productivity measurement model. Anumber of data sources already in use couldbe captured and integrated for example,within GSA these include customer servicemeasures, items from the Gallup Q12survey, 360 feedback through software andso on.

#3 Include knowledge workers in the efforts of deciding how to measure their productivity

Organizations that do measure knowledgeworker productivity believe that knowledgeworkers should be included in the efforts ofdeciding how to measure their productivity –and intuitively that seems right. Structuredconversation between manager and employeeare commonly used with the conversationtaking place around these types of questions,use Table 1 as a prompt to formulatequestions such as:

• What is the task (or tasks) you aregoing to work on/are working on?

• What is the outcome your workshould aim at?

• What time period are we looking at?

• What are the main inputs you areusing in your work? How do theyhelp/hinder you

• What kind of factors you think affectthe process through which youconvert the inputs available intooutcomes expected?

• What kinds of things hinder yourproductivity?

• What factors benefit your work?

• What ways can we measure yourproductivity/outcomes?

The conversations should then continue onan informal but regular basis with theobjective being to track progress towards theagreed outcome(s).

#4 Increase manager skills in productivity and performance management

Managers who can give effective feedback onprogress and combine with attentive listeningto what the employee is saying are skillslacking in many.

If productivity is indicators and beingtracked from a number of sources sensitivityin discussing negative indicators such asdisparities, missed promises, failure to dealwith setbacks, and so on becomes a corerequired skill. Equally indicators of progressmade, hurdles jumped, decisions taken andso on should not be glossed over – manymanagers feel as uncomfortable praising orencouraging an employee as they do givingnegative feedback. However, managerwilling, these skills are learnable.

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Summary

Measuring knowledge worker productivity isnot a straightforward task, but working outhow to do it using the suggestions in thispaper, and then testing the approaches offeran opportunity to develop organizationalperformance in several aspects includingproductivity through more motivated staff,reduced CRE footprint, improvedmanagerial skills, and increased knowledgemanagement and transfer.

Recommended next steps include:

• Identifying a site to try out aproductivity measurement system

• Developing a framework thatincludes multidimensional measurestied in some cases to existingmeasures

• Working with individual employeesand managers to tailor theframework to their circumstancesand then with their supportimplementing it

Inputs Process Outcomes

Organizational:

MissionHuman capital Innovation potential Organizational standards,practices and routines Information systems Quality of informationavailableAccess to informationNetworks and communityTime allocation Working environment

Organization of work Division of tasks Ways decisions are made Clarity of job descriptions Teamwork Knowledge sharing Delays and waiting Ability to affect own work

Innovations implementedsuccessfullyQuality of product or serviceimprovedTime and/or space gains madeProcess efficiencies achieved $$ savedCustomer’s expectationsfulfilled

Personal:

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

Table 1

Output and outcome

Output: An output is something like“provided 1,000 families in a housing crisiswith one-time emergency financialassistance.”

Outputs are simply things that happened asthe result of some sort of tactic. For instance,the number of impressions for a banner adcampaign is an output of the campaign.Even the number of clickthroughs is anoutput — in and of itself, there is nobusiness value of a clickthrough, but it issomething that is a direct result of thecampaign.

Outcome: An outcome is more like“reduced the number of families whobecame homeless due to a financial crisis by15% over the previous reporting period.”Does the distinction make sense? The outputis what the nonprofit agency did, whereasthe outcome is why they did it — whatresult they were really trying to achieve at theend of the day.

An outcome is direct business impact.“Revenue” is a classic outcome measure, butoutcomes don’t have to be directly tied tofinancial results. Growing brand awareness isan outcome measure, as is growing yourdatabase of marketable contacts. Increasingthe number of people who are talking aboutyour brand in a positive manner in theblogosphere is an outcome.

Distinction between outputs and outcomes

The distinction between outputs andoutcomes matters for two reasons:

• At the end of the day, what reallymatters to a business are outcomes— if you’re only measuring outputs,then you are doing yourself adisservice

• Measuring outputs and outcomescan help you determine whether yourbest opportunities for improvementlie with adjusting your strategy orwith improving your tactics

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Appendix 1

From: Gilligan on Data,http://www.gilliganondata.com/index.php/2009/10/26/measurement-strategies-balancing-outcomes-and-outputs/

ROWE

OPM has implemented its Results OrientedWork Environment (ROWE) pilot project.ROWE is based on employee management,under which employees are given maximumflexibility to schedule their work day, so theycan continue making productivecontributions to their organizations whilealso attending to family, pursuing highereducation and taking care of otherresponsibilities. Managers manage for resultsrather than process. Employees are trusted to

get the work done, which is a shift in culturefrom permission granting (e.g., grantingleave, permission to telework, etc.) toperformance guiding.

In FY 2010, OPM evaluated its ROWEpilot and has since extended it for anotheryear. The evaluation assessed the project’seffect on employee performance and morale.As a result, OPM is developing performanceappraisals that are in-line with the goals ofROWE and not based on more structuredwork environments. From OPM Fiscal Year2010, Agency Financial Reporthttp://www.opm.gov/gpra/opmgpra/2010_AFR.pdf

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For further information contact:

Naomi StanfordSpecial Advisor

EnterpriseTransformationemail: Naomi.Stanford@gsa.gov

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