Total Quality Management

January 15, 2010

White-Collar Productivity

Filed under: Quality and Reengineering — Tags: , , , , — Ferhan Syed @ 11:47 am

Productivity of white-collar worker is no less important than that of direct labor or manufacturing employees. Indeed, in terms of numbers and expense, non-production employees outnumber production employees by a wide margin. Yet the problem of measurement  of output is more elusive. Measuring the units assembled per man-hour is not too difficult, but how many reports should an accountant prepare, not to mention the most difficult of all measure–managerial productivity.

Peter Drucker tells us that it is usually the least known, least analyzed, least managed of all factors of productivity. Research has shown that white-collar employees are productive only about 50 percent of the time. The remainder is non-productive time and can be traced to personal delays (15 percent) and improper management (35 percent). Cause of wasted time include:

  1. Poor scheduling
  2. Slack start and quit times
  3. Lack of communication between functions
  4. Information overload
  5. Poor staffing
  6. Inadequate communication of assignments
  7. Unproductive meetings and telephone conversations

Measuring the Service Activity

Although the manufacturing worker (one who physically alters the product) has been measured for decades by time standards, time studies, and work sampling, it is not easy to set standards for the non-manufacturing employee or the service activity. It is unlikely that measurement can be achieved in the same way as is done for the manufacturing worker. Nevertheless, a system can be devised to describe the productivity of an activity at a point in time and then provide a baseline for judging continuous improvement over time. The system is particularly appropriate for multi-plant or multi-divisional companies with similar products or services and for individual companies within an industry.

The basis for a system of measurement starts with the existing functions and activities of the organization. Each activity is a subset of a particular function. For example, the activity of  recruiting is a part of the human resource function, accounts receiveable is a part of the accounting function, and so on. The typical organization may identify a hundred or more activities that can be grouped into ten or more functions.

The next step is to identify the output indicators that “drive” the activities or cause work in the activities. In other words, if it were not for the work caused by or resulting from indicators, there would be little need for the activities. If for example, there were no personnel employed, there would be no need for employee relations. If there were no purchasing, there would be no need for vendor invoicing. The resources utilized in the activity of vendor involving are therefore a dependent variable of the purchasing function. In other words, if activities are “input” in the productivity ration of out put to input, then the indicators are the “output.”

Source: Total Quality Management, Second Edition by Joel E.Ross

3 Comments »

  1. I think a further explanation is required about alignment of activities with business objectives. In white collar jobs contribution to the business objective are very significant and we should not ignore the same while deciding on the input of productivity. Also the alignment between activity its contribution in business objectives and reflection in individual performance is the most difficult puzzle to solve.

    Comment by Zulfiqar Ali — February 19, 2010 @ 7:00 pm

  2. Sir,

    It is really wonder full!
    I think this is a good informational stuff!

    Thank you for contribution.

    Comment by Lt. Navi — March 24, 2010 @ 12:01 pm

  3. Although this provides some basic information. I think real case studies shall help.
    Also I think white collar productivity is also relevant to engineering industry.

    Comment by hiten — April 29, 2011 @ 1:00 pm


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