Employers have kept a sharp eye on the productivity of their workers ever since the first pyramid builder asked for a smoke break and turned up two hours later asleep under a palm tree. In more recent days, purveyors of time-and-attendance software have enlisted legions of engineers to foil attempts by workers to skirt their duties through extended breaks, buddy-punching, etc. It’s a classic cat-and-mouse game that no one ever seems to really win — although in the best-run companies, high worker motivation makes this less of a concern.

Still, we can all agree there’s more to an effective labor force than just showing up at the appointed hour and putting in one’s time. It’s also important what that employee produces while working, and how that measures up against the company’s production goals. This is especially important for lean practitioners, which may partly explain why American manufacturers have made such impressive productivity gains in recent decades, a time of growing interest in lean manufacturing.

In a truly lean company, however, simple productivity metrics — goods produced per hours worked — aren’t enough. Progressive manufacturers are thinking more holistically. In the context of an unstable economy, in which companies have slashed thousands of jobs but aren’t sure when to begin rehiring workers, this kind of business intelligence takes on greater significance.

Consider the benefit to your organization of measuring the utilization of your workforce as well as its on-the-job performance and the quality of the products it helps to make. Time and attendance standout Kronos has wrapped these measures into a KPI it calls Overall Labor Effectiveness, or OLE. Though Kronos coined the term as a counterpart to Overall Equipment Effectiveness (OEE) and offers software to measure OLE, the concept has applicability well beyond that company’s customer base.

The integration of metrics such as quality of output, productivity, and general workforce utilization provides a good measure of that most important asset of all — your workforce.

The concept is quite forward-looking; even Kronos’ executives admit that. After all, the Overall Equipment Effectiveness KPI hasn’t caught on in all corners of the industrial world, even after many years in circulation. But the idea of measuring labor in similar ways should be appealing. And perhaps, far down the road, we’ll see a fusion of OEE and OLE, since your production equipment and the people who run it are two parts of the same whole.

What do you think? How does your company measure workforce effectiveness?

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