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Is the Chancellor right to give up on UK productivity?

UK productivity has become so bad that even the Chancellor, George Osborne, gave up hope of an improvement when he officially downgraded the UK’s already weak productivity growth predictions in this month’s budget.

But is the Chancellor right to give up so soon?

Admittedly things are bad. Despite high employment and working some of the longest hours in Europe, UK workers are now so unproductive that we already produce 30% less per hour than workers in France, Germany and the US.

This makes us so uncompetitive that workers in those countries could take every Friday off and they’d still achieve more in the working week than we do in the UK. So what’s the solution?

Although there are fundamental issues around education and adoption of new technologies, economists estimate that poor management accounts for as much as a quarter of the gap in productivity between us and our main rivals (1). The message being that most managers simply aren’t directing the efforts of employees in the right way.

Fortunately, even though the government’s given up trying to improve things, there are three proven tactics you can use to boost productivity at your organisation right now.

Three ways to boost productivity.

Step 1: Focus on strengths
We’re at our most productive, successful and motivated when we focus on things we’re naturally gifted at and derive great pleasure from doing.

Research underlines this natural truth, showing that appraisals linked to strengths generate a 36% improvement in performance, while emphasising weaknesses leads to a 27% decline (2).

The simple fact is: employees excel when managers are encouraged to let them focus on doing the things they enjoy the most. Organisations that give employees the opportunity to do what they do best every day have a 30% higher probability of success on productivity measures than those that don’t (3).

Step 2: Get managers to think like leaders
Years of restructuring and redundancy activity has led to flatter management structures, stripping out the layers of leadership managers once relied on for help with trouble-shooting and decision-making. But instead of stepping into the void, most of today’s managers remain confused about just how much autonomy they have, causing them to distance themselves from problem projects or constantly refer things up the line, instead of empowering themselves and others to succeed.

As our brand new best practice guide, Leadership for Managers: Creating a Culture of Accountability shows, there are a number of things you can do to get your managers to think like leaders. Become one of the first to download the report now and discover how we helped ABB to equip its managers with the leadership principles of responsibility, respect and determination. Not only did this enable ABB to measurably improve profitability, but it also won the CIPD Award for Best Training & Development Initiative 2015.

Step 3: Focus on the right things
Instead of being the strategic business driver for improved productivity that it could be, far too many organisations view performance management as an infrequent tick-box exercise, allowing managers to set individual targets that bear little or no relation to the overall goals of the business.

To be effective, good performance management needs to be directly aligned to the commercial goals of the organisation. It isn’t just about paperwork or annual reviews. It is about giving people an ongoing understanding of how they can personally contribute to the overall success of the business on a daily basis.

In my experience of helping organisations to properly cascade business goals down through the organisation, such clarity not only motivates people to put their effort into what matters most, but it also improves engagement and boosts business performance.

(1) Why the productivity gap, BBC Business, 21 May 2015

(2) Corporate Leadership Council, 2005

(3) The Strengths Focused Guide To Leadership, Mike Roarty and Kathy Toogood

By Susy Roberts, Managing Director, Hunter Roberts (www.hunterroberts.com)

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