People Management and its link to Productivity

Productivity. People Management

According to a new report by the CIPD (Chartered Institute of Personnel and Development) on People management and Productivity (September 2023), investing in high performance working (HPW) principles in the workplace may be critical to improving an organisation’s productivity. Businesses which were better managed, with good quality management and having structured management practices in place, measuring productivity, and providing training to managers, were more resilient. However, Brexit-related uncertainty and the impact of the pandemic, have affected investment decisions.

HPW is defined by the UK Commission for Employment and Skills as ‘a general approach to managing organisations that aims to stimulate more effective employee involvement and commitment in order to achieve high levels of performance’[1]. HPW workplaces are typically characterised by:

  • A strong focus on employee development and training
  • A commitment to employee empowerment and autonomy
  • A culture of collaboration and teamwork
  • A focus on continuous improvement

According to the CIPD’s report organisations without any HPW practices in place were negative about their productivity, whilst organisations that made extensive use of HPW practices had a more positive view of their productivity. Specifically, processes and practices such as appraisals, training, flexible working, and health and wellbeing practices were all associated with a more positive productivity rating.

The report highlighted how investments in management capability was supporting productivity. The report’s findings implied a link between an investment in management capability, such as training of managers, training in mental health issues, appraisals and flexible working, and productivity. For instance, employers who invested in training their managers or employees on managing and supporting mental health at work were more likely to rate their productivity highly. Additionally, managers were also more likely to think hybrid working was successful when they had been trained in its use. Yet, just over a quarter of organisations said most of their managers had received training in managing people.

This lack of people management skills was a blocker to productivity according to the report, and it identified differences across sectors. For instance, public administration, defence, and police, are more likely than the private sector to train a high percentage of its managers. However, the survey reported that the public sector, especially health and education, were less likely than private sector managers to feel they had the time to manage employees as well as cope with heavy competing workloads.

Business strategy and how an organisation was managed also influenced its productivity.  For instance, employers that measured and talked about productivity were more likely to rate their productivity highly and this had a positive effect compared to employers who didn’t measure this. Furthermore, the evidence suggests this effect was mainly down to the general way the business was managed and its approach to quality, and its approach to managing performance.

A culture of continuous Improvement really helps

The report also suggested that making business improvements such as writing job descriptions and introducing appraisal systems may trigger transformational change. The process of writing job descriptions could identify a requirement to be specific on the quality of an employee’s contribution.  . Additionally introducing a basic staff appraisal system may uncover a need to collect better data on the activities of the business and its employees. Reinforcing this with tools to measure productivity such as appraisal systems, performance reviews, and managing underperformance correlated with business productivity.

What organisations could do differently to improve productivity 

There are a number of things that firms could do differently to improve productivity through people management. For example, firms could:

  • Invest in employee development and training. This will help employees to develop the skills and knowledge they need to be productive.
  • Empower employees and give them autonomy. This will help employees to feel more engaged and motivated.
  • Create a culture of collaboration and teamwork. This will help employees to work together more effectively and efficiently.
  • Focus on continuous improvement. This will help the organization to identify and address any areas where productivity could be improved.
  • Set clear goals and expectations. Employees should know what is expected of them and how their work contributes to the organization’s overall goals.
  • Provide regular feedback. Employees need to know how they are performing and where they can improve. Feedback should be timely, specific, and constructive.
  • Recognize and reward good performance. Employees should be recognized and rewarded for their contributions. This can help to motivate employees and improve morale.
  • Create a positive work environment. Employees should feel valued and supported in their work environment. This can be achieved by creating a culture of respect, trust, and open communication.

There are other factors to consider such as the recent weakness of UK productivity growth which may be the result of the EU membership referendum and its aftermath and the Brexit-related uncertainty discouraging business investment. The estimated loss of productivity due to this lower investment is at 1.3% of GDP. However, according to the Office for Budget Responsibility, there is expected to be a recovery of productivity growth by 1.3% in the UK by 2024.  Organisations investing in their people management[2]strategy, and continuous improvement, could improve employee morale, engagement, and productivity. Also, involving experienced HR professionals could improve the chances of these people management practices being implemented. This can lead to a number of benefits, including increased profits, improved customer service, and a more competitive edge.


As an outsourced HR consultant based in Edinburgh, and operating across the UK, Albany HR can support with:

  • Leadership and Management Training
  • Leadership and Management Coaching
  • HR Audits

Please get in touch for a chat about how we can support you, 0131 364 4186.

[1] Promoting high performancce working (

[2] Economic and fiscal outlook – March 2023 – Office for Budget Responsibility (