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The Productivity Engagement Approach (PEA): understanding and enhancing productivity in an organizational context

EXECUTIVE SUMMARY

 Research Background

The UK’s productivity record remains a central policy concern. Attempts to address the issue, however, appear to be hampered by the idea of productivity being understood in a variety of different ways. TPI’s own work points to the absence of ‘a well-developed narrative around productivity at the firm level’ (Penney & Pendrill, 2022: 7). A better understanding of how productivity is perceived might, in turn, provide for the identification of more effective practices and policies.

Building on earlier UKRI/ESRC-funded work (Reynolds & Siddle, 2020), this project addresses these issues. The earlier work involved an in-depth, multi-phase intervention in six SMEs, taking a consensus-building approach designed to facilitate organization-specific conversations about productivity and value creation.

Research Questions

  • How is productivity defined and conceptualised at the firm level, including its associated challenges and solutions?
  • How do conceptualisations of productivity vary between and within organisations?
  • What factors influence the effectiveness, scalability and long-term sustainability of firm-level productivity interventions?

Research Methods

The research had four main elements: application of a developed version of the original Reynolds and Siddle (2020) methodology to four new case study companies; secondary analysis of data from the original Reynolds and Siddle (2020) six case study companies; follow-up interviews with four of the original six case study companies; and interviews with four expert advisory bodies (CIPD, Be the Business, Enterprise Research Centre and Work Advance).

Research Findings

(i) Firm-level conceptualisations of productivity

What the case study companies had in common was what we call ‘productivity engagement’, a commitment to value creation through the establishment of a ‘productive environment’.  To capture this, we call the company-level intervention process the Productivity Engagement Approach (PEA).

Underneath these broad umbrella terms, the research confirmed the use of a wide range of definitions of, and terms for, productivity.

The research also showed a significant distance between company-level perceptions and the way productivity is approached at the policy level.

(ii) Variation between and within organisations

A concern in the analysis was whether patterns in the idea of productivity could be identified on the basis of a company’s sector or, within the company, on the basis of the function or level of responsibility of the managers involved. Systematic variation on this kind of basis was difficult to find.

The most important differences were those that could be observed between individual organizations.  Also emerging as significant factors were the stage of development of the company and the degree of granularity with which economic sectors are defined.

(iii) Effectiveness, sustainability and scalability of firm-level interventions

The PEA demonstrated its effectiveness.  Real-time and initial feedback on the interventions from the four new case study companies showed them to be extremely positive.  Interviews with four of the companies from the original six showed that the impact of the intervention process continued to be felt and valued. All companies could identify significant, sustainable change resulting from the process.

More significant was that the intervention was associated with ‘productivity engagement’.  Whatever the conception of productivity or simply ‘being productive’, it was something that was an explicit guide to behaviour and direction.

The effectiveness of the interventions was linked to their emerging from a process of ‘guided discovery’. Progress was made on the basis of conversations and understandings already present in the companies.  The use made of an existing structure, Kano et al.’s (1984) framework of customer intimacy, is also recognised.

On the issue of scalability, discussions with the four expert advisory bodies made clear the challenges faced by any attempt to address company-level issues on a national scale.  Two particular issues are identified: how to engage businesses in policy initiatives; and the role that might be played by intermediary bodies.

The Way Forward

  • Progress on the productivity agenda requires the development of both a common headline terminology and firm-specific, unique, tailored interpretations that are capable of embracing the richness and complexity that already exists. We propose that the concept of ‘productivity engagement’ enables this.
  • The firm-level intervention used in this project, the Productivity Engagement Approach (PEA) has established value in different sectoral and occupational settings and could contribute significantly to broader efforts to address the productivity agenda. It provides a valuable opportunity to shift current thinking towards a focus on more productive environments underpinning greater value creation.
  • Scaling-up the intervention will require the active support and involvement of intermediary and infrastructure bodies, at national, regional and industry levels – particularly in the development of a group of expert facilitators.

Authors Stephen Procter, Deborah Harrison, Colin Siddle, Clive Reynolds

Themes

  • Organisational Capital

Published

05/08/2025

Cite

S. Procter, D. Harrison, C. Siddle, C. Reynolds (2025) The Productivity Engagement Approach (PEA): understanding and enhancing productivity in an organizational context, Productivity Insights Paper No. 058, The Productivity Institute.

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