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Does it matter? The ultimate way to measure productivity is $$$.. companies that generate more $$$ with the same number of "people" are more "productive". Drilling that number down to orgs/teams/ICs is a political endeavor, which means how you do that depends on the result you're looking to generate.

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True, but the relationship is certainly not linear and not a Markov process. Also, the $$$ a company makes are rarely directly translated to incentives for developers. I remember a case where a company was doing an OK engineering/product job, but had problems with sales. Then a new sales driven CEO came into place and for the next 3-5 years the company had great financial results, while at the same time eroding the engineering culture (who cares if money is flowing anyway). Then that guy left and the next CEOs had to take care of the mess.

Even if the ultimate measure is dollars most employers will attempt to predict which metrics of employment best correllate with dollars so they can predict how many people to hire

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