CHAPTER II

REVIEWOFRELATEDLITERATURE
T h i s c h a p t e r i n c l u d e s f o r e i g n l i t e r a t u r e s a n d f o r e i g n s t u d i e s t a k e n f r o m t h e inter
net, other unpublished thesis, and studies conducted by other research groups. Thischapter also
includes local literatures, taken from local published books and materials,and local
studies, taken from research works and studies related to the subject
matter.R e l a t e d f o r e i g n a n d l o c a l l i t e r a t u r e a n d s t u d i e s t h a t d e a l t w i t h t h e o r i e s ,
p r i n c i p l e s , concepts, approaches and techniques are reviewed which contributed a lot
towards theenrichment of knowledge, deeper understanding and insight of the researchers.

Foreign Literature
One of the more significant economic statistics to be released of late concerns labor
productivity. This is an interesting topic and widely non-understood concept very few people
understand either what it is or why it really
matters. i m p l y s t a t e d , l a b o r p r o d u c t i v i t y m e a s u r e s t h e a m o u n t o r v a l u e " o f o u t o
u r generated per hour worked. #hy does it matter$ %reater labor productivity enables firm sto
produce a given amount of goods or services with a smaller number of labor hours. &nd,
since payroll cost is related to the number of hours they use, this helps firms control their costs, making
their enterprises more profitable. #ages are not the correct measure the cost of labor to a firm.
'n economics, it doesnt just focus on the costs of an activity, such as wages here. 't looks
at both cost sand benefits and their relationship to each other. #hat are the benefits from hiring more
labor$ The output this labor input creates, in terms of labor productivity. o, the correct m e a s u r e o f
the cost of labor to firms is what economists refer to as unit labor costs