PRODUCTIVITY AND ITS

MEASUREMENT
• Productivity is one measure of the effective use of resources
within an organization, industry, or nation.
• The classical productivity definition measures outputs relative to
the inputs needed to produce them. That is, productivity is
defined as the number of output units per unit of input.

Productivity = Output/Input

• Productivity is a classic economic metric that measures the

process of creating goods and services. Productivity is the ratio of
the amount of output from a team or organization per unit of
input. Conceptually productivity is a simple metric. ... There are
four types of productivity.
Automation Employee
software flexibility

Workflow Employee
organization development
Automation software:
Countless hours are wasted each year documenting and recording information
with paper forms. By utilizing workflow automation software, businesses can save
thousands of hours (translation: dollars) that would otherwise be wasted on form-
filling. Further, by switching to digital over manual systems, record keeping
becomes automatic as well, saving additional time in the future.

Employee flexibility:
According to a study from the University of Warwick, happy employees are 12
percent more productive. By increasing contentment, your company will see a
burst in productivity. One way to invest in making your employees' happiness is
offering a flexible work environment. People like having choices and freedom, so
provide it in the form of flextime, telecommuting options or simply more vacation
time. This gives employees the freedom to choose how to be the most effective –
and the happiest.
Workflow organization:
Implement an organization system for tracking employee responsibilities and
workloads. Such systems can be designed to help teams communicate regularly
and effectively about long-term projects or goals. Scrum, for example, has teams
meet daily to discuss their workloads from the previous day, the workloads for the
coming day and any impediments they face. These discussion points allow the team
to both sync on responsibilities and collectively find ways to overcome roadblocks.

Employee development:
Employees, as previously discussed, are most productive when satisfied and
engaged. Employees that fall into a monotonous routine will find themselves feeling
discontented, so engage them! Encourage employee development opportunities
through active learning and the development of personal and professional skills.
Offer opportunities for employees to develop personal hobbies or to take on new
professional responsibility.
Quantification of Data:
It is very difficult to calculate quantitative data for output and input in volume
or in number of units. This problem can be solved if output of each product is
measured separately. The output mat be measured in terms of sales volume.

Interdependence of Factorial Productivity:

Productivity of one factor may effect the productivity of another factor. It is a
very difficult task for management. For example. Labor productivity may be
adversely affected by bad quality of materials, defective tools etc.

Measurement of Input:
As input is comprised of a number of diverse factors, it is not possible to have a
common unit of measurement for all these factors.
It means the productivity of the business as a whole, taking all input factors together.
Total productivity is the ratio of total output and total input.

PRODUCTIVITY = UNITS OF OUTPUT/UNITS OF INPUT

Labour Productivity:
Productivity is a revealing indicator of several economic indicators as it offers a dynamic
measure of economic growth competitiveness, and living standards within an economy.
It is the measure of labour productivity (and all that this measure takes into account)
which helps explain the principal economic foundations that are necessary for both
economic growth and social development.
LABOUR PRODUCTIVITY = TOTAL OUTPUT/TOTAL MANHOUR
Material Productivity:
In some firms material accounts for the major cost of production to measure the
productivity. It is ratio of Cost of Material Consumed by Number of units produced.

MATERIAL PRODUCTIVITY = COST OF MATERIALS CONSUMED/ NO. OF UNITS PRODUCED

Machine Productivity:
It is very essential for the business to know the capacity utilization and efficiency of
machinery.

MACHINE PRODUCTIVITY = TOTAL OUTPUT/ACTUAL MACHINE HOURS WORKED