MODULE Lesson 2: pRODUCTIVITY

2.3 PRODUCTIVITY
MEASUREMENT
PRODUCTIVITY MEASUREMENT

Productivity may be measured either on aggregate basis or

on individual basis, which are called total and partial
measure.

Total productivity Index/measure = Total output/ Total input

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PRODUCTIVITY MEASUREMENT

Partial productivity indices, depending upon factors used,it

measures the efficiency of individual factor of production

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PRODUCTIVITY MEASUREMENT
Example:

1. The input and output data for an industry given in the table. Find out various
productivity measures like total, multifactor and partial measure.

Output Input
1. Finished units______10,000 1. Human________3,000
2. Work in progress____2,500 2. Material_______153
3. Dividends__________1,000 3. Capital________10,000
4. Bonds ------- 4. Energy_________540
5. Other income -------- 5. Other Expenses__1,500

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PRODUCTIVITY MEASUREMENT
Solution:

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MODULE Lesson 2: pRODUCTIVITY
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2.4 MODERN DYNAMIC

CONCEPT OF PRODUCTIVITY
MODERN DYNAMIC CONCEPT OF PRODUCTIVITY

Productivity can be treated as a multidimensional phenomenon. The

modern dynamic concept of productivity looks at productivity as
what may be called “productivity flywheel”. The productivity is
energized by competition. Competition leads to higher productivity,
higher productivity results in better value for customers, this results
in higher share of market for the organization, which results in still
keener competition.

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MODERN DYNAMIC CONCEPT OF PRODUCTIVITY

Fig. 2.1 Dynamic Concept of Productivity

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2.5 FACTORS AFFECTING

PRODUCTIVITY
FACTORS AFFECTING PRODUCTIVITY
Economists site a variety of reasons for changes in productivity. However, some of
the principle factors influencing productivity rate are:
1. Capital/labor ratio
It is a measure of whether enough investment is being made in plant,
machinery, and tools to make effective use of labor hours.
2. Scarcity of some resources
Resources such as energy, water and number of metals will create
productivity problems.
3. Work-force changes
Change in work-force effect productivity to a larger extent, because of
the labor turnover.

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FACTORS AFFECTING PRODUCTIVITY
4. Innovations and technology
This is the major cause of increasing productivity.
5. Regulatory effects
These impose substantial constraints on some firms, which lead to change in
productivity.
6. Bargaining power
Bargaining power of organized labor to command wage increases excess of output
increases has had a detrimental effect on productivity.
7. Managerial factors
Managerial factors are the ways an organization benefits from the unique planning and
managerial skills of its manager.
8. Quality of work life
It is a term that describes the organizational culture, and the extent to which it
motivates and satisfies employees.