Productivity Measurement

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Productivity measurement
Productivity is a measure of output from a production process per unit of input. Productivity is a measure of the effective use of resources, usually expressed as the ratio of output to input. Productivity is the value of outputs produced (Goods & Services) divided y the value of input resources. It is the quantitative relationship between what we produced and the resources used. So in shortly we can say: Value of output produced Productivity = Value of input produced In general sense productivity is an economic measure of efficiency that summarizes the value of outputs relative to the value of inputs used to create them. In economic sense, productivity is a measure of production output per unit of production input. This refers, to the ratio of output and input in the production process.

Importance of Productivity
1. Productivity is an important device for comparison of performance for various organizations. 2. Productivity increases the rate of low cost per unit and results in lower price. 3. Education, Research and Development, technology are positively correlated to productivity 4. reduction of poverty 5. It helps companies in measuring their strength and weakness. 6. it helps to know the contribution of different input factor used in conversion process 7. it is an indicator of how well the factors the production are utilized 8. it is an indicator of competitive position of an organization 9. it partially determines the peoples standard of living within a particular country 10. it is a valuable device for bargaining with trade unions

Factors affecting Productivity:
All the factors which are related to input and output components of a production process are likely to affect productivity. These are: • physical-organic, location, and technological factors;

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cultural belief-value and individual attitudinal, motivational and behavioral factors; international influences – e.g. levels of innovativeness and efficiency on the part of the owners and managers of inward investing foreign companies; managerial-organizational and wider economic and political-legal environments; levels of flexibility in internal labor markets individual rewards and payment systems, and the effectiveness of personnel managers and others in recruiting, training, communicating with, and performance-motivating employees on the basis of pay and other incentives. efforts and working capability Environmental factors such as the weather Employees managing their time wisely Design of transformation process Nature of technology used in the transformation process Control system used in organization Compensation and incentives system of the organization Attitude of trade union leaders Working environment of the enterprise Degree of innovation Maintenance systems Nature of plant and equipments Efficient use of input resources Worker condition of the organization

Techniques of improve productivity:
Productivity can be considerably input by improving the performance of various factors affecting productivity. The techniques to improve productivity can be: 1. Providing intensive training and consistent upgrading of education level and skills of employees. 2. Better planning and motivation of employees and improved job communications help to increase the capabilities of human resources that lead to increase productivity. 3. Proper design of transformation process 4. By using input technology 5. By using time and motion study for input work performance 6. Better transformation and material handling system 7. By providing work incentives and other benefits to workers 8. Positive attitude of trade union leaders

9. By improving working condition in the workplace 10. By ensuring worker involvement in decision making 11. By reducing downtime of maintenance 12. By introducing team efforts 13. By increasing completion among employees Productivity model: The process of calculating is best understood by applying the term ceteris paribus, i.e. "all other things being the same," stating that at a time only the impact of one changing factor be introduced to the phenomenon being examined. Therefore, the calculation can be presented as a process advancing step by step. First, the impacts of the income distribution process are calculated, and then, the impacts of the real process on the profitability of the production. A valid measurement of total productivity necessitates considering all production inputs, and the surplus value calculation is the only calculation to conform to the requirement.

Productivity measurement:
There are a number of ways to measure productivity. The main criterions of measuring productivity are• • On the basis of input performance On the basis of output performance

There are 3 types of productivity measurement1. Partial productivity: refers to output divided by a single input factor. Factors of production may include direct materials, direct labor, overhead or capital Output Partial productivity = Labor/ material/ Capital/ Energy Advantage: Disadvantage: 1. Easy to understand 1. if used alone may lead to 2. Easy to calculate inaccuracy 3. Tool to pinpoint 2. No consideration of overall improvement effect 4. Easy to use for assessing productivity performance 2. Multifactor productivity: refers the changes in output per unit of combined inputs. It measures reflect output per unit of some combined set of inputs. Output Multifactor Productivity = Labor/ Material/ Capita/ Energy

3. Total Productivity: refers the quantity of output divided by the cost of all inputs. Total Tangible Output Total Productivity = Total input Advantage: Disadvantage: 1. accurate picture of 1. Difficulty in obtaining data company 2. It required special data 2. Easy representation collection system. 3. Consider all quantifiable outputs and inputs

Benchmarking
Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries. Dimensions typically measured are quality, time and cost. Improvements from learning mean doing things better, faster, and cheaper. Benchmarking involves management identifying the best firms in their industry, or any other industry where similar processes exist, and comparing the results and processes of those studied (the "targets") to one's own results and processes to learn how well the targets perform and, more importantly, how they do it.

Procedure
There is no single benchmarking process that has been universally adopted. The wide appeal and acceptance of benchmarking has led to various benchmarking methodologies emerging. The 12 stage methodology consisted of 1. Select subject ahead 2. Define the process 3. Identify potential partners 4. Identify data sources 5. Collect data and select partners 6. Determine the gap 7. Establish process differences 8. Target future performance 9. Communicate 10. Adjust goal 11. Implement 12. Review/recalibrate. It could be divided into this- The benchmarking process consists of five phases: 1. Planning. The essential steps are those of any plan development: what, who and how. What is to be benchmarked? Every function of an organization has or delivers a “product” or output. Benchmarking is appropriate for any output of a process or function, whether it’s a physical good, an order, a shipment, an invoice, a service or a report. To whom or what will we compare? Business-to-business, direct competitors are certainly prime candidates to benchmark. But they are

not the only targets. Benchmarking must be conducted against the best companies and business functions regardless of where they exist. How will the data be collected? There’s no one way to conduct benchmarking investigations. There’s an infinite variety of ways to obtain required data – and most of the data you’ll need are readily and publicly available. Recognize that benchmarking is a process not only of deriving quantifiable goals and targets, but more importantly, it’s the process of investigating and documenting the best industry practices, which can help you achieve goals and targets. 2. Analysis. The analysis phase must involve a careful understanding of your current process and practices, as well as those of the organizations being benchmarked. What is desired is an understanding of internal performance on which to assess strengths and weaknesses. Ask: Is this other organization better than we are? Why are they better? By how much? What best practices are being used now or can be anticipated? How can their practices be incorporated or adapted for use in our organization? Answers to these questions will define the dimensions of any performance gap: negative, positive or parity. The gap provides an objective basis on which to act—to close the gap or capitalize on any advantage your organization has. 3. Integration. Integration is the process of using benchmark findings to set operational targets for change. It involves careful planning to incorporate new practices in the operation and to ensure benchmark findings are incorporated in all formal planning processes. Steps include: Gain operational and management acceptance of benchmark findings. Clearly and convincingly demonstrate findings as correct and based on substantive data. Develop action plans. Communicate findings to all organizational levels to obtain support, commitment and ownership. 4. Action. Convert benchmark findings, and operational principles based on them, to specific actions to be taken. Put in place a periodic measurement and assessment of achievement. Use the creative talents of the people who actually perform work tasks to determine how the findings can be incorporated into the work processes.

Any plan for change also should contain milestones for updating the benchmark findings, and an ongoing reporting mechanism. Progress toward benchmark findings must be reported to all employees. 5. Maturity. Maturity will be reached when best industry practices are incorporated in all business processes, thus ensuring superiority.

The following is an example of a typical benchmarking methodology: Identify your problem areas Because benchmarking can be applied to any business process or function, a range of research techniques may be required. They include: informal conversations with customers, employees, or suppliers; exploratory research techniques such as focus groups; or in-depth marketing research, quantitative research, surveys, questionnaires, reengineering analysis, process mapping, quality control variance reports, or financial ratio analysis. Before embarking on comparison with other organizations it is essential that you know your own organization's function, processes; base lining performance provides a point against which improvement effort can be measured. Identify other industries that have similar processes - For instance if one were interested in improving hand offs in addiction treatment he/she would try to identify other fields that also have hand off challenges.

These could include air traffic control, cell phone switching between towers, transfer of patients from surgery to recovery rooms. Identify organizations that are leaders in these areas - Look for the very best in any industry and in any country. Consult customers, suppliers, financial analysts, trade associations, and magazines to determine which companies are worthy of study. Survey companies for measures and practices - Companies target specific business processes using detailed surveys of measures and practices used to identify business process alternatives and leading companies. Surveys are typically masked to protect confidential data by neutral associations and consultants. Visit the "best practice" companies to identify leading edge practices Companies typically agree to mutually exchange information beneficial to all parties in a benchmarking group and share the results within the group. Implement new and improved business practices - Take the leading edge practices and develop implementation plans which include identification of specific opportunities, funding the project and selling the ideas to the organization for the purpose of gaining demonstrated value from the process. Types of Benchmarking: Benchmarking is classified on the basis of the type of partner selected for the benchmarking. The partnership team on (organization, groups, system, business process) maybe from the same company or from different organization. Based on this approaches benchmarking is classified as 1. Process benchmarking - Activity analysis will be required where the objective is to benchmark cost and efficiency; increasingly applied to back-office processes where outsourcing may be a consideration. 2. Financial benchmarking - performing a financial analysis and comparing the results in an effort to assess your overall competitiveness and productivity. 3. Performance benchmarking - allows the initiator firm to assess their competitive position. 4. Product benchmarking - the process of designing new products or upgrades to current ones.

5. Strategic benchmarking - involves observing how others compete. This type is usually not industry specific, meaning it is best to look at other industries. 6. Functional benchmarking - looks at similar practices and processes in organizations or companies in other industries. 7. Operational benchmarking - embraces everything from staffing and productivity to office flow and analysis of procedures performed. 8. Energy benchmarking - developing an accurate model of a building's energy consumption with the purpose of measuring reductions in usage. 9. Internal Benchmarking: seeks partners from within the same organization. The main advantages of internal benchmarking are that sensitive data and information is more accessible. 10. Generic benchmarking focuses on the comparison of a company's own processes against best processes. 11. International Benchmarking seeks partners from other countries of the world or there are too few benchmarking partners within the same country to produce valid results.

Job Design
Defination of Job Design:

Job design the act of specifying the contents and methods of jobs. In operation management, job design is incorporation of human factors in the design of the workplace. Job designers are concerned with who will do the job, how the job will be done and where the job will be done. Factors in Job Design who will perform the job? mental and physical characteristics of the workforce. what tasks to be performed? location of the work area, geographical location of the organization.

Who What Where

When Why Ways

time or day , time of occurrence in the workflow. organizational rationale for the job. methods of performance.

Elements of Job Design: The element of Job design fall into there main categories: • Task analysis • Worker analysis • Environmental analysis

Task analysis: Task analysis determines how to do each task and how
all the task fit together to form a job. It includes defining the individual task, determining their most efficient sequence, their duration and their frequency.

Element of task analysis
• Description of the tasks to be performed. • Task sequence. • Function of tasks. • Frequency of tasks. • Criticality of tasks. • Relationship with other. • Performance requirements. • Information requirements. • Control requirements. • Task duration. • Error possibilities.

Work analysis:
work analysis determines the characteristics the workers must passes to meet the job requirements, the responsibilities the workers will have in the job, and how the worker will be rewarded.

Elements of work analysis
Capability requirements. Performance requirements. Evaluation. Skill level. Job training physical requirements. • Mental stress. • Boredom. • Motivation. • Number of workers Quality responsibility. • Empowerment level. temperature, lighting, ventilation and noise. • • • • •

Environmental analysis:
Environmental analysis refers to the physical location of the job in the production or service facility and the environmental condition that must exist. These conditions include things such as proper JOB ANALYSIS

Element of Environmental analysis
• • • • • • • • Workplace location. Process location. Lighting. Ventilation. Safety. Logistics. Space requirements. Noise. • Vibration.

DEFINATION:

A job analysis is the process used to collect information about the duties, responsibilities, necessary skill, outcomes and work environment of a particular job. You need as much data as possible to put together a job description, which is the frequent outcome of the job analysis. Additional outcomes include recruiting plans, position postings and advertisements, and performance development planning within your performance management system. The job analysis may include these activities:  reviewing the job responsibilities of current employees,

 doing internet research and viewing sample job descriptions online or offline highlighting similar job,  analyzing the work duties, task, and responsibilities that need to be accomplished by the employee filling the position,  researching and sharing with other companies that have similar jobs and  Articulation of the most important outcomes or contributions needed from the position.

Behavioral Approach To Job Design: In an effort to make jobs more interesting & meaningful, job designers frequently consider:
1. Job Rotation means having workers periodically exchange job. A firm can use this approach to avoid having one or a few employees stuck in monotonous jobs. It works best when workers can be transferred to more interesting job, there is little advantage in having workers to broaden their learning experience and enables them to fill in for others in the event of sickness or absenteeism. 2. Job Enlargement means giving a worker a larger portion of the total task. This constitutes horizontal loading the additional work is on the same level of skill and responsibility as the original job. 3. Job Enrichment involves an increase in the level of responsibility for planning and coordination task. It is sometimes referred to as vertical loading. 4. Redesigning Jobs refers to the revising job descriptions and changing the nature of works so as to induce a high level of motivation among workers. 5. Participation is concerned with involvement of workers in decisionmaking. It is much easier to bring about meaningful changes in job if the workers are involved or at least they have opportunity to participate in the change process. The Job Characteristics Model: Job characteristics model, developed by Hackman & Oldham, provides some suggestion on how to structure job to include more motivators. According to this model, any job can be described in terms o f five core job dimensions, defined as follows: Core job Dimensions • • • • • skill variety Task identity Task significance Autonomy Feedback Critical psychological states Experienced meaningfulness of the work Experienced responsibility for the work knowledge of the actual result of the work activities Personal & work outcome High internal work performance High quality work performance Law absenteeism & Turnover

Employee Growth Need strength
(Figure: Job characteristics model) Core Job Dimensions: Can be applied to any job Skill variety, task identify, task significance, task autonomy and feedback. • Skill variety: skill variety is the number of different skills required in the job. • Task identity: means the completeness of the task done in the job. • Task significance: refers to the important of the job to the served population. • Autonomy: means the vertical expansion of responsibility, the amount of decision making and independence allowed for employees. • Feedback: refers to the extent that the job itself provides information about employee’s performance. Critical psychological states: The core job characteristics are in continuous interaction with individual differences that are critical psychological states this can be: • Experienced meaningfulness of the work: First when the job is structured by skill variety, task identifies & task significance this could lead employees to experience meaningfulness in their work. • Experienced responsibility for the work: Second is task autonomy, which leads to fallings of responsibility for the outcomes of work. • Actual result of the work activities: Third is feedback which leads employees towards knowledge of the results of their work. Personal & work outcome: Intern critical psychological status leads to a set affective and personal outcome. This can be: • High internal work performance: refers to the degree to which the employee is willing to work a consider organizational objectives. • High quality work performance: is the achievement of the employee in overcoming challenges, succeeding & growing. • Law absenteeism & Turnover: this can be reflected mainly in decreased rates of absenteeism among employees.

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