Productivity

Whats is productivity?
Productivity is the ratio of output to some or all of the resources used to produce the output.
Types of productivity
We can mention the following types of partial productivities:
 Labor productivity: units produced / hours worked
 Capital productivity: output / capital input
 Material productivity: output /material input
What is the productivity index?
We can calculate a type of partial productivity as labor productivity as output per man hours for a complete
year. These figures obtained from year to year can be indexed and can be related to a base year so that
output per man our comparisons can be made.
Definition of total productivity
It is the ratio of tangible output and tangible input.
Differences among partial productivity, total factor productivity and total productivity
Men, materials, machines, methods, money, energy, etc. are inputs.
 Partial productivity: output / one class of input
 Total factor productivity: net output / (labor + capital)
 Total productivity : sum of all tangible outputs / sum of all tangible inputs
Elaborated concept of productivity
Technically it can be defined as the ratio of the output to the input, or it is the multiple effects of
efficiency and effectiveness. Productivity plays a very vital and crucial role in every one of our lives.
Seeing its need and importance, the European Productivity Agency (EPA) has defined productivity
as, “It is the function of providing more and more everything to more and more people with less
consumption of resources”.
Now a days productivity is one of the most discussed topics in any industry as the increased
productivity can lead any industry to great success in the market. Industries are adopting various
innovative techniques to increase their productivity and that too by maintaining the standards of the
organization, and in every possible way in a reduced period of time.
SCOPE OF PRODUCTIVITY
As mentioned above an increased productivity can take any organization to great success in the
market and help the companies to create its impact on the customers. Following are the scopes of
productivity:
 It helps to increase the rate of production, i.e. more number of products will be manufacture
and that too in a very less amount of time. This will ultimately lead to large number of
products being available for the ever-increasing demands of the customers in the market.
 As the organization focuses on increasing its product quality, but they can’t compromise with
the quality of the product. So, it ultimately helps in maintaining the quality of the product to
survive in the market.
 As the productivity will be increased, more and more number of products will be available to
the customers in the market and so their quality of life can get improved.
 It is a general trend in the market that, if the demand of the product is higher then cost of the
product increases, and if the demand of the product is less then cost of the product decreases.
This means, a greater amount of productivity can control over the cost of the product.
 Finally the most important and very common benefit of an increased productivity is that the
organization will be in profit. It will make more money. This extra benefit of the organization
can be invested to do business in the different areas of the market, or to give an increased pay
to the workers which will in turn be helpful in increasing the productivity of the organization.
FACTORS AFFECTING PRODUCTIVITY
Productivity, as every other concern on this earth, depends on various factors effecting it, both
positively and negatively. The various factors affecting productivity are as follows:
1. Internal Factors/ Controllable Factors
a) Human Resource
They are the fuel of any industry. As any vehicle runs on petrol or diesel, an industry runs on its
human resource. They produce the products in the industry. The quality of product depends on the
quality of the worker. If workers are not educated and not given proper training, then they are not
able to give justice to their work.
b) Incentive Schemes
The psychological stability of the workers is very mush essential for them to work efficiently for the
production of good quality of products. Incentive schemes can be used to motivate the employees by
giving extra payment as bonus or promotion.
Organization can also use non monetary incentive schemes such as offering challenging jobs to the
workers, appreciating their works, etc. to motivate the workers and to keep them psychologically
sound.
c) Workers’ Participation in the Management
Organization should allow a healthy participation of the workers in the management works to
develop mutual understanding and co-operation between the workers and the management; to have a
healthy work environment for the workers. This healthly work environment will increase the overall
productivity of an organization.
d) Management by Objective (MBO)
It is one of the latest measures in the field of increasing productivity. In this process the superiors and
the sub- ordinates of the organization jointly identify the expected results of each person and later
access these information about the work done by each individual. This is done to utilize the
maximum potential of every worker, resulting in an increased productivity.
e) Quality circle
It is also one of the new and innovative techniques adopted by the leading companies in the market to
increase their productivity. It is a small group of workers which meets at a regular interval of time to
discuss about the various problems faced during work, investigate the causes of the problem and take
corrective measures if authorized. It usually consists of 5-15 members who collectively identify the
problems related to the workers mainly.
f) Communication System
Communication is the way of expressing one’s feelings to others. There must not be communication
gap in any organization, as it can lead to misunderstanding which hampers productivity.
g) Man Power Planning
The man power requirements of any industry must be carefully planned by keeping in view the
number of workers required, their required skills, the training needs, etc. This will provide the
industry with quality workers who can give justice to their works.
h) Working Hours
According to the International Labour Organization (ILO) the working tine for workers is 40
hours/week. Any organization should follow the regulation of working hours. Extra and excessive
hours increase fatigue and reduce productivity.
i) Technology
The organization should give emphasis on the use of technologically advanced machinery, as they
are far more efficient and time saving than the out dated machineries. With the use of the new
technology, production can be increased many folds and that too in very less time.
j) Working Conditions
Various working conditions existing in the industry such as lighting, ventilation, noise reduction
units, etc. must be maintained properly to increase the efficiency of the workers for an increased
productivity.
2. External Factors/ Uncontrollable Factors
These are the conditions existing outside the premises of any organization but have their impact on
the rate of production of products in any industry. The organizations are helpless in front of these
factors and are bound to act accordingly. The various external factors are
a) Government Policies
b) Customer Demands
c) Market Trends
d) Natural Calamities, etc.