Different Types of Productivity

In very simple words, productivity is just a term that is used to measure efficiency. In terms of economics, it means measuring the output that comes from the inputs provided. Technically productivity is defined as output per unit of input, labour, or capital.

A real-time example would be a bag manufacturing factory. Suppose, if 10 labours collectively produce 20 bags per day by employing all the resources, it would not be considered as very productive. However, if the same number of labours collectively manufacture 200 bags per day, productivity would be considered to be very high.

Productivity is an important context not just in the professional scenario. It is relevant in every walk of our life, every sector and hence it is very important to know how productivity can be measured. In economics, operations, factories, as well as service sectors. However, with tangible products as output, the measurement of productivity becomes a lot easier. However, with intangible output, the determination of productivity is a lot more complex.

In factories and manufacturing firms, the units of output can be divided by the labour or tangible inputs and the productivity will be measured. However, in any service, it is harder to find. So in some cases, the aggregate revenue collected by the employee is recorded. It is then divided by their salary to find a deduction of productivity.

Factors Affecting Productivity

There are a number of factors that determine productivity in an organisation. They are described as follows :

Selection of proper manpower largely affects productivity. Selecting the right employees for the right job leads to higher productivity. Also providing proper training to the employees for skill formation increases productivity.

Selecting and acquiring proper types of equipment and machinery in an organisation increases productivity. Availability of optimum, well-functioning and up-to-date machinery in the workplace ensures smooth functioning of labour and hence better productivity.

The floor area or space covered is a detrimental factor in productivity. The total area of different departments, including quality department, administrative block, affect productivity in the workplace. Apart from the floor area, the positioning or the location if these departments also play a major role.

The use of economic, clean and renewable sources of energy has also proved to significantly increase productivity.

Intra-organisational movement is also a significant influence on productivity. The movement of manpower and materials inside the organisation to a large degree affects productivity in the workplace.

Also Read: How to Measure and Improve Employee Performance?

Types Of Productivity

Productivity, broadly speaking is a consolidated term. However, it can actually be rather dynamic in its meaning. It can be differentiated on the basis of a number of factors namely, labour, capital and materials. Below listed are the comprehensive explanation about the three types of productivity.

Labour Productivity

Labour productivity, otherwise called labour efficiency, is characterized as genuine financial yield per work hour. Development in labour productivity is estimated by the change in monetary yield per work hour over a characterized period. Labour productivity and employee productivity are not the same aspects. Employee productivity is characterised as an employee’s yield per hour.

Work profitability is straightforwardly connected to improved ways of life as higher utilization.

This expansion in yield makes it conceivable to expend a greater amount of the merchandise and enterprises at an inexorably sensible cost.

Development in labour profitability is legitimately decipherable from changes in physical capital, new innovation, and human capital. When the increase in labour productivity is evident, in most cases the attributing factors are the above listed three. Physical capital is the instruments, gear, and offices that labourers have access to use to facilitate production and manufacturing. New developments are new techniques to join contributions to create more yield, for example, sequential construction systems or robotization. Human capital speaks to the expansion in training and specialization of the workforce. Measuring labour productivity also provides a huge and clear insight into the trends of these mentioned factors.

Labour Productivity

Capital Productivity

Capital productivity is the output per unit of estimation of fixed capital assets. In a socialist economy, capital profitability describes the effectiveness with which fixed capital stock is utilized. It is regularly utilized in the financial examination and in the detailing of creation plans and plans for capital consumptions, both for the national economy in general and for independent organisations or companies, professional associations, joint ventures or enterprises.

Information on the GDP and on national income is utilized in computing capital efficiency for the national economy all in all; for ascertaining the profitability of independent organisations information on the net as well as the gross output are put to good use. In segments where the yield is homogeneous (oil, coal, concrete), physical units are at times utilized in the figurings. Capital productivity is determined based on the parity valuation of the fixed creation resources (devaluation costs included), utilizing either the normal incentive throughout the year or the incentive as of the year’s end. Capital profitability is inversely proportional to the ratio of capital and output.

Capital Productivity

Material Productivity

Material productivity is feined as the amount of output produced in term of per unit input of materials. Materials, in this case, are defined as natural resources. It can be broadly differentiated from total productivity.

The capacity to make the equivalent or more yield utilizing less material assets is known as material productivity. Procedure inconstancy is at the base of materials overconsumption. It begins process wasteful aspects that bring about faulty production, procurement errors, faulty billing practises etc. In other words, it is a blatant wastage of resources.

Each business needs to see if its utilization of materials is changed in accordance with the base adequate levels, or, on a flip side, overconsumption is available. Numerous organizations set the base minimum level dependent on historical data or forecasted data of consumption. However, setting the minimum level should always be based on optimum consumption. R&G can help an organisation by baselining what that minimum level is, along these lines setting the measures. When this count is comprehended and shared by all the essential partners, the time has come to evaluate the deviations between real utilization and guidelines, and to make a framework for persistently lessening or removing the sources of those deviations, subsequently expanding material efficiency.

Material Productivity

Productivity and its various types are extremely relevant in any big or small workplace. It helps to keep a proper check on resources and also works as an alarm for necessary changes that have to be made to make the best use of all kinds of availabilities.

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