productivity

Zoraiz Fazal
This article suggests the importance of productivity in organizations. It indicated that productivity depends upon three factors that include Labor, Management and Capital. This study further offers different ways to deal with these factors in order to achieve productivity.

17th, January, 2011

Productivity
Productivity is the ratio of output produced by the firm divided by the inputs (labor & capital). Firms basic objective is to enhance productivity. Higher productivity means higher efficiency. Productivity is an excellent measure to evaluate a countrys ability to provide an improving standard of living for its people. However, increasing productivity depends on three variables. a) Labor. b) Management. c) Capital. Labor is one of an important variable which contributes to improved productivity. Labor contributes about 10% of the annual increase in the productivity of the firm. However, labor can be calculated by two ways one is to divide units produced by labor hours and other is to divide estimated labor hours by actual labor hours efficient labor will lead to improved productivity. BUTLER, FERRIS AND NAPIER in their article that was written in 1991, suggested that separate HR practices (regular training, internal communication, wages, staffing, hiring, firing, performance appraisals, job rotations) for each individual will enhance labor efficiency of the firm. So, labor should be trained regularly about dynamic trends in production, technology and processes and clearly communicate their objectives their duty and work which will enable them to perform more efficiently. Another article of GEORGE AKERLOF AND JANET YELLON that was written in 1984, and they believe that productivity depend on actual wage paid by employer. If firm cut wages, it will harm productivity and further cutting will raise labor cost. Moreover, appropriate wages will give you following benefits: Lower turnover. Improved moral. Improvements in the average quality of job applicants. Reduced shirking of work by employees due to higher cost of job loss.

Apart from this, if staffing decisions are taken by qualified and experienced manager who will higher right person for the right job e.g. who will run the plant, who should be on inventory control, who is best for packaging etc. Managers will also hire those who are the need of the firm. Over staffing, under staffing and needless firing can also be controlled which will allow firm to be efficient than before. They should also give appraisals which will motivate employees to work diligently. Employees will try to achieve their short term goals more efficiently which will help firm to achieve their long term objectives which ultimately enhance productivity. Job rotation is another important independent variable that will contribute to higher labor efficiently. Employees should rotate their employees periodically in different departments so that they can get experience of each department and firm will also get to know which employee is best for which job that will contribute to improved labor efficiency. So following independent factors contributes to higher labor efficiency and higher labor efficiency will ultimately leads to higher productivity.

FRAMEWORK OF PRODUCTIVITY:

PRODUCTIVITY/EFFICIENCY
DEPEND ON

LABOR EFFICIENCY
DEPEND ON MANAGEMENT CAPITAL TECNOLOGY

REGULAR TRAINING & EDUCATION APPRAISALS AND BONUSES WAGES INTERNAL COMMUNICATION