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Labour Productivity: Watchword for Progress and Business Excellence |
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The general term
productivity has become the watchword for progress in the post second
world war period. The words of Drucker 'the enterprise must control
the wealth producing resources to discharge its purpose of crating a
customer. This is the administrative function of business in its economic
aspect it is called productivity. Productivity is the amount of product
created by one unit of a given factor of production over a stated period
of time. Productivity expresses the marginal relationship of inputs to
outputs and measures the economic efficiency of production. In vegetation,
productivity is the ability to produce life: to create carbon compounds
from atmospheric carbon dioxide through photosynthesis. In factories and
corporations, productivity is a measure of the ability to create goods and
services from a given amount of labor, capital, materials, land,
resources, knowledge, time, or any combination of those. Productivity
indicators ordinarily relate output to a single factor of production,
creating measures like labor productivity, capital productivity, and land
productivity.
When productivity is maximum and minimum?
Before we get into deeper understanding, it is necessary
to know what it the maximum and minimum productivity. Productivity is
higher if the expected output is obtained with lesser input of resources
or higher output is taken with the same input of factors of production.
Conversely it is said to be lower when with the minimum employment of men,
material, machine and maximum output is possible. It is minimum when the
output is smallest with the maximum of these resources, as Drucker said,
that the administrative function of business is 'to utilize the wealth
producing resources, so productively that a consumer is created. This can
be done only if maximum goods are produced with the minimum of these
resources so that the cost is least per unit of production. Greater
productivity is the result of more effective and economical utilization of
resources.
Components of productivity
Most definitions of productivity include profitability, efficiency,
effectiveness, value quality, innovation and quality of work life. Useful
definitions combine unique human and organisational effectiveness
variables.
Profitability: The profitability includes capital,
sales operating cost, information processing, human resources and others,
depending on the type of organisation. Productivity =
Sales/operating cost.
Efficiency : Efficiency related to the competent
performance.
Effectiveness: The ultimate measure of productivity
is effectiveness. It is related to standards like quality or usefulness.
It is evaluated based on individual or organisational effectiveness.
Value: Value is a fair or proper equivalent in
money or commodities for something sold or exchange. It is the
estimated worth, appraised worth, market price, purchasing power,
and replacement costs.
Quality: Conformance to requirements,
specifications, or standards, characterize quality. It indicates the
relative worth of products and services and the efficiency and
effectiveness of processes used to produce products and provided services.
Innovation: Creative process, adapting products,
services processes, structures etc, to meet internal and external
pressures, demands, changes and needs.
Quality of life: It is how well people in the
organisation are able to satisfy important personal need through their
experiences of working and living in the organisation.
Why productivity is important?
For many years productivity has been a key issue for national
development strategies because of its impact on economic and social
development. Productivity-oriented policies are closely linked to the
promotion of a better quality of working life, participation, market
economic principles, individual initiative and creativity, and
human-oriented management styles and practices. Productivity objectives,
accepted by all organization concerned, become the important instrument of
just distribution of wealth, sound industrial relations and democratic
workers' participation. Thus, productivity is a good tool to balance
economic, social, technical and environmental objectives. High
productivity leads to a reduction in the per unit cost of production Factors that affect productivity
Though many factors affect the productivity, a few of the factors can
be discussed here.
The general environment factors are partly economic and partly
sociological. The availability of capital, raw materials power,
machineries, market, and the degree of competition are important economic
factors. Influencing productivity. The sociological factors include
social institutions and organisational forms as well as beliefs attitudes,
and mode of behaviour.
The technical factors include degree of mechanization and automation
and related aspects in addition to those factors governing technical
condition of production. Under these group of technical factors fall the
method and techniques of production the degree of mechanization or
capital; intensity and the scale of operation. Here the psychological,
impact of rationalization process on employees also to be looked into./
The importance of human factor doesn't diminish with technological
advance, rather it increases. The major contributive factor in
productivity is the skill and knowledge level of employees. Education,
training, logical thinking, research aptitude etc influence the production
and productivity. Human motivation, teamwork, attitude of employees etc
are determinant factors, which affect the productivity.
Better accountability of labourers on management practices is a crucial
factor in the productivity. A congenial labour-management relation is a
determinant factor, which influence the morale and motivation of employees
at work. If the organisation has activities of trade union organisations,
this once again vital to productivity achievements and economic
development. Many organisational factors adversity affect
productivity. Job stress, job dissatisfaction, absenteeism, labour
turnover, which have direct impact on employee's contribution on work.
Environmental factors include the physical environment (e.g. building
services, heating, lighting, noise), technology (e.g. telecomm, hardware
and software compatibility, fax, photocopier), facilities (e.g. access to
meeting rooms, layout, occupational density) and ergonomics (e.g.
workstation design).
How to improve productivity Organisations Role in better productivity Organizations must keep in mind that their people are motivated with the desire to perform in order to enrich the productivity. With the help of some tools like creativity, invention along with the innovation for fostering productivity in the culture of organization itself as a whole. It is up to the organization and the leadership to provide an overall objective, which is shared by all employees. In organizations that excel at motivating their staff, a high degree of teamwork exists and all employees are treated with respect and dignity; which results higher chances of increasing productivity even on the individual basis and the organizational ground. Some possible application examples are: clear task specifications, standard operating procedures, policies, continuous enforcement of standards, performance feedback, easy job flow, shared values, information, performance appraisals, skills development, trusting climate, coaching by manager, career tracking, sufficient work conditions, correct resources and inputs are the prime tasks of HR. Conclusion
The determinate productivity includes both physical
facilities of production and human aspects. Productivity is the result of
complex interaction of all these factors on material and psychological
planes. Limited industrial development, the prevalence of pre-capitalistic
social environment, the backwardness of technology, lack of adequate wage
and non wages incentives and the inadequacy of management are some of the
crucial bottle necks to productivity. HR department have keen role
in productivity improvement and organisational development.
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