PRODUCTIVITY.

PRODUCTIVITY

BY- RISHIPAL
BY-RISHI PALSINGH
SINGH
MBA-
MBA-IIII-B
 productivity
Definition ---- In general sense
productivity is some relationship between
input and output of an enterprise . It is the
quantitative relationship between what we
produced and the resources used.
 Contd.
 Productivity is the measure of how much
input is required to produced a given output
I.e. it is ratio of output to input.
 According to Peter Drucker , “productivity
means balance between all factors of
production that will give the maximum
output with the smallest efforts.”
 contd.-
 According to ILO, “the ratio between the
volume of output as measured by the
production indices and the corresponding
volume of labor input as measured by
employment indices.
 Organization of European Economic
community (OEEC) defines productivity as
the ratio between the production of given
 contd.-
commodity measured by volume and one or more
of the corresponding input factor also measured
by volume . Thus there can be a number of
measures indicating the level of performance
corresponding to each input.
Measure of output
Productivity = _______________
Measure of input

 
 Contd.-
In most of the cases output will be good and
services produced, for which input will be
men , money, equipment, power, plant
facilities, and other items used in the
process of production. Total productivity of
firm can be defined as :-
QT
PT = ───────
L+C+R+M
 Contd.
Where -
PT = Total productivity
L = Labour input
R = Raw material and purchased parts inputs.
M = Other miscellaneous goods and services input factor.
QT = Total outputs.
 Importance of productivity
The concept of productivity is of great significance
for undeveloped and developing countries. In
both the cases there are limited resources that
should be used to get the maximum output . The
aim should be optimum use of resources so as to
provide maximum satisfaction within minimum
effort and expenditure .productivity analysis and
measures indicate the stages and situation where
improvement in the working of input is possible
to increase the output.
 Strategies of increasing productivity

 Long term
1. Improve basic process by research and development.
2. Improve the existing production line by providing better
plant, equipment, and building.
Note- In the long term it will require capital.
 Intermediate stage .
1. Improve and simplify the product, reduce the verities
and standardize the range.
Note- intermediate stage may require capital.
 Contd.-
 Short term.
1. Improve method of operating and existing
material resources.
2. Improve the planning of work and the use of man
power.
3. Increase the effectiveness of all employees.
Note-It require little or no capital investment.
The actual significance and the order of importance
of these strategies will vary according to the
individual situation of each organization.
 Factor affecting productivity
The factor which affect the productivity are
classified into two categories-
Category – I.
a) Primary factor are effort and working
capacity of an individual.
b) Organizational factor are related to the design
and transformation process required to
produced some items, and nature of the ans
training other skill imparted to worker to
 Contd.
perform certain operation in a production
process control and various other
incentives.
c) convention and traditions of the
organization e.g. activities of labor unions
medicals facilities, workers and executives
understanding etc.
 Contd.
 Category- II
A. Factor related to output.
I. Research and development techniques.
II. Improvement in technology.
III. Sales strategies of the organization.
B. Efficient use of input resources, better
store control, production control policy,
will minimize the cost of prod.
 Contd.
 The factor listed in the category I&II are
further divided into four major classes.
1. Technological factors- tool & raw material
used.
2. Managerial factors- organizational structure,
scheduling of work, work environment,
innovations, material management etc.
 Contd.
3. Labor factor- skills of workers, health,
attitude toward management, training and
discipline etc.
4. External factor- power and transport
facilities , tariff and taxes etc.
 some of the factor are controllable and
some are un controllable .
 Technique to improve
productivity
 productivity can be improved by improving
the performance of various factor affecting
productivity .Technique are –
i. Better planning and training of employees,
improved jobs and communication and
effective management through CPM/
PERT methods.
 Contd.
ii. Use of time and motion studies to study &
improve work performance.
iii. Better transportation & material handling
system.
iv. By providing work incentives & other
benefits to the workers.
v. Workers involvement in decision making
& working of organization.
 Contd.

vi. Improvement in technology of production

process & nature and quantity of raw
material used .
Vii Use of linear programming and other
quantitative technique for better decision
making.
viii. ABC analysis to identify more important
items &then apply inventory control to
reduced capital investment.
 QO0

Productivity & input-output

analysis
Input-output analysis is the method to study
the interdependence of input &output
factors. It shows equilibrium between input-
output. If ‘Y’ denotes the final demand of
industry and ‘A’ is the matrix of input, then
the output for each industry shown with the
relation :- Q1 (I -A1)’PO
____________
Q0 (I – A0 )’P0
 Contd.
 Where
P0 Q0 =Value of output in base year
Q 1 PO =Value of output in current year base
on the based year prices.
(I – A1) = Technology matrix in current year
(I – A0) = Technology matrix in base year.
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