Factors Affecting Productivity:
All the
factors, which are related to input and output components of a production
process, are likely to affect Productivity.
These factors can
be divided in two main categories, namely:
Category I:
(a) Primary
factors are effort and working capacity of an individual.
(b)
Organizational factors are related to the design and transformation process
required to produce some item, the nature of training and other skill imparted
to workers to perform certain operations in a production process, control and
various other incentives.
(c)
Conventions and traditions of the organization e.g., activities of labour
unions, medical facilities, workers and executives understanding etc.
Category II:
(i) Factors related
to output: research and development techniques, improvement in technology and
efficient sales strategy of the organization will lead to improvement in
output.
(ii) Efficient
use of input resources, better stores control, production control policy, maintenance
of machines etc. will minimize the cost of production.
The factors listed
in categories I and II can be further divided in four major classes viz.:
(i)
Technological
(ii)
Managerial
(iii) Labour
and
(iv) External
factors.
The
technological factors can increase the output per unit of input substantially.
These can be defined in-terms of technology employed, tools and raw material
used etc. Managerial factors can be located in organizational structure,
scheduling of work, financial management layout, innovations, personnel
policies and practices, work environment, material management etc.
Labour factors
are characterized by the degree of skills of the works force, health, attitude
towards management, training, and discipline. Greater the congruence between
the skills of work force and technology employed better would be the
productivity.
External factors are
innumerable and identifiable in the environment with which an organization has
to interact e.g., the power and transport facilities, tariffs and taxes etc.
have important bearing on the levels of productivity. Some of these factors are
controllable and some are uncontrollable and a demarcation should be made
between the two.
Ways for Increasing Productivity:
Productivity
can be increased in a number of ways. It can be increased either by reducing
the input for the same level of output or by increasing the output with the
same level of input or by combination of both. This can be achieved by
elimination of waste, by using improved technology, better production design
and management efforts.
There can be
increase in productivity by reducing down time of maintenance, reduction in
material input, better quality of goods, improved utilization of resources,
reduction in working capital requirements, reduction in inventory size,
improvement in manpower skills through training etc. Better leadership
management can increase output. When employees are better motivated, output can
be increased.
Decision-making
is a key factor, which affects productivity. Better decisions obtained through
adequate and timely information systems definitely will improve effectiveness
and efficiency of the organization.
Techniques to
Improve Productivity:
Productivity
can be considerably improved by improving the performance of various factors
affecting productivity.
The measures to
improve productivity can be:
(i) Better
planning and training of employees, improved jobs and communication and
effective management through CPM/PERT methods.
(ii) Use of
time and motion studies to study and improve work performance. It enables to
assess the quantum of work, which can be used for planning and control.
(iii) Better
transportation and material handling system.
(iv) By
providing work incentives and other benefits to workers.
(v) Workers
involvement in decision making and working of organizations.
(vi)
Improvement in technology of production process and nature of raw-material and
its quality
(vii)
Simplification, standardization and specialization technique.
(viii) Better
and efficient utilization of resources at the disposal of the enterprises.
(ix) Use of
linear programming and other quantitative techniques for better decision
making.
(x) ABC
analysis to identify more important items and then apply inventory control to
reduce capital investment
(xi) Value
engineering to reduce material content by good design.
Measurement of Productivity:
There are a
number of ways to measure productivity.
The main criterion
of measuring productivity is:
(i) In terms
of input performance by calculating changes in output per unit of Input
(ii) On the
basis of output performance by calculating change in input per unit of output.
Following are some
of the measures in common use:
Where output
can be measured in total quantity produced and labour can be measured in total
man-hours required to produce that output. Output and labour can also be
measured in terms of their value in money units. Turnover/capital employed
A general measure
of productivity can be defined as:
Each kind of
measure needs some specific kind of information. The appropriate measure can be
selected on the basis of the information available and the objective measure
can be selected on the basis of the information available and the object of the
investigation.
In fact, the
measure of productivity indicates the performance of inputs namely labour and
capital in an enterprise. Increase in output is not an indication of increase
in productivity.
Production is an absolute measure and productivity
is a relative measure.
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