MODULE 1: TOPIC 9
PRODUCTIVITY – measures efficiency (rate of output compared to units of input) productivity means greater output using the same amount of resources results in lower per unit cost
FACTORS AFFECTING PRODUCTIVITY
INTERNAL
EXTERNAL
Labour Management Relations- open relationship- two way communication- staff participation- motivation
Required Investor Returns- investors/shareholders have expectations for high dividends/capital growth
Competition- more competition means greater need to increase productivity
Level of Prices- high productivity means lower unit costs & lower prices
Regulations & Laws- health, safety & pollution laws can result in lower productivity
Market Demand- if demand is high and resources are limited in supply productivity must increase
Quality of Labour Supply- Well trained, flexible, creative, participative, innovative
MEASURING PRODUCTIVITY
Output per worker Total output _
Total number of workers
Quality assurance feedback- procedures in place to ensure quality meets predetermined
standards
Consumer Feedback- highlight problems with products- suggestions for improvements- obtained from test panels, focus groups, feedback forms, customer care departments
METHODS OF IMPROVING
PRODUCTIVITY
Good working environment- physical working conditions- employee management relationship- respect, cooperation, communication- motivation- well designed work environment
Profit sharing plans- share of profits distributed to workforce
Training- especially during technological change- workers become competent in using technology- quality improves- workers become flexible and can do a number of tasks- job enrichment
Staff participation in decision making
- motivation-reduced labour turnover
Technological improvements- capital/technology increases production, efficiency & productivity