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