What is meant by Productivity?
Productivity is the ratio of outputs to inputs. It refers to the volume of output produced from a given volume of inputs or resources. If the firm becomes more productive, then it has become more efficient, since productivity is an efficiency measure. Productivity can be:
Labour productivity
Total output in a given time period | = | Output per worker |
Quantity of labour employed |
Capital productivity
Total output in a given time period | = | Output per capital input |
Quantity or Value of Capital employed |
How to improve productivity?
Productivity can be improved by:
- Raising the skill level of the workers through training
- Using more technologically advanced equipment in the production process.
- Improving the motivation level of the employees
- By managing the available resource in a more efficient way.
