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: