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
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Total output in a given time period
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= | Output per worker |
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Quantity of labour employed
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Capital productivity
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Total output in a given time period
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= | Output per capital input |
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Quantity or Value of Capital employed
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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.
