Improving productivity

Productivity is measured by the quantity of outputs that can be produced from given quantities of inputs.

If 10 employees produce 1,000 units of output in a week then the average output per employee is 100 units per week. Increasing productivity therefore involves moving to a situation where, for example:

The same 10 employees produce 1,500 units of output in a week, i.e. the average output per employee is 150 units per week.

There are two main ways to improve productivity:

1. Make labour more productive e.g. through investing in people by training, and by motivating employees to work harder.

2. By investing in the plant and equipment that employees use for example through purchasing more high-tech equipment e.g. advanced computers, robot technology systems etc.

Quality circles

There are a range of techniques that can be employed to improve productivity through quality. By getting employees to work smarter rather than necessarily harder it is possible to raise output.

Organising employees into Quality Circles, which are designed to identify improvements in work processes and activities, it is possible to improve productivity.

An obvious way of increasing productivity is to reduce waste.