The strength and capability of the staff will help management identify the hiring needs or the training needs of the current staff. Obtaining an optimum level of productivity by controlling all the elements needs an in-depth understanding of productivity and its attributes. It will also help to formulate effective strategies. It is better to use a staff management system or software to measure employee or labor productivity and work hours.
What is productivity?
In simple words, productivity is a measure of the efficiency of a machine, person, or factory in converting the available inputs into useful outputs. There are various ways to measure productivity. To obtain productivity, one needs to divide the average output of an entity or element per period by the costs that have been incurred, or the resources consumed during that period, such as personnel.
As a result, one of the simplest ways to measure productivity is to divide the units produced by the inputs used for production.
Productivity = Units produced / Input used
There is also multi-factor productivity or total factor productivity that takes into account all the components that are utilized in producing the output.
Productivity = Output/ (Labor+ Materials+ Energy + Capital + Miscellaneous)
So, there are different ways to measure the productivity of an organization. Let’s discuss and understand the different types of productivity calculations and measurements.
Partial productivity is the ratio of output to partial input. It calculates the productivity of each input in respect of the output it produced. Further, it helps evaluates the contribution of each factor in generating and producing the output. You can measure it as:
Partial Productivity = Total Output / Partial Input
Various partial inputs include labor, capital, energy, machinery, materials, etc. Some instances of partial productivity measurements are:
Labor Productivity = Total Output / Labor Input
Labour Productivity (in terms of hours) = Total quantity produced / Actual man hours required to produce that quantity
Labour Productivity (in terms of money) = Total cost (or sales value) of output produced / Amount in terms of rupees spent on workers
You can increase the productivity of labor by increasing the efficiency of labor or workforce and reducing labor time.
Similarly, Material Productivity = Total Output / Material Input
Material Productivity = No of units produced / Total Material Cost
Material productivity depends on how well you utilize the material in its conversion into a finished product.
You can improve it using a skilled workforce, adequate machines and tools, and good design of products, etc.
Capital Productivity = Total Output / Capital invested
It mainly depends upon how effectively you use the assets production. As a result, the timely replacement of fixed assets is critical. It will help increase Employee productivity as well as it will help reduce the overall cost in the long run.
Machine Productivity = Total Output/ Total machine hours
Raw materials are transformed into finished products by mechanical and chemical processes using machines and equipment. Therefore, machine productivity mainly depends on the availability of raw materials, skilled workers, power, machine layouts, etc.
Lastly, Energy productivity = Total output / Total Energy used
Production use sources of power, like electricity, gas, or petroleum. Human workers, even knowledge workers use energy in different forms while working. These are inputs, and therefore, increasing energy productivity involves finding ways to reduce energy use or finding an alternate source of energy that is cheaper than the current one.
Partial productivity is easy to compute and understand. It can also be highlighted to the management and can be compared to other organizations, as partial productivity data is easily available for similar organizations in the industry. So, it can be used for Employee productivity analysis to identify the state of labor productivity in an organization.