Business Productivity

Concept

Topic 7
 Defining Productivity
• Productivity is a measure of the efficiency of a
person, machine, factory, system etc in converting
inputs into useful outputs.
• Productivity is a relationship between the output
(product/service) and input (resources consumed
in providing them) of a business system.
• Productivity is computed by dividing average
output per period by the total costs incurred or
resources (capital, energy, material, personnel)
consumed in that period
• For survival of any organization, this productivity
ratio must be at least 1. If it is more than 1, the
organization is in a comfortable position.
• Productivity is relatively easy to measure for
physical goods, but It is more difficult to find
appropriate measures for some services outputs
such as units of education or health care.
• Creative knowledge workers provide other
instances of intangible outputs that are highly
valued, but elusive to calculate.
• The effort has to be made to appraise the value of
these outputs in a standardized way to provide a
benchmark (or standard) for measurement.
 Systems Concept

inputs outputs
transformations Customers
Land Goods
people and
SYSTEM
capital services
facilities
equipment
tools O
energy I
materials
information productivity
 Productivity
Units produced
Productivity =
Input used
▶ Measure of process improvement.
▶ Represents output relative to input.
▶ Only through productivity increases can our
standard of living improve
 Productivity Calculations

Labor Productivity
Units produced
Productivity =
Labor-hours used

1,000
= = 4 units/labor-hour
250

One resource input  single-factor productivity

 Multi-Factor Productivity

Output
Productivity =
Labor + Material + Energy +
Capital + Miscellaneous
► Also known as total factor productivity
► Output and inputs are often expressed in
dollars

Multiple resource inputs  multi-factor productivity

 Productivity Problems
Calculate productivity for the following operations
a. Three employees process 600 insurance
policies in a week. They work 8hrs per day, 5
days per week.
b. A team of workers makes 400 units of a
product. Which is sold in the market for $10
each. The accounting department reports that
for this job the actual costs are $400 for labor,
$1000 for materials and $300 for overhead.
Measurement Problems
1. Quality may change while the
quantity of inputs and outputs remains
constant
2. External elements may cause an
increase or decrease in productivity
3. Precise units of measure may be
lacking
 Elements of Productivity
Following are the elements of productivity for
better organizational growth and success
– Time Management
– Motivation
– Planning
– Collaboration
– Discussion
– Manage Multitasking
– Learning (Skill enhancement)
 Time Management
• Time = MONEY so poor Time Management = COST
– Set a schedule and try to follow it strictly
– Balance your priorities
– Learn how handle interruptions
– Focus on Tasks and Goals
– Effectively use the available technologies
 Motivation
• You must know what you are doing and enjoy
doing it
– Stay positive and stay out of Stress
– Set mini goals and long them
– Reward yourself for the achievements
– Have a someone in your team as a backup and
share your plans
– Stay inspired from your Seniors in team or your
field
 Planning
• Always make a work plan before staring work on
any project
– Sharing the plan with the management increase
the confidence level of employee and employer
both
– Use available tools and technologies for better
planning
– Focus on quality, time saving, and strategy
– Always do some research before making
decisions in your plans
 Collaboration
• Collaboration among the employees is as important
as other keys of organizational success
– Mutual Trust - Mutual Respect - Mutual
Participation are three core values of
collaboration
– Give your best and share your knowledge,
wisdom and interests, Start with understanding
– For best performance Communicate, coordinate,
and cooperate
– Collaboration starts with answering what and why
 Discussion
• Always discuss, problems, plans, goals, and
strategies
• When we put our thoughts into words, we clarify
what these thoughts are and we think
purposefully. When we discuss things with other
people, we meet other points of view and other
ways of doing things.
WHY DISCUSS:
1. To define the purpose of the activity!
2. To invite opinions or views about the topic!
3. To question the topic, and to encourage
learners to check their own understanding!
4. To clarify the topic or problem and to help
learners say what they mean clearly!
5. To check understanding of the whole topic!
6. To develop strategies and tactics!
7. To evaluate outcomes!
8. To review the whole process!
 Manage Multitasking
• Time spent on switching from one task to another
is a waste of time
– Each task may demand more time to be
completed when multitasking, rather than
completing one task at a time.
– You get tired quicker. Unfocused attention takes
more energy, therefore making it harder for you
to concentrate
– Missed deadlines and incomplete tasks.
– Tasks begin to overflow as your new tasks start
pilling on top of your older incomplete tasks.
– You can’t get rid of multitasking. It’s a natural
part of work and life. You only need to know
how to handle it. If you know how to walk and
eat, you will surely be able to cope with
multitasking. So Learn: how you can better
handle multiple tasks?
 Learning (Skill enhancement)
• Grab every single opportunity to upgrade your skills
– Focus on your field of interest
– Keep doing what you know “How to do”
– Try and test the related learning resources in
your free time
– Ask your management for refresher courses and
learning resources
– Share your skills and knowledge with your team-
mates to learn from them
– Transfer your knowledge to new comers and help
them in their goals and growth
 6 Principles of Productivity
i. The principle of Simplicity
• To maximize productivity in your life and career, remember to
always follow the simple path. All other things being equal,
the simplest solution is always the best. Just keep it simple,
stupid. It is not always the best to follow the complicated path
when there is a simple alternative.
ii. The Principle of Top 20 Percent
• It is good to note that 80% of all output always comes from
20% of the inputs. This can be said in different ways. Like 80%
of the wealth in the country is in the hands of 20% of the
people. 80% of your success comes from 20% of your effort.
80% of your breakthrough comes from 20% of your activities.
If you can pitch your talent with those 20%, then productivity
will be maximized
iii. The Principle of Persistent
• Many people want to be the “master” at it the very
first time they try. You cannot become genius or an
expert the first time you try. it takes about 10,000
hours of practice to become an expert in anything.
So take note of that.
iv. The Principle of Capacity. 
• No man can do beyond what he is capable of doing
except by some supernatural means. So if you
want to increase your productivity, then you must
build up your capacity mentally, academically and
spiritually.
v. The Principle of sufficient information. 
• What information do you have about what you are
doing? sufficient information and instructions must
be given and received before productivity can be
seriously affected. you are not limited by your
ignorance.
vi. The Principle of Location
• The magnitude of your level of production is also
determined by your location. It is easier to sell
electric pressing Iron in a city where there is
electricity than in a city with none. Your location
matters.
Factors Affecting Productivity
• Technical factors: Productivity largely depends on
technology. Technical factors are the most important
ones. These include proper location, layout and size of
the plant and machinery, correct design of machines and
equipment, research and development, automation and
computerization, etc.
• Production factors: Productivity is related to the
production-factors. The production of all departments
should be properly planned, coordinated and controlled.
The right quality of raw-materials should be used for
production. The production process should be simplified
and standardized.
• Organizational factor: Productivity is directly
proportional to the organizational factors. A simple
type of organization should be used. Authority and
Responsibility of every individual and department
should be defined properly.
• Personnel factors: Productivity of organization is
directly related to personnel factors. The right
individual should be selected for suitable posts. After
selection, they should be given proper training and
development. They should be given better working
conditions and work-environment. They should be
properly motivated; financially, non-financially and
with positive incentives.
• Finance factors: Productivity relies on the finance
factors. Finance is the life-blood of modern
business. There should be a better control over
both fixed capital and working capital. There
should be proper Financial Planning. Capital
expenditure should be properly controlled. Both
over and under utilization of capital should be
avoided.
• Government factors: Productivity depends on
government factors. The management should have
a proper knowledge about the government rules
and regulations. They should also maintain good
relations with the government.
• Management factors: Productivity of organization
rests on the management factors.
– The management of organization should be
scientific, professional, future-oriented, sincere
and competent.
– Managers should possess imagination, judgment
skills and willingness to take risks.
– They should make optimum use of the available
resources to get maximum output at the lowest
cost.
– They should use the recent techniques of
production.
– They should develop better relations with
employees and trade unions.
– They should encourage the employees to give
suggestions.
– They should provide a good working
environment, and should motivate employees
to increase their output.
– Efficient management is the most significant
factor for increasing productiveness and
decreasing cost.
• Location factors: Productivity also depends on
location factors such as Law and order situation,
infrastructure facilities, nearness to market,
nearness to sources of raw-materials, skilled
workforce, etc.
THANK YOU