1. Prepared by : Shruti Aggarwal Faculty- Management
PRODUCTIVITY
Prepared by :
Shruti Aggarwal
Faculty- Management

2. INTRODUCTION DEFINITIONS
Productivity is some relationship between inputs and outputs of an enterprise. It is the quantitative relationship between what we produce and resources used.
DEFINITIONS
1) Productivity is measure of how much input is required to produce a given output, i,e it is a ratio of output to input
2) According to Peter drucker, “ Productivity means balance between all factors of production that will give the maximum output with the smallest effort.”

3. Productivity= Measure of output
Measure of Input
Productivity of the firm can be defined as:
PT = QT
L+C+R+M
where PT = Total productivity
L = Labour input
R = Raw material and purchased parts input
M = Other miscellaneous goods & services
QT = Total output

4. IMPORTANCE OF PRODUCTIVITY
The concept of productivity is of great significance for undeveloped and developing countries. In both the cases there are limited resources that should be used to get the maximum output. Productivity analysis and measures indicate the stages and situations where improvement in the working of inputs is possible to increase the output.

5. FACTORS AFFECTING PRODUCTIVITY
These factors can be divided in two main categories:
Category I
a) Primary factors are effort and working capacity of an individual
b) Organizational factors are related to design and transformation process required to produce some item, the nature of training etc.
c) Conventions and traditions of organization e.g activities of labour union, medical facilities etc.

6. Category II
1) Factors related to output: Research and development techniques, improvement in technology and efficient sales strategy of the organization will lead to improvement in output.
2) Efficient use of input resources, better stores control, production control policy, maintenance of machines etc will minimize the cost of production

7. These factors can also be studied under the following heads:
1) Technological factors- The technological advancement always strive to achive the increased production with minimum of cost and effort e.g application of mechanized power, automation etc.
2) Managerial factors: Progressive and imaginative managerial skill always tap greater output of human and non- human resources.

8. 3) Financial factors- The availability of financial resources enables the organization to spend money for the research and development, employment of professional executives, adoption of latest technology. All these factors directly affect the level of productivity. 4) Natural factors- Humidification in textile industry, quality, thickness and depth of mineral resources, climatic effect on labour efficiency etc.

9. 5) Sociological factors- The genetic characteristics, racial quality etc. has a great impact on productivity of labour. 6) Government policy- The Government policy regarding financial incentives, taxation policy, tariff policy, industrial licencing, labour laws etc also affect the productivity.

10. TOOLS OF PRODUCTIVITY
The level of productivity can be increased through the following means:
Application of the scientific management techniques.
Devising better method of operating the things with the help of time, motion and method studies.
Implementing simplification and standardization in operations.
Application of the principle of division of labour and specialization.

11. v) Effectivating the control techniques, such as production control, quality control etc vi) Improvement in the plant layout and material handling facilities. vii) Provision of better working conditions, plant and personnel services viii) Proper training and selection of workers

12. MEASUREMENT OF PRODUCTIVITY
The productivity is expressed in terms of ratio between output and input, and it is measured in terms of output per unit of input. Infact the output is a function of input and so it can be expressed as O=f(I). For the purpose of simplicity, productivity can be classified as under: (i) Labour productivity (ii) Capital productivity

13. (iii) Raw material and fuel input productivity (iv) Total factory productivity index (i) Labour productivity= Output Labour (ii) Capital productivity = Output Capital In the denominator, only the fixed capital investments are considered such as land, building,plant,machinery etc.

14. (iii) Raw material and fuel etc
(iii) Raw material and fuel etc.= Output Materials (iv) Total factory productivity index= Vt WoLt +ROCT or Goods and services produced