LABOUR PRODUCTIVITY

Question 1

What is labour productivity

Answer 1

A measure of efficiency that calculates the average output produced by each worker.

Question 2

What is the formula for working out labour productivity

Answer 2

Formula = Total output divided by number of employees

Question 3

What happens when the productivity is

Answer 3

The higher the productivity = lower labour unit costs

The more each worker is producing, the lower the unit labour costs

Question 4

Example

Answer 4

Example: If someone is paid £10 per hour to build laptops, and they currently do 10 units per hour, that would be £1 per unit, but if that person started producing 15 units hour, the cost per unit will fall to around £0.66

Question 5

What is rising labour productivity a sign of

Answer 5

Rising labour productivity may be a sign of worker engagement and motivation

Question 6

How can automation affect labour productivity

Answer 6

Can also be affected by the degree of automation - For example: Hand washing 10 cars per hour VS cleaning 20 cars per hour using a jet wash.