Production, Productivity And Efficency : PRODUCTIVITY Flashcards
What is productivity?
The amount of output that can be produced with a given input of resources
How do you measure labour productivity?
Labour productivity = total output /number of workers
This is output per worker per period of time
If a business is capital intensive, what do you use to measure efficiency ?
Capital productivity
How do you calculate capital productivity?
Total output/ amount of capital employed
What are the factors influencing productivity?
Separation and the division of labour
Education and training
Motivation of workers
Workers practices
Labour flexibility
Capital productivity
How does specialization and the division of labour influence productivity ?
Specialization is the production of a limited range of goods by an individual, business , region, nation to concentrate on what they are best at
How does education and training influence productivity ?
Government can improve quality of labour by investing in education (which will increase the productivity of their workers)
How does motivation of workers influence productivity?
Firms might use financial incentives eg. Price rate/bonus or non financial eg. Job rotation or delegation
How does workers practices influence productivity ?
The way labour is organized and managed can affect productivity
Working practices are the method and systems that employees adopt when working
How does labour flexibility influence productivity ?
Labour can be more flexible if workers are trained to do different jobs and can switch between them
How does capital productivity influence productivity ?
When using new Tech it will be more efficient
How does productivity affect competitiveness?
Raising productivity means the business will be able to produce more output with the same level of resources
⬇️
Will mean lower costs resulting in charging lower prices than rivals
⬇️
Making the business more competitive in the market place
⬇️
Consequently, increase market share and may become more competitive in overseas markets
Disadvantage: improving productivity may not be enough to compete with overseas rivals so other factors are taken into account
How can you improve labour productivity?
Increase specialization —> Workers become expert and quicker
Improve motivations —> non financial methods eg. Job enrichment
Financial eg. Performance related pay
Improve training —> increase staff motivation improves productivity
Improve labour flexibility —> introducting job rotation
How do you improve capital productivity ?
Improve service and maintenance —> have regular check up to prevent machine breakdown
Update and replace old tech —> improves productivity if business regularly update machinery —> renew old, worn out or poor machinery
Ensure that operatives are well trained —> they need to understand how to work safe with the machinery
