Is the idea of improving productivity there to create problems between employers and employees? Not at all. Productivity has been on the agenda of many governments, politicians, academics and economists ever since the economies of various countries started coming back to normal following the Second World War.
Since then, these people all stressed the importance of productivity because of its relationship with the general economic health of the country. Several governments are concerned about the productivity levels of their respective country because it is regarded as the main, or at least one of the main, indicators of efficiency when comparisons are made with other competitors in some of the strongest world markets.
But at the end of the day, what is productivity and how well do managers, supervisors and indeed all employees fully understand the concept of productivity? Productivity can be best described as the main task of management in every company, in every country, in every economy. Productivity has been generally defined as the ratio of a measure of output compared to the measure of some or all the resources used to produce this output. In this way, one or a number of input measures could be taken and compared with one or a number of output measures in order to calculate the productivity ratio.
Total Productivity Measure
When the management of a company attempts to measure the total productivity of their firm, they would have to obtain all the inputs and all the outputs in a system this is called the Total Productivity Measure (TPM). The inputs used in this elaborate process could include the hours of labour involved, the units of capital, the quantity of raw materials used; and these figures are then compared to the consequent output. This exercise is not meant for the man in the street. Professors and economists around the world have dedicated whole careers in a bid to find the best way of calculating productivity ratios.
Why measure productivity?
Some people ask: Why is it important that firms or countries measure their productivity? Of course, there are numerous reasons why productivity must be measured. Primarily, this measure is important for strategic purposes; to compare the global performance of a firm with its competitors and other similar firms. Moreover, it could be used to plan ahead; to compare the relative benefits accruing from the use of different inputs or varying proportions of the same inputs. It may also prove useful for internal management business such as collective bargaining with trade unions and more particularly to pinpoint improvements required. Secondly, it is good to measure productivity for tactical purposes so as to enable the firm’s management to control the performance of the firm via the performance of the individual sectors of the firm, whether it is by function or by product.
Productivity vs Production
There is a large difference between productivity and production. The latter refers to an increase in output over a given period of time. For example, Mary manages to produce three pairs of jeans every hour. This is Mary’s production rate. Similarly, my factory workers manage to produce 1,000 products every ten minutes. This is my staff’s production rate.
In contrast, productivity is about the ratio of output when calculated against an input. Many economists describe productivity as the quantitative relationship between what we produce and the resources we use.
But in order to calculate and improve one’s productivity, especially in a workplace, one has to take into account several factors that could have a drastic effect on productivity. One of this is efficiency. As the world of work continues to change, the need to improve productivity continues to be considered as an important tool for an enterprise to improve its results and prosper, which apart from being beneficial to the owners and shareholders is also beneficial to the employees.
From the very earliest days, people strove to promote greater efficiency in the way things were being done. Initially, and for obvious reasons, this predominantly concerned manual working methods. Improved methods, improved and user-friendlier tools, such as computers, and incentives for the workforce were all part of the secret formula to achieve greater productivity. The world of work has changed drastically over time. Over the years Malta, as well as many other countries have faced social, economic and technological changes. Today, both employers and workers alike have better working conditions, better attitudes towards work and towards the worker allowing different and more positive expectations.
How can employers improve productivity?
One must admit that in order to improve productivity, and thus efficiency, an employer has to take many issues into consideration. Among these one can mention the motivation for people to be productive, job design and better organisation of the workplace, the importance of employee training and development and the importance of communication at the workplace.
It has been established, time and time again, that people work better and are far more productive when the environment, working methods and equipment they have been given to work with are actually designed to help them, rather than make their life more difficult, with targets which are impossible to reach as we have has had the opportunity to stress in previous articles.
Motivation as the key to performance
There is an old saying that you can take the horse to the water and you can make all the sacrifices in the world to get it there but you can certainly not force it to drink. It will drink only if it’s thirsty and this certainly applies to people. They will do whatever they want to do unless motivated to do otherwise, either by themselves or by an external stimulus.
Is everyone born with self-motivation or drive? Many people think the right answer to this is yes. But if they don’t, they can be motivated because motivation is a skill which can and must be learnt since it is essential for any business to succeed and prosper. Many companies think that the best way to solve motivation and morale problems is to offer employees more money and financial motivation can take the form of bonuses, salary hikes and overtime or increased benefits. However, having said this, motivational problems are seldom related to money. The main reason why employees leave an organisation or become disillusioned on the job is often related to the way they are treated on a day-to-day basis at their workplace. So money is not always the reason.
Job performance and productivity
Job performance and productivity of the workforce or of individual employees is the mix-and-match of the employee’s abilities and the employee’s motivation. The employee’s ability depends on a number of factors including education, experience and on-the-job training. Changing this is a long and slow process and requires working slowly and surely with the individuals in order to ameliorate and strengthen these abilities.
On the other hand, motivation can be improved far quicker. Many companies use the famous seven strategies to ensure motivation in their workplace. These are: positive reinforcement, effective discipline, treating people fairy, satisfying employees’ needs, setting work-related goals, restructuring jobs and basing rewards on job performance.
The right dose of the employees’ abilities and their motivation is the right key to improve productivity at the workplace and even on a national level. That is why lifelong learning and constant training and education are important for any workforce. The need to constantly improve productivity is something in which all of us, whether employers or employees, have a vested interest in as it is the key factor that drives our living standards upwards. It might be strange to link this to the fact that high standards of living are good for us because those who enjoy these high standards tend to be healthier and live longer.
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