PRODUCTIVITY AND PERFORMANCE IN AN ORGANISATION

Submitted by,Ashwin Kumar Roy S

1st M.F.Sc. Seafood Safety and TradeSchool of Industrial Fisheries

CUSAT

INTRODUCTIONHistorically, the term is believed to have been

used for the first time in 1776 by the economist Quesny.

Towards the close of 19th century it was understood as “the faculty to produce”.

According to Peter Drucker, productivity is defined as “that balance between all factors of production that will give the greatest output for the smallest effort.

Productivity may be described as a relationship between output and input.

It is the ratio of output to the input.Symbolically, P= O/I , where P= productivity,

O= output, and I= input.The output may be measured in terms of the

units of goods or the value of goods and services, while input refers to combination of the raw materials, machinery, worker’s time, power, effort

LABOUR PRODUCTIVITYThe productivity of labour is the ratio between the

output and the number of man-hours workedSymbolically, PL= O/MHPL= productivity of labourO= output in terms of units or quantity or valueMH= number of man-hours spent on productionMan-hours= the number of workers employed on

production X the number of hours worked.

PRODUCTIVITY OF OTHER FACTORSProductivity of machine= total production in

length, weight etc./ machine-hours workedProductivity of material= weight or volume

or number or length of finished goods/ weight, volume, number, or length of raw material used

Productivity of land( generally used in agriculture)= total production/ area of land used

MEASURES OF PRODUCTIVITYGenerally the productivity of labour is

measured in the following ways:1. Labour cost per unit of output2. Output per man-hour3. Static4. Dynamic5. Partial factor6. Multi-factor7. Total factor

The labour cost per unit output: is ascertained by dividing the total wages paid to the workers by the number of units produced by them.

The output per man hour: is the ratio between the total Work Load Units (WLUs) by total available man hours. The output per man-hour method is widely used measure in labour productivity.

Static: P= O/I in a given period of time

Dynamic: P(1)=O(1)/I(1); P(2)=O(2)/I(2) then P(2)/P(1) yields a dimensionless index that reflects change in productivity between periods. ((P(2)-P(1))/P(1))*100 yield the percentage change between 2 periods.

Partial Factor: Uses a single Input factor, e.g.: output per labour-hour

Multi Factor: Use more than one Input factors e.g.: output per direct cost (labour, materials and overhead)

Total Factor: Uses all Input factors

One man-hour is the expenditure of one hour of time on the job by one person regardless of the output.

Man-hours are of three types:

1. Paid man-hour2. Worked paid hour 3. Actual worked hour

1. Paid man-hour: This is represented by the ratio of workload units to total technical, clerical and assistant time in hours, for which employees are being paid, whether or not the employees are on site. It determines cost-effective use of personnel. It identifies the overall productivity of all employee resources dealing with the workload.

2. Worked paid hour: Total paid man-hours – total paid man-hours not worked.

3. Actual Productivity : It is based on actual worked hours. It is useful to assess the impact of non-workload activity. Total actual worked hours =total worked hours– paid hours devoted to untimed activities. Untimed activities include: Breaks (coffee breaks, lunch breaks), training others, ordering and inventory of supply, preparing monthly activity reports, staff meetings.

FACTORS AFFECTING PRODUCTIVITY1. TECHNOLOGICAL DEVELOPMENTThe Plant : The size of the plant and the

capacity utilization will have a direct bearing on productivity. Production below or above the optimum level will be uneconomical and will tend towards lower levels of productivity.

Research and Development : Investment in research and development may yield better methods of work and better design and quality of products.

Plant and job layout : The arrangement of machines and positions in the plant and the set-up of the work-bench of an individual worker will determine how economically and efficiently production will be carried out.

Production processes : Advanced production processes involving the use of integrated and automatic machinery and semi-processed materials have been known to help in raising levels of productivity.

Power, raw materials etc. : Increased use of power and improvement in the quality of materials have a favorable effect on productivity.

Scientific management techniques : Better planning of work, simplification of methods, time, emphasis on need for reduced wastage and spoilage are some of the contributions of the scientific management movement to the cause of higher productivity.

IMPORTANCE OF PRODUCTIVITYReduction in the cost of raw materials (through

increase in the productivity of raw materials)Reduction in labour cost per unit of output.Reduction in overheads and power costs per

unit of output. Reduction in the price of goods.Increase in wages and salaries (through

schemes for sharing the gains of productivity)Increase in the reserve fund that can be

utilized for expansion and modernization.

Better standards of living for people through increase in their incomes and improvement in the quality of goods that can be made available at cheaper prices.

Increase in the competitive strength of the country in export market through reduction in cost of production and improvement in quality of output.

PERFORMANCEIt has been emphasized that the human

factor is a critical factor in the success of an enterprise or an industry.

The employees’ attitude and performance have an immense bearing on productivity.

Job performance of employees is broadly determined by three factors:a) Abilityb) Motivationc) Physical condition of work

ABILITYThe ability of an individual employee to perform well on his job is of fundamental importance in productivity.

The personal factors which govern the prerequisite of higher productivity are knowledge and skill.Knowledge is acquired trough training, education and

interest on the part of the learner, that shows how important education is for higher productivity.

Skill is affected by aptitude, personality and also by education, experience, training, etc.

A person who is deficient in knowledge and skill is likely to be less productive than a person who is normal in these respects.

MOTIVATIONThe willingness of the employee to work for an organization is related to his productivity in an important way.• The motivation of an employee will depend

upon the organization, structure, leadership, need satisfaction and influence of trade union.

• Some of the features of the formal organization which influence motivation are delegation and decentralization, organizational efficiency, job evaluation, training, and provision for two-way communication etc.

TYPES OF MOTIVATIONPositive MotivationPositive motivation or incentive motivation is based on

reward. The workers are offered incentives for achieving the

desired goals.The incentives may in the shape of more pay,

promotion, recognition of work, etc.According to Peter Drucker, “the real and positive

motivators are responsible for placement, high standard of performance, information adequate for self control and the participation of the worker as a responsible citizen in the plant community”.

Negative MotivationNegative or fear motivation is based on force or

fear.In case, they do not act accordingly then they may

be punished with demotions or lay-offs.The fear act as a push mechanism.This type of motivation causes anger and

frustration.It generally becomes a cause of industrial unrest.

In spite of the drawbacks of negative motivation, this method is commonly used to achieve desired results. There may be hardly any management which has not used negative motivation at one time or the other.

TECHNIQUES OF MOTIVATION

PHYSICAL CONDITIONS OF WORKThe importance of a proper work environment

and physical conditions on the job has been emphasized by industrial psychologists and human engineers.

It is important that the work environment ensures the greatest ease at work through better ventilation, better lighting, improved safety devices, reduction in noise, etc.

Equally important is the introduction of suitable rest-pauses to enable the men to recoup their energy lost in continuous work.

Thank you