productivity Flashcards
define productivity
the amount of output that can be produced with a given input of resources
labour productivity
output per worker over a period of time
calculation for labour productivity
output in given time/number of workers
capital productivity calc
ouput / amount of capital employed in a given time period
factors influencing productivity
- specialisation of labour
- division of labour
- education and training
- motvation of workers
- capital intensity
- how flexible workers are in different jobs
capital productivity
how much capital is being used, like machinery etc
productivity tends to increase when there’s been advancements in technology and a business becomes more capital intensive
productivity and competitiveness
more productivity = more output = lower cost per unit = lower prices = more sales
efficiency
making the best possible use of all business resources, production is efficient if costs are minimised
factors influencing efficiency
- outsourcing (specialised work at a lower cost)
- relocating (cheaper labour/rent)
- downsizing/delayering (cut costs for staff)
- investing in new technology (new machinery may be quicker)
- lean production
- kaizen (continuous improvement)
- JIT
difference between labour and capital production
labour: people
capital: machinery
how can you improve productivity
- increase capital
- motivate workers
- train workers so they are highly skilled
what are some issues of increasing labour productivity?
- focusing on high output can affect the quality of the performance, like customer service
- more mistakes are likely to occur
benefits of increasing productivity
- improves competitiveness (cost per unit reduced)
benefits of increasing capital
- more efficiency
- don’t have to spend money on wages
- machinery works 24/7
