Labor productivity: measured by the ratio of the real volume of the product and the efficiency of human labor

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:39

From year to year and even from generation to generation in our country calls are made and tasks are set to increase labor productivity. This is the most important integral indicator that comprehensively reflects the result of all aspects of the company's production activities - management organization, employee motivation, applied technologies, and the level of development of human capital. With a certain stretch, this concept can be called the quality of labor. So what is it, what indicators measure labor productivity.

Important, but not the main one

In general terms, labor productivity is the quantity of a product of a given quality produced over a certain period of time. But at the same time, the product must be in demand. Otherwise, there is a repetition of the story of Sisyphus, hard, long and tediously rolling his stone uphill, that is, performing meaningless actions at the cost of considerable effort. There is no benefit in measuring this kind of performanceactivities.

The product is still primary, but how quickly and with what efforts it is produced is the second question. It makes no sense to do things that no one needs with high labor productivity, settling dead weight in a warehouse or being sold only and exclusively under powerful administrative pressure. However, this often happens very often when decisions are made under conditions of monopoly, in a non-market way and with funding from budget money.

Views

Usually a distinction is made between individual labor productivity and social productivity. The first characterizes isolated production elements, starting with an individual worker and a separate enterprise, the second characterizes the whole society, that is, the whole country.

Labor productivity is measured by the ratio of the amount of labor product to the time spent on its production. This assessment can be both cost and expressed in physical terms, for example, in pieces or tons. In general, the formula is the quotient of the amount of work divided by the amount of time spent on this work.

Scorecard for enterprise and employee

At each enterprise, the level of a number of indicators is constantly assessed. Here, labor productivity is measured by the ratio of various inputs. All of them are considered and analyzed in dynamics for different periods of time. The most common are estimates of labor productivity as indicators of production and labor intensity of manufacturing products.

At the same time, there arethree main methods of evaluation: natural, cost and normative. With the natural method, physical counting units of production (pieces, tons, etc.) are taken into account. With the cost approach, the monetary value of the product produced is estimated. The normative method is used in cases where it is required to evaluate productivity at intermediate stages, that is, at sites and workshops where unfinished products are manufactured.

Formulas

Production per worker shows the amount of output produced by one employee for a certain period of time. The time period can be a day, a shift, a month, or a year.

Production is determined by the following formula:

V=OP / H or V=OP / PV, where:

OP - volume of production;

H - the average number of employees for the period;

FV - working time fund for the period.

Labor intensity, as an indicator of labor productivity, is measured by the amount of labor costs per unit of output, usually in physical terms. The formula looks like this:

Tr=FV / OPN, where:

FV - working time fund for the period;

OPN - the volume of production in physical terms.

With the normative method, the estimated labor costs (standard hours) are compared with the actual ones. It is easy to see that the above formulas are quite simple. Labor productivity is measured by the ratio of two quantities: the labor expended and the output obtained as a result. Since in modern enterprises, as a rule,the number of main production workers is much less than other categories of employed personnel, the full number of employees, and not just those directly employed in production, began to be used in calculations. This approach allows you to get a more objective picture.

The state of affairs in the country

Social labor productivity is measured by the ratio of the produced gross domestic product to the population employed in the manufacturing sector. According to this indicator, Russia is seriously inferior to other developed countries. The data is shown in the following chart:

At the same time, according to the average number of working hours, Russia is, as it were, in the forefront. In other words, we produce less and work more. The situation is clearly not normal. Below is the country data for this issue:

Factors for increasing labor productivity

Since labor productivity is measured by the ratio of product to time spent, the answer is banal and obvious. It is necessary to increase production and reduce the operating time. It sounds extremely simple, but gives off demagogy. The level of this indicator depends on many factors, which can be conditionally divided into external and internal.

External factors include climatic and natural conditions, as well as the logistical situation, that is, the distances between individual producing entities. All these factors, for obvious reasons, in Russia do not contribute to a radical increaseeconomic indicators, although, as the experience of the Scandinavian countries shows, they are not a fatal obstacle.

If external factors are an objective reality that is poorly manageable and controllable, then internal factors are something that can be managed and with the help of which tangible results can be achieved. These factors include both the general economic situation (the level of investment, tax and monetary policy, inflation expectations, etc.) and microeconomic parameters that affect the activities of enterprises. First of all, they include:

• degree of introduction of innovative technologies and products and, most importantly, readiness and desire to do it;
• the level of organization of production based on rationality and the elimination of unnecessary, useless actions and phenomena;
• motivate employees to create a link between performance and reward;
• the quality of human capital, which includes the qualifications, level of education and general culture of employees, the meaningfulness of their actions and the minimization of paternalistic expectations, combined with a certain ambition.

This list is almost endless, but even understanding what needs to be done does not always come with an understanding of how to do it.

Unfortunately, this process has been seriously delayed in the country. The result is unsustainable growth with a stagnation trend, as shown in the chart above.