- Basic for effective business
- Performance formula
- Other ways to evaluate performance
- Improve productivity
- Staff Efficiency Reserves
- National peculiarities
Productivity is a measure of work efficiency. At the same time, this indicator is used both to assess the fulfillment of tasks by the personnel of a firm or enterprise, and for the functioning of machine tools, personal computers, their components and individual software. Usually, productivity is understood as the amount of production or the amount of information processed per hour, minute or second. Its reciprocal, labor intensity, reflects the time it takes to produce or analyze data.
Basic for effective business
The key issue on the agenda of any enterprise is the growth of labor productivity, that is, reducing the time spent on manufacturing products and increasing the volume without additional costs for hiring new workers. Therefore, the strategy and the goals and objectives based on it should take into account the main reserves for its increase and the factors that encourage staff to work better in a qualitative and quantitative aspect. Without this, no competitive advantage will be able tomake the enterprise a leader in the industry.
Economic statistics studies the efficiency of an enterprise using a number of indicators. The main ones are production and labor intensity. Actual productivity is just the amount of products produced by the enterprise for a certain period of time. If we designate Q as the output of goods, T - labor costs in hours, then we can draw up a formula. So productivity is the product of Q and T, or P=Q x T.
The result reflects the real efficiency of the enterprise. For forecasts, cash productivity is calculated. This allows managers or a leader to understand what is the maximum volume of products that an enterprise can produce at a given stage of technology development. Additional costs and downtime are not included in this formula.
Other ways to evaluate performance
In the sectoral economy, the assessment of labor productivity (LT) is carried out using two methods: direct and factorial. For the first method, the following indicators are needed: output in the current (O1) and base (O0) periods, as well as the number of personnel corresponding to them (N1 and N0, respectively). So
PT=(O1 x N0/O0 x N1) x 100-100.
When factoring is used, productivity is an indicator that is calculated in several steps. The first step is to classify the parameters. Factors are divided into groups:organizational and technical, volumetric and structural. The first parameter is related to the release of employees and is equal to the ratio of the number of employees in the current period and the difference - compared to the previous one - as a percentage.
Labor productivity by volume factor is determined by the product of the growth in production and the share of permanent workers (in total) as a percentage, divided by 100. The structural component is equal to the result of multiplying the labor intensity by the share of this product in the total output. Overall productivity is determined by adding the growth for each of the three factors.
The basis of any business is the rational and efficient use of available resources, including labor. It is quite logical that management seeks to increase the volume of output without additional costs for hiring workers. Experts identify several factors that improve performance:
- Managerial style (the main task of a leader is to motivate staff, create an organizational culture that values activity and hard work).
- Investing in technical innovation (purchasing new equipment that meets the needs of the time can significantly reduce the time spent by each employee).
- Trainings and advanced training seminars (knowledge of the specifics of production allows staff to participate in the improvement of the production process).
Staff Efficiency Reserves
As the productivity formula shows, this indicator is not constant, but can be adjusted by a number of factors. Among them, the main place is occupied by technical progress and the correct organization of labor. Improving the technical component of production, complex automation of functional processes and establishing communication between individual departments can reduce the time spent on production. On the other hand, the growth of labor productivity can be achieved through the application of scientific management methods. However, it is important to understand that an increase in this indicator does not always improve the efficiency of the enterprise as a whole. This is due to the fact that, according to classical economic theory, the factors of production, along with labor, are raw materials (land) and capital.
Production in the economy is the main object of study at the international level. Since in most developed countries of the world there is an aging of the population, then an extensive way of its expansion becomes impossible. Therefore, management turns to an intensive increase in labor efficiency. In terms of productivity growth, Russia is ahead of the G7 countries, Central and Eastern Europe. This indicator for the Russian Federation averages 4%. However, now the pace has begun to gradually slow down, which is associated with an incorrectly chosen model of economic growth.
In 2003-2008labor efficiency improved by 6%, and in 2014 - only by 0.8%. At the same time, productivity in various industries is growing unevenly, so experts suggest that high unemployment can become a factor in overcoming the crisis. This is due to the fact that the dismissal of workers in low-profit industries will lead to the overflow of the labor force into more efficient segments of the national economy.