In business, productivity refers to how efficiently factors of production (or resources such as time, labor, capital and raw materials) are converted into outputs like goods or services. It essentially measures the relationship between what you put in (inputs) and what you get out (outputs).
General ways to improve productivity
In general, there are two main ways to increase labor productivity.
Firstly, increase Total Output with the same number of workers meaning that each worker needs to produce a greater output. Secondly, keep Total Output at the same level but with fewer workers.
Additionally, it is also possible for a business to increase labor productivity, but to reduce Total Output too. This will require the business to reduce the size of the workforce, but by a smaller proportion than the reduction in output, when demand is falling.
Detailed way to improve productivity
Frederic W. Taylor’s scientific approach to motivation enables the business to improve output per worker or productivity. He established an idea (a hypothesis), studied and recorded performance at work, altered working methods and rerecorded performance.
Here is how to do that in seven steps:
- Select workers to perform a task.
- Observe them performing the task and note the key elements of it.
- Record the time taken to do each part of the task.
- Identify the quickest method recorded.
- Train all workers in this quickest method and do not allow them to make any changes to it.
- Supervise workers to ensure that this ‘best way’ is being carried out and time them to check that the set time is not being exceeded.
- Pay workers on the basis of results based on the theory of economic man.
This approach aims to reduce inefficiency in the workplace by finding the quickest method of performing each task and then training all workers to use this method.
In short, Taylor’s approach offered a specific perspective on motivation, focusing on financial incentives, efficiency and standardization in order to improve productivity in a workplace. However, it is important to understand its limitations and consider the broader aspects of motivation in today’s work environments.
