Productivity measurement in organisations, Operation Management

Assignment Help:

Productivity Measurement

In Productivity measurement, we identify the factors affecting productivity and divide them into two major categories: external and internal. We identify the various components making up these factors and briefly outline the way in which they affect productivity. Productivity is a widely used (and abused) term, normally associated with either national productivity, for example reports of rising and falling national and international gross national product (GNP) values or with company productivity, for example how competitive one industry or another has become over a period of time. Often television reports refer to productivity in relation to labour efficiency. In particular direct labour may be highlighted. Despite the amount of media attention that the term productivity receives, the concept is not widely understood. Let's try out some popular (mis)conceptions. Do you consider the following statements to be accurate or inaccurate?

  • 'Productivity equals labour intensity'- meaning where there is high labour input, there must be low productivity or where there is a high degree of automation there must be high productivity!
  • 'Productivity is solely a measure of labour productivity' - meaning, usually that we use the term productivity in relation to direct labour.
  • 'Performance can be measured solely by output' - meaning if the company made a profit, then this is a sufficient measure of performance - assume the profit were $2m - is this good? If you were told the company was IBM what would your reaction be then?
  • 'Productivity equals profitability' - meaning that one term is synonymous with the other.
  • 'Cost cutting improves productivity'.
  • 'Productivity applies only to the manufacturing sector'.

 

These statements expose some of the misconceptions surrounding productivity. All of the above statements are wrong except one. 'Cost cutting improves productivity' is in fact correct. By reducing costs we can increase productivity. It is a very common strategy adopted by many companies. As profit margins reduce due to flattening or reducing sales, attention turns inwards to reduce costs. It is not unusual to see or hear statements related to manufacturing industry or labour productivity when the media (particularly TV) reports national economic performance usually referring to 'manufacturing productivity'. There has yet to be equivalent attention paid to the service sector which constitutes around 75 per cent of GDP in most developed countries. It might be the same inside a manufacturing company if one considers the shop floor staff. They might have the term productivity used to refer to their collective output, but the office professional staff have no such measure, despite the fact that direct labour costs might be 5 per cent while overhead costs constitute as much as 40 per cent of all costs.


Related Discussions:- Productivity measurement in organisations

Flexible work schedules in their organizations describe, What can HR manage...

What can HR managers do to help facilitate flexible work schedules in their organizations?

Explain minimize make span in a two machine flow shop, Please explain your ...

Please explain your answer- Johnson's rule gives the optimal answer for which of the following type of problems? A) Minimize make span in a two machine flow shop B) Minimi

Explain changes in the environment, What changes in the environment provide...

What changes in the environment provided the opportunity for the Dewmocracy approach?

Define what behavioural predictions might you make, What behavioural predic...

What behavioural predictions might you make if you know that an employee had an external locus of control? If an employee had a high need for achievement? If an employee had a low

Resource utilisation & work in progress in organisation, What effect does y...

What effect does your organisation's facility layout have on the following (where appropriate): inter-process movement; health & safety; congestion; resource utilisation; work-in-p

Describe main motivational theories described in the text, There are a vari...

There are a variety of theories of motivation, many of which are complementary. Of the main motivational theories described in the text, which theory or theories do you think would

Thus what exactly is a high performance organization, So what exactly is a ...

So what exactly is a high performance organization? Is this just another "buzz word" that American managers need to pay lip service to? Is there really any merit to having the crea

I need to cancel my order i made earlier today, I want to cancel my order I...

I want to cancel my order I made earlier today. How do I do this and get a full refund?

The central evaluation unit case study with answers, Summarize the problems...

Summarize the problems of the CEUPU process and suggestions you make to Veronique to improve her process

Examples of variations - operations function, Examples of Variations - Oper...

Examples of Variations - Operations Function Volume                                                                                                 Low: Small quantities

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd