Productivity:

Three enlightened measures of productivity are as follows:

 Total Head Count Productivity (HCP) = Units Produced /Total Number of Employees ------ (1)

Employees may be Direct, Indirect, and Administrative.

Units per Payroll Rupees = Units Produced/ Total Payroll Rupees ------ (2)

Value added per Employee

= Sales - (cost of material, supplies, contracted work) / Total Number of Employees    ------- (3)

The specific feature of these measures is that they removal the usual direct-versus indirect-labour distinction that push managers to treat direct labour and overhead costs as completely separable and to overly focus on direct labour.