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Productivity

Productivity is a very important measure on several diverse levels. Whether it’s individual, company, or national productivity that’s being measured, it’s a robust indicator of what the output is on each of those levels, capable of predicting the future of each factor.

It is considered that good and increasing productivity leads to greater prosperity for both the individual and the group they belong to.

The Definition of Productivity

Productivity describes the ratio of total output to input or all input factors used in a production process. This is usually represented as output per unit of input, typically over a specific period of time.

In other words, productivity is a measure of all the resources invested in creating some specific output, where time is always an important factor. The definition of productivity also takes efficiency into consideration and the eternal struggle between the two. The optimization of productivity means optimizing efficiency as well, and finding the right balance leads to the most effective results.

Types of Productivity

Productivity Improvement

Factors Affecting Productivity

Productivity vs Efficiency

Types of Productivity

Discussing different types of productivity can be observed as an act of determining the factors that are taken into consideration when measuring productivity. In other words, depending on what factor is used to express productivity, different results will be yielded. For that reason, most of the time, there are considered to be three types of productivity: labor, multi-factor, and total productivity.

Labor productivity. While it would be quite reasonable to object that it is not prudent to single out labor when there are so many different factors at play when measuring productivity, the reason why it’s emphasized is that labor productivity is the factor most commonly used by companies to estimate output. This partial indicator of productivity is extremely useful since it’s a realistic representation of the current economic growth and quality of life. The way in which labor productivity is measured usually involves the ratio between output and the labor input, which are usually hours worked.

Multi-factor productivity. When more than a single input is considered, we’re talking about multi-factor productivity. Whether it is raw materials used in the production or actual capital invested in a product, multifactor productivity takes them into consideration, often using their values in accounting.

Total factor productivity. As the very name of this type suggests, total factor productivity takes all of the input AND output factors into consideration. The only time this productivity measure can omit an input is when the input in question is available without limit, which makes it relatively unimportant to take into consideration when determining the income formation of the production process.

Sometimes, a fourth type is to be considered, referred to as the marginal type of productivity. It involves increasing one of the inputs while keeping the rest unchanged, resulting in additional production.

Types of productivity are strictly related to company practices and there’s little to be gained from discussing them on an individual level.

Productivity Improvement

When discussing productivity improvement, it is important to make a difference between individual and business improvement. Naturally, by increasing the output of every discrete unit inside a company structure, the overall output would increase, but the methods employed to help an individual improve are very distinct to those targeted at the general success of the company.

Individual Productivity Improvement

When individuals strive to improve their productivity, they have an amazing set of tools and methods at their disposal. Taking into consideration the diversity of human beings, it’s safe to say that there are less universally acceptable methods in comparison to well-tested strategies that can work out for most companies. However, with so many methods available to individuals, they’re bound to find some that can work wonders for them.

Deep work. Freshly-coined method of working, deep work is the most universally successful way of elevating productivity by getting rid of all the distractions. In its core, deep work is a full concentration mode that lets individuals output more in shorter bursts (usually 90 minutes) by getting rid of all the nuisances such as smartphones, emails, chat services, and all other sources of distraction.

Avoiding perfectionism. There’s hardly a greater productivity killer than perfectionism. For an individual to avoid loss of productivity due to constantly striving to provide the perfect and flawless piece of work, it’s important to realize that getting the job done is more important than doing it without error. This is especially true if the task in question is the one that can be rechecked at a later time.

Stop multitasking. For a long time, there was a popular opinion that the ability to multitask correlates to greater success in the business world, and thankfully an opinion which has been largely debunked. Appearing busy is all well and good to make one LOOK like they’re doing a lot of work, but in reality, productivity is suffering at the hands of divided attention.

Set realistic goals. Technically, setting goals is part of deep work, but by providing oneself with self-set deadlines (even without the intention of going “radio silent” for the sake of deep work), the productivity can get a noticeable boost. Realistic goals reward the individual with feelings of achievement and success while reducing the workload at the same time.

Two-minute rule. If a task can be done under two minutes, it should not be postponed under any circumstances. Getting it out of the way makes more room in a tight schedule and also reduces mind clutter - that is, no mental processes will be devoted to such a short task anymore.

Deliberate breaks. Taking a break is just as important as working. However, instead of walking around every five minutes, set a deliberate time period when it’s necessary to wind down. Avoid taking breaks outside of this specific period (or periods).

Company Productivity Improvement

Unlike individual productivity improvement, companies have rules and robust methods that can set their productivity straight regardless of their business model. The steps outlined here can help both large and small, young and well-established companies.

Deliver value. All the productivity in the world won’t matter if there isn’t enough demand for it. Companies sometimes forget this and focus solely on churning out goods and “setting records” and then scratch their heads in amazement at why the sales are down. In the ever-changing world, staying in touch with the target audience can make or break a business.

Constantly improve. It’s safe to say that no approach is ever perfect. By recognizing this, companies can strive to do better by either following in the footsteps of those who are already doing better or by experimenting and trying out new things.

Invest more. Investing more into people, equipment, and advertisement can really take the productivity in a whole new direction. Whether it’s investing in more competent managers, worker training and benefits or simply upgrading the production floor, dedicating more resources to the very sources of company productivity can make the change for the better.

Waste not. Avoiding wasting time with endless meetings, asynchronous processes, and a lack of communication. Recognize what the greatest timesinks are and how to avoid them most efficiently. With less time squandered on irrelevant and time-consuming tasks, more will remain to actually better company productivity.

Factors Affecting Productivity

The factors affecting productivity are great in number and vary from company to company. However, regardless of the jurisdiction and actual physical location of the company, there are several factors that span different businesses and prove to be of inherent importance.

Human Factor. Quite obviously, one of the most important factors that affect the productivity of any business are its employees. People have proven time and time again to be just as important as having all the right equipment, but to truly have an inspired workforce, the company has to be fair-minded and considerate of its employees. Various variables affect the productivity of the workforce and they’re all equally important. To begin with, the physical and mental health of employees should always come first, followed by a motivated workforce. The real motivation is not easy to achieve and relies on people being treated with respect, but also on a smart division of labor. Employees excel when they’re doing what they do best, and managers should wisely divide who’s doing what. Finally, competence and skillfulness play a big role in the overall productivity of the employees, which is why it’s crucial to educate them and give them the proper knowledge necessary for the particularities of their job.

Equipment. Next up is a factor just as important as a steady, reliable workforce - equipment. Proper equipment is crucial to getting the job done and it is the factor often responsible for a loss of productivity. By “proper” equipment, it is considered to have up-to-date technology that has been correctly set up and in such a way, that production can “flow” naturally. The layout of the production floor should be cleverly devised so that efficiency can be maintained. Oftentimes, companies try to save up by relying on outdated and malfunctioning equipment that will sooner or later break down, taking productivity with it, and eventually doing more harm to the company budget than a simple fix (or replacement) would.

Management. Similar rules apply here as they do on the rest of the workforce. The managerial layer has a direct correlation with having a motivated workforce with the right attitude, but the role of the managers does not end there. The creativity, intelligence, sincerity, and competence in problem-solving are traits that separate good managers from the average ones. The greater the self-sufficiency of the manager, the faster the problems will be solved and overcome, leading to more productivity at the workplace, accompanied by happier workers who know that there’s a person they can count on.

Finances. Ultimately, none of the factors above can have a truly positive impact on productivity unless there’s enough financial backbone to support them. The lack of finances can lead to some poor decision making from the higher-ups, starting a domino effect that will negatively influence productivity and eventually harm the entire company.

Productivity vs Efficiency

In the world where words such as productivity, efficiency, and workflow are tossed around rather liberally, with little to no attention given to understanding them, it comes as no surprise that few can actually divine the meaning of these utterances. If many people where to be asked about the difference between productivity and efficiency while off-guard, they’d say that it is the same thing.

The truth could not be further from it, and it is something that plenty of managers are acutely aware of. There’s a thin line between the two, and it’s undeniable that they’re tightly connected to each other. But to say that they’re one and the same would be wrong, and here’s why.

The easiest way to differentiate productivity from efficiency is to look at the former in terms of quantity, and the latter as a representation of quality. While it may be too narrow to divide the two among these lines, it’s what it boils down to in the end.

To be primarily concerned with productivity is to care about the quantity of the output. It is usually compared with certain time periods or other resources to measure whether the output is increasing or going down. For example, producing 10,000 units of goods in May against 9,200 units in April shows an increase in productivity.

Efficiency is a more complicated concept to understand. Unlike productivity, which is a measure of the output and output alone, efficiency tackles more sensitive information such as the use of raw materials, labor, and time to achieve a goal. In other words, efficiency is considered with making sure that the use of the aforementioned resources is maximized and that none of it goes to waste. Instead of worrying just about the output, efficiency takes input into consideration as well.

It goes without saying that both productivity and efficiency are equally important and that the goal of any sensible company is to optimize the two so as to achieve the best output with the most appropriate amount of resources and churn out the least amount of defected goods.

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