Frederick W. Taylor in his “Task Study” said, “Human work Can be made infinitely more productive not by ‘working harder’ but by “working smarter’. Productivity means the economic yield from:
Each factor of production (land, labour, capital and organisation) Each input (raw materials, fuels, time and knowledge)
An overall yield of the joint factors and resources enumerated above in combination.
Productivity denotes the efficiency with which the various inputs are converted into goods and services. However, it is a multi-faceted concept; no single definition can fully describe it. Technically, it signifies the ratio between the input and output. Productivity is said to be high when more output is derived from the same input, or the same output is obtained from a less input. It is well understood as the ratio of output to input with respect to given resources.
When more is produced with the same expenditure of resources it may be termed as effectiveness; when the same amount is produced at less cost it may be termed as efficiency. The word productivity is broad enough to cover both. It should be recognised that the long-term productivity improvements can be achieved by the human factor through positive and innovative attitudes. In this sense productivity is an attitude of mind’ which is intolerant of waste of every kind and in any form.
Productivity does not refer merely to work systems but to the development of right attitudes and a strong concern for efficiency.
Efficiency, maximum output, economy, quality, elimination of waste and satisfaction of human beings through increased employment, income and better standard of living are some of the objectives of productivity movement in our country or for that purpose in any other country. There are several concepts of productivity. Two of them are of relevance here, labour productivity and total factor productivity. Labour productivity is the ratio of the output produced by a firm, industry or nation to the number of worker-hours employed in producing this output.
Total factor productivity is the ratio of the output to the total input needed for its production, including not only worker-hours and capital, but also any other input that might be involved. This might be the investment made in human beings to raise the quality of labour or that made to improve productive knowledge through research and development, or by the introduction of organisational, managerial and social innovations.
Total factor productivity is clearly a more accurate indicator of the economic efficiency of a firm, industry or nation than labour productivity. However, mainly because of the difficulties involved in quantifying various intangible inputs to total factor productivity, labour productivity is far more widely used. It is important to bear in mind that labour productivity, is affected not only by capital input, but also by other factors, which affect the efficient use of both capital and hours of work. These other factors consist not only of investment for education, training, research and development, but also of non quantifiable factors such as the labour relations climate and worker and management attitudes towards productive efficiency and competitiveness.