What are the basic objectives of productivity measurement? Explain different kinds of productivity measurements.
A Objectives of Productivity Measurement:
To study the performance of a system over time.
To have a relative comparison of different systems for a given level.
To compare the actual productivity of the system with its planned productivity.
Kind of Productivity Measurement:
Land Productivity: The productivity of land and building is said to have increased if the output of goods and services within that area is increased.
Material Productivity: Output can be measured in total quantity produced and material can be measured in terms of the cost of material required to produce that output.
Material productivity = Number of units produced Cost of material/Cost of material
Labour Productivity: Output can be measured in total quantity produced and labour can be measured in total man-hours required to produce that output.
Labour productivity = Number of units produced /Man hours utilized
Machine Productivity: Output can be measured in the total quantity required produced and machine can be measured in total machine hours required to produce that output.
Machine productivity = Actual Output/Actual machine-hours utilized
Capital Productivity: Capital productivity may be described as the ratio between the amount produced and the amount of capital used for that production.
To measure productivity we have to think in terms of time since it is the output of goods or services from a machine or from a worker in a given number of machine-hours.
So, capital productivity is the ratio of turnover to total machine hours required to produce that turnover.
Capital productivity = Turn Over/Actual machine-hours utilized