Directorate of distance education master of business administration

Productivity
 
Productivity might be described as the rate of production per unit 
of input expenditure involving time and cost. Some describe productivity 
as the judicious use of productive resources-physical as well as mental. 
It is the numerically stated measure of how well an operations system 
functions and an indicator of the efficiency and competitiveness of 
a single firm or department.  Productivity is used by people to mean 
different things. To the employers, productivity means lower and lower 
costs. To the employee it could mean harder and harder work, and 

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therefore lesser real wages than the past years for work of equal intensity 
and hardship.
Productivity is considered to be a function of factors like physical 
factors, situational factors and individual factors. An employee’s 
productivity is determined by that person’s motivation and ability 
to perform a task.  In case of teamwork, a group’s size, compositions, 
norms, interpersonal understanding, cohesion and its leadership would 
determine the group’s productivity.  In the same way, an organization’s 
productivity would depend on its culture, climate, leadership, vision and 
missions, learning and entrepreneurship. The exponents of productivity 
regard labour productivity as one of the basic rods of measurement of 
economic development and as one of the key determinants of national 
income. 
Tom Peters and Waterman, the specialists on organizational 
excellence, have paid due emphasis on productivity improvements that are 
achieved through people. According to them, progressive organizations 
would treat the ordinary members of the organization as the basic source 
of productivity and quality gains. These organizations do not regard 
capital investment and labor substitution as the fundamental source 
of productivity enhancement. Their people orientation is marked by 
performance consciousness, but the personal achievements stem mainly 
from developing mutually high expectations and peer review rather than 
exhortation and complicated command and control systems. They work 
very hard to cut the need for intrusive forms of corporate management, 
believing that the less of direct intervention from higher management 
the better it is for the productivity of the organization. 
Peter Drucker (2002), the renowned Management Guru identified 
different types of productivity such as plant productivity, material 
productivity, financial and capital productivity, machine productivity 
and human productivity. Human productivity is further classified as 
managerial and labour productivity. He has emphasized productivity 
through the following statement “A productivity measurement is the 
only yardstick that can actually gauge the competence of management 
and allow comparison between managements of different units within 
the enterprise, and of different enterprises”.  

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Poor productivity is the result of several factors like lack of 
adequate planning, failure to be proactive in preparing for alternatives, 
incompetence, insufficient training, weak discipline, low standards 
and disharmonious relationship between the employer and employees. 
Other phenomena that could result in productivity problems include de-
motivation, lack of commitment towards job and organization, tolerance 
towards wasteful practices, bloated human power, nepotism, impeding 
bureaucracy, dysfunctional competition, conflicts and alienation among 
employees. Inadequate office support, lack of proper equipments, 
shortages of supplies, excessive reporting requirements and unpredictable 
workloads are also common situational constraints.
Productivity could also be affected by certain restrictive practices 
which might be in the form of outmoded, irrational or unreasonable 
rules or customs which unduly hinder the efficient use of labor. At times, 
work groups might seek to maintain traditional rights and prerogatives 
in the context of changed circumstances and technological advance. 
Some times, wage-productivity linkage might have to be examined for 
commensurability. Hence it might not be worthwhile for any manager to 
aim straightaway at productivity improvement without addressing these 
underlying impeding factors. 
Productivity in certain cases might also be impaired due to 
human causes. This might include pressures from co-workers to limit 
one’s performance in order to check work targets from shooting up or 
prevent downsizing. Inadequate performance by co-workers could also 
affect a person’s productivity if the latter is an internal customer of the 
former. There could be situational constraints due to colleagues in the 
form of turnover of key personnel and absenteeism. Elton Mayo, the 
father of Human Relations ‘School of management thought’ concluded 
that behavior and sentiments were closely related. He established that 
group influences significantly affected individual behavior, that groups’ 
standards established individual worker’s output and that money was 
less a factor in determining output and productivity than aspects like 
group standards, group sentiments and groups’ security. 
The problem of increasing productivity implies the complete, 
appropriate and efficient utilization of available resources of human 
beings, machines, money, power, land, time and other wherewithal. 

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Productivity as a concept connotes a mass attack on waste of every type 
of resources and in all fields of production. It implies development of a 
constant urge to find improved, cheaper, quicker, easier and safer ways of 
doing a job, manufacturing a product or providing a service.