Labour Productivity: What Is It And How To Improve It?

Labour Productivity

Labour productivity is the value of goods and services produced in a period, divided by the hours of labour used to make them. And also, Labour productivity measures the output produced per labour unit, generally reported as output per hour worked or output per person employed.

In the following GeoVictoria Blog note, you will learn more about what labour productivity is.

What Is Labour Productivity?

According to Wall Street Mojo, Labour productivity is a concept used to measure worker efficiency. It remains calculated as the value of the output produced by a worker each unit of time, such as one hour.
By comparing individual productivity with the average, whether a particular worker is underperforming or not can remain identified. The concept can also be used at the national level to calculate the GDP (Gross Domestic Product).
In addition, Investopedia points out that when we refer to Labour productivity, we must take into account the following:

  • Labour productivity measures output per hour of work.
  • Labour productivity remains primarily driven by capital investment, technological progress, and human capital development.
  • Businesses and government can increase workers’ Labour productivity by investing directly or creating incentives for advanced technology and human or physical capital.

How To Measure Labour Productivity?

Labour productivity measures the efficiency of people in a country or organization. Divide the total value of goods and services produced by the total hours worked on calculating it.
Suppose the productivity of an organization remains calculated. In that case, the total value of goods and services remains their monetary value, that is, the amount at which they can remain sold. This amount is not necessarily equal to the cost of goods sold. Part of the quantity produced could remain stored in the ending inventory instead of being sold.

Here is the most common formula to calculate Labour productivity

How To Increase Productivity?

  1. Avoid Putting All The Blame On Your Workers

Have you just discovered that your employees have low overall work productivity? Your first instinct might be to blame them.
Up to a point, you might be right. Indeed, you have at least some workers who take too many breaks. They also show up too late each morning and show laziness. The truth is, most of the problems are probably hardworking people who want to do great work every day. They may not put themselves in the correct position to be successful.
So instead of putting all the blame on your lower-level employees, take a look at your management team. In them, you will see if they are performing in the low Labour productivity of your company.

  1. Find Out Why Your Employees Are Wasting Time

In a perfect world, all of your employees would be working the entire time stipulated for it. That kind of productivity would get you the most bang for your buck and earn you the most profit.
If you can limit the wait and encourage your leaders to keep their teams actively involved in tasks, you will improve work productivity in no time. But before you can do it, you need to take some time to find out: Why is so much time being wasted? What can remain done about it?

  1. Set Goals For Workers: Provide Incentives Based On Performance

Do you suspect that the low productivity of your company could remain directly linked to a lack of motivation? If so, setting goals for your workers and offering performance-based incentives if they reach those goals is a great idea.
Goals make people work harder. Please make sure the goals are realistic enough for the workers to achieve them. Otherwise, they could end up harming your work productivity rather than a positive one.

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  1. Manage Overtime Effectively

Maybe you need your workers to work overtime at specific jobs. It helps you complete assignments faster and appears to improve productivity. However, working too much overtime can harm many people. It can lead to:

  • Excessive fatigue
  • Increase in accident rates
  • Higher employee turnover
  • And more

These things could hinder your work productivity in the long run. So it is better to boundary the number of overtime that you offer to your employees. Plan your workers’ projects ahead of time to complete them during regular business hours. Lean on technology to better understand how these overtime hours remain managed.

  1. Continuous Training Of Workers

Keeping workers challenged and engaged will promote productivity. The best option to help each employee fulfill their potential is to implement a training and education program.
With training, you will offer employees a better current position and eventually move up. You can create education reimbursement problems that further education promotes. Investing in your workers is speculation in the future of your company.

How Does Work Stress Affect Work Productivity?

According to the Business site, stress is a double-edged sword. It can be beneficial and also a disadvantage, especially when it comes to Labour productivity. Stress can take a significant impact on your physical and mental well-being. Ultimately it can affect your productivity. These are some of the signs that stress is negatively affecting your productivity.

  • Lack of energy: Although stress is notorious for giving you a burst of adrenaline, it will quickly deplete your energy after the initial outbreak. It leaves you emotionally and physically drained. Lack of bodily and mental energy can prevent you from doing your best. It will have a significant impact on productivity.
  • Lack of focus: Good production requires concentration, but stress will take over your mind, making it very difficult to focus on the task at hand since you are more focused on what caused your anxiety.
  • Constant worry: Have you always been so consumed by worrying about something that may happen? Stress has a way of taking your time by making you continually worry about something that may or may not occur. It remains wasted time that could have remained spent on more productive tasks.
  • Reduced creativity: Being stressed makes your mind wander, preventing you from locking yourself in new ideas. It limits your ability toward come up with creative and new ideas.

Adverse effects on personality: Stress not only affects your emotions and physical abilities, but it also affects your personality. For example, you can speak badly to your colleagues without realizing that you are doing it or get angry and yell at others without knowing that you are doing it.

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