Labour productivity: Do you know what it is? How can it be measured within the company?

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Technically, labour productivity is defined as a measure of work efficiency. Through it, measurement parameters are established for the performance of a worker, of a team in general and even of a machine. The concept, then, can also be used to refer to a country’s domestic product. In a more specific aspect, when we talk about labour productivity, we refer to the concept used to measure the efficiency of the worker and, as such, this is calculated by the value that the worker produces for the company for each unit of time invested.

Surely, as a leader you are concerned about the performance of people and you have asked yourself many times how can you measure labour productivity within your company? ChVmpionMind, brings the best answer for you who want the best for your work teams. With us, you can improve the productivity of your employees by more than 1250%.

What aspects should I consider when measuring worker productivity?

It is important to take into account certain elementary aspects when it comes to measuring labour productivity:

Labour productivity should be measured in terms of output achieved per hour of work. – Labour productivity is driven by the development of human capital, technological advances in the working environment and investment in resources to facilitate work. – Companies must increase productivity through investments and incentives that benefit both technology and human capital.

And, in the words of our CEO José L. Meléndez “You can reach a goal faster, but the road is not so easy and beyond the goal is not sustainable, if you do not surround yourself with good people who support you in your inner mind“.

The personal and intrinsic aspect of an individual determines his professional capabilities…

Statistical studies have shown that 89% of companies assume that their employees decide to change companies in search of a salary increase. This is not entirely true because the truth is that only 12% of employees earn more in their new job. The causes go beyond the economic aspect, as they respond to multiple factors ranging from emotional, family and mental factors, among others.

The productivity of a worker, therefore, not only needs new technologies, but also the accompaniment of a person who, beyond being the leader or boss, serves as a Coach, that is, someone who helps on a personal, emotional and mental level to that worker who, more than an employee, is a human being. Let us remember that in life everything is a balance and in order to have the best productivity at work it is necessary to be well at home and at peace with oneself.

How do we calculate labour productivity?

It is worth stressing that not everything can always be measured. Therefore, productivity is not observable in all cases. For example, let’s look at a specific case: two workers in a call centre, one of them attends 5 customers and the other 20. How do you measure? Who is more productive? In the first instance, we could say the one who handled 20 calls. However, if we look more deeply into the case, we could discover that the first one attended his clientele in an optimal way and closed more sales; while the second one did it in a lousy way. Now, can good customer service be a measure of labour productivity? As specified before, productivity is not always observable, not always accurate to measure, far from it. Productivity is not a constant…

So… Does labour productivity matter?

Yes, definitely. Productivity is one of the basic values of a worker and of a group of workers in general. It allows, among other things, to improve the quality of life of a society, how? Well, the best evidence is the profitability of projects that encourage investment and create new sources of employment. This has a direct impact on the salaries of employees. Moreover, economic growth for a country or a company is also determined by labour productivity.

Being clear about the ranges of labour productivity measurement will mean that:

If targets are not met, it is possible to change what is not working to improve it or replace it with something that works. In this way, time can be put to good use in finding solutions and increasing productivity. Therefore, by performing a total analysis, a complete and competent combination of both human and physical resources will be established to increase the overall production of goods and services.

Are there various types of productivity?

It turns out that yes, labour productivity can be classified into three different types that cater to specific factors in each of their categories.

  • Labour productivity; as we have already been studying it, it refers to the productivity obtained with respect to the amount of time spent on it.
  • Total factor productivity; it is established by the production obtained together with all the factors involved in it, including land, capital and, of course, labour.
  • Marginal productivity; marginal productivity is the variation in the production of a good when one element of a productive component of the good increases. While the rest remains unchanged.
    What are the variables that could affect productivity?

What are the variables that could affect labour productivity?

  • If a country is endowed with the presence of natural resources, its productivity will increase; consumption and transfer costs will avoid a large amount of expenditure. However, if that country has a poor management of its resources, productivity will not correspond. Therefore, a first variable is the quality and availability of natural resources.
  • On the other hand, the capital that is invested in an industry or company will improve or, in the case of no investment, worsen productivity. That is, if a firm does not invest in itself, it is very unlikely to increase its labour productivity. For example, the greater mastery of a high technological level of the elements of a company will undoubtedly produce a noticeable increase in productivity.
  • Finally, the quantity and quality of the human resources present in the execution of tasks will make the difference in terms of increasing the value of the work and the competencies in the execution of the same.

We hope that this post has helped you to clarify the doubts you had about labour productivity and everything that lies behind this premise. Follow us and be part of this change of life that we offer you!

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