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Productivity
In business, the term productivity (also called labor productivity or workplace productivity) relates to the number of labor hours required in the production of a company's output. In other words, how much total employee time does it take to get a specific job done?
The importance of measuring productivity
At individual companies, measuring productivity is important to managers who should track the efficiency of their workers and processes. Improving productivity can lower costs and increase margins or improve a firm's ability to compete on pricing. It is important for governments and industries to measure productivity, as it is a key component of understanding the overall health of a nation's or business sectors economic health. Improving productivity helps to lower prices, therefore it can help hold down inflation.
Ways to increase productivity
Businesses can improve worker productivity in many number of ways ranging from training workers to be more efficient in their jobs to studying labor processes to find redundant jobs or positions. The utilization of newer, faster and more customized technology has been central to the dramatic gains in productivity in many parts of the world over the past three decades.
Measuring productivity
In the U.S., labor productivity is measured nationally each quarter by the Bureau of Labor Statistics, a bureau within the Department of Labor.
