Productivity Problems and Measurements

Productivity will be one of the major concerns of managers not only for the current period but future as well and probably beyond. This concern extends beyond the boundaries of the United States into many parts of the world. Even Japan, which is admired for productivity improvements, is now concerned about remaining competitive in the world market.

Productivity implies measurement, which, in turn is an essential step in the control process. Although there is general agreement about the need for improving productivity, there is little consensus about the fundamental causes of the problem and what to do about them. The blame has been attributed to various factors. Some people place it on the greater proportion of less skilled workers in respect to the total labor force, but others disagree. There are those who see the cutback in research and the emphasis on immediate results as the main culprit. Another reason given for the productivity dilemma is the growing affluence of people, which makes them less ambitious. Still others cite the breakdown in family structure, the workers’ attitudes and government policies and regulations. Increasingly, attention shifts to management as the cause of the problem – as well as the solution.

Measuring Productivity of Knowledge Workers: Productivity is the input-output ratio within a time period with due consideration for quality. This definition can be applied to the productivity of organizations, managers, staff personnel and workers. Measurement of skills work is relatively easy, but it becomes more difficult for knowledge work. The difference between the two kinds of work is the relative use of knowledge and skills. Thus, a person on the production line would be considered a skill worker, while the assistant to the manager with planning as his or her main function would be a knowledge worker. Managers, engineers, and programmers are knowledge workers because the relative amount of their work does not consist of utilizing skills, as would be the case for bricklayers, mechanics, and butcher. But the job title cannot be the sole guide for making distinctions. The owner of a gas station may schedule the day’s tasks, determine priorities, and direct subordinates, but the owner may also change brakes adjust the carburetor, or realign the front wheels on a car.

It is evident, then, that productivity improvement is achieved by the good management practices advocated throughout this book. But the discussion will now turn to the specific area of production and operations management, where measurement is relatively easy and consequently has been the focus of productivity improvement programs in the past.