What is productivity?

Comparison of average total productivity levels between the OECD member states. Productivity is
measured as GDP per hour worked. Blue bars = higher than OECD-average productivity. Yellow bars =
lower than average.

technology. Technology can be depicted mathematically by the production function which technology.
Technology can be depicted mathematically by the production function which describes the function
between input and output. The production function depicts production performance and productivity is
the metric for it. Measures may be applied with, for example, different technology to improve
productivity and to raise production output.
different technology to improve productivity and to raise production output.


What is productivity (in Business)? I would really appreciate it if someone can explain productivity in
SIMPLE terms. How does lowered productivity affect a company?

productivity is a business' ability to get the job done and well...produce stuff. if a company has low
productivity they will fall behind on deadlines and the companies overall earnings will suffer.


Productivity in Economics is simply the ratio of how much you can produce (Output), based on the
resources available (Inputs). This is usually linked to production theory.


And if you want productivity figures for the entire auto industry, the numbers are readily available. The
Big Three — Daimler-Chrysler, Ford, and General Motors — know exactly how many vehicles roll off
their assembly lines, and they have an accurate idea of how many hours their employees work.


Productivity measures the efficiency with which resources such as labour or capital are employed in the
production process. There are two widely used productivity measures; labour productivity and
multifactor productivity.

Labour productivity is measured as real output per hour worked. Multifactor productivity, a broader
measure of efficiency, is measured as real output per unit of combined inputs (capital, labour, etc).


For tangible products such as tons of steel, developing an output index series and ultimately a
productivity series seems not to be too difficult. How are measures developed for those industries
where data on quantities produced are not available? How do you, for example, measure the output of

Advances in productivity, that is the ability to produce more with the same or less input, are a
significant source of increased potential national income. The U.S. economy has been able to produce
more goods and services over time, not by requiring a proportional increase of labor time, but by
making production more efficient.


Labor productivity is the ratio of the output of goods and services to the labor hours devoted to the
production of that output. Multifactor productivity relates output to a combination of inputs used in the
production of that output, such as labor and capital or capital, labor, energy, materials, and purchased
business services (KLEMS). Capital includes equipment, structures, inventories, and land.

The most commonly used multifactor productivity measure is for the private business sector of the
economy. This sector essentially measures the for-profit sector of the economy and it is the broadest
sector for which multifactor productivity measures are available.


Employers, regardless of what type of business they manage, know that worker productivity is the key
to an organization’s success. Workers who are not using their time and resources effectively are
costing the company money. Unfortunately, measuring productivity can prove to be quite difficult —
especially in industries where work is primarily knowledge based.

Traditionally, worker productivity was figured by dividing comp