ProductivityEconomic growth and productivityMain processes of a companyProductivity modelIllustration of the real income distribution processesMeasuring and interpreting partial productivityNational productivityImportance of national productivity growth

• Productivity is a measure of output from a production process, per unit of input. For example, labor productivity is typically measured as a ratio of output per labor-hour, an input.

• Productivity may be conceived of as a metric of the technical or engineering efficiency of production. Such as, the emphasis is on quantitative metrics of input, and sometimes output.

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importance

• Economic growth is a production increase achieved by an economic entity or nation. It is usually expressed as an annual growth percentage depicting (real) growth of the company output (per entity) or the national product (per nation).

• Economic growth is created by two factors so that it is appropriate to talk about the components of growth. These components are an increase in production input and an increase in productivity.

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To perform, succeed

Accordingly, an increase

productivity is characterized by a

shift of the production

function and a consequent

change to the output/input relation. The

formula of total productivity is

normally written as follows:

Total productivity = Output quantity / Input quantity

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

Organisation for Economic Co-Operation & Development

Gross domestic product

• A company can be divided into sub-processes in different ways; yet, the following five are identified as main processes, each with a logic, objectives, theory and key figures of its own. It is important to examine each of them individually, yet, as a part of the whole, in order to be able to measure and understand them. The main processes of a company are as follows:real process income distribution process production process monetary process market value process

Productivity is created in the real process, productivity gains are distributed in the income distribution process and these two

processes constitute the production process. The production process and its sub-processes, the real process and income distribution

process occur simultaneously, and only the production process is identifiable and measurable by the traditional accounting practices.

Productivity model is a measurement method which is used in practice for measuring productivity. Productivity model must be able to solve the formula Output / Input when there are many different outputs and inputs.

The real income distribution process is to be designated that which sides of the production processes to be given the parts of the income. To have optimum structures in the process, the real income distribution should be made excellent. After this, the production process figures are obtained by multiplying the figures of the real and income distribution processes.

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• Measurement of partial productivity refers to the measurement solutions which do not meet the requirements of total productivity measurement, yet, being practicable as indicators of total productivity. In practice, measurement in production means measures of partial productivity.

• In that case, the objects of measurement are components of total productivity, and interpreted correctly, these components are indicative of productivity development.

Only one part of Means

Point out, show

explain,

Single – Factor productivity

Value – Added productivity

Unit cost accounting Efficiency ratios Managerial control

ratio system

To the workforce through better wages and conditions;

To shareholders and superannuation funds through increased profits and dividend distributions;

To customers through lower prices; To the environment through more stringent

environmental protection; To governments through decreases in tax payments

(which can be used to fund social and environmental programs).

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• Productivity measures are often used to indicate the capacity of a nation to harness its human and physical resources to generate economic growth.

• Productivity measures are key indicators of economic performance and there is strong interest in comparing them internationally.

Importance of national productivity growth:

Productivity growth is a crucial source of growth in living standards. Productivity growth means more income is available to be distributed.

important

• Unit cost: The unit cost of something is the amount of money that is needed in order to buy , do or make it.

• Ratio: A ratio is a relationship between two numbers which shows how much greater one is than the other.

• Average: To describe a person or thing in order to indicate that they are typical or normal.

• Value: The value of something such as a quality or method is its importance or usefulness.

• Partial: A partial thing, state or quality is not complete or whole.