What is Productivity

Productivity is a concept related to Economy which refers to the relationship between quantity of products obtained through a production system and the resources used in its production. In this sense, productivity is a productive efficiency indicator.

Likewise, productivity can also be measured in function of timethis means that the less time is spent in obtaining a certain product, we can consider that the system is more productive.

Productivity, in this sense, determines the capacity of a production system to produce the required products and the degree to which the resources used in the production process are used.

Higher productivity, using the same resources, results in higher profitability for the company. Hence, the concept of productivity is applicable to an industrial or service company, to a particular business, to a branch of industry, or even to the entire economy of a nation.

Labor productivity

Labor productivity is a efficiency indicator which is obtained from the relationship between the product obtained and the amount of labor inputs invested in its production. More specifically, labor productivity can be measured based on the hours of work required to obtain a given product.

In this sense, the objective of every company is a high level of productivity, that is, a high use of resources in the production process that results in greater production, and, consequently, greater profitability.

You may also be interested in reading the meaning of:

  • Competitiveness.
  • Cost effectiveness.
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