Labour Productivity

0.0(0)
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
Card Sorting

1/5

flashcard set

Earn XP

Description and Tags

Study Analytics
Name
Mastery
Learn
Test
Matching
Spaced

No study sessions yet.

6 Terms

1
New cards

What is labour productivity?

Labour productivity is concerned with the volume of output (units) or value (ÂŁ) produced by each employee

2
New cards

Why does labour productivity matter?

  • Labour costs are usually a significant part of total costs

  • Business efficiency and profitability are closely linked to the productive use of labour

  • In order to remain competitive, a business needs to keep its unit costs down

3
New cards

What are the factors influencing labour productivity?

  • The extent and quality of fixed assets (e.g. equipment, IT systems)

  • Skills, ability and motivation of the workforce

  • Methods of production organisation

  • The extent to which the workforce is trained and supported (e.g. working environment)

  • External factors (e.g. reliability of suppliers)

4
New cards

What is the labour productivity calculation?

Output in period (units)/ Number of employees at work

5
New cards

What ways are there to improve labour productivity?

  • Measure performance and set targets

  • Streamline production processes

  • Invest in capital equipment (automatisation + computerisation)

  • Invest in employee training

  • Improve working conditions

6
New cards

What are the potential problems when trying to increase labour productivity?

  • Potential ‘trade-off’ with quality- higher output must still be of the right quality

  • Potential for employee resistance- depending on the methods used (e.g introduction of new technology)

  • Employees may demand higher pay for their improved productivity (negates impact on labour costs per unit)