Productivity: Productivity is a measure of output from a production process, per unit of input. Thus, productivity is defined as the efficient use of resources â€“ labor, capita, land, materials, energy and information â€“ in the production of various goods and services. Higher productivity means accomplishing more with the same amount of resources or achieving higher output in terms of volume and quality for the same input. This can be Output
stated as: Input = productivity. It is a tool for managers, economists, politicians and industrial engineers. Productivity measurement Methods Partial Productivity Measure: The standard definition of productivity is actually what is known as a partial factor measure of productivity, in the sense that it only considers a single input in the ratio. The formula then for partial-factor productivity would be the ratio of total output to a single input or: Managers generally utilize partial productivity measures because the data is readily available. Also, since the total of multifactor measures provides an aggregate perspective, partial factor productivity measures are easier to relate to specific processes. Labor-based hours (generally, readily available information) is a frequently used input variable in the equation. When this is the case, it would seem that productivity could be increased by substituting machinery for labor. However, that may not necessarily be a wise decision. Labor-based measures do not include mechanization and automation in the input; thus when automation replaces labor, misinterpretation may occur. Other partial factor measure options could appear as output/labor, output/machine, output/capital, or output/energy. Terms applied to some other partial factor measures include capital productivity (using machine hours or dollars invested), energy productivity (using kilowatt hours), and materials productivity (using inventory dollars). Multifactor Productivity Measure: A multifactor productivity measure utilizes more than a single factor, for example, both labor and capital. Hence, multifactor productivity is the ratio of total output to a subset of inputs: A subset of inputs might consist of only labor and materials or it could include capital. Obviously, the different factors must be measured in the same units, for example dollars or standard hours. Total Productivity Measure: A broader gauge of productivity, total factor productivity is measured by combining the effects of all the resources used in the production of goods and services (labor, capital, raw material, energy, etc.) and dividing it into the output. Total output must be expressed in the same unit of measure and total input must be expressed in the same unit of measure. However, total output and total input need not be expressed in the same unit of measure. Resources are often converted to dollars or
standard hours so that a single figure can be used as an aggregate measure of total input or output. For example, total output could be expressed as the number of units produced, and total input could be expressed in dollars, such as tons of steel produced per dollar input. Other varieties of the measure may appear as dollar value of good or service produced per dollar of input, or standard hours of output per actual hours of input. Total productivity ratios reflect simultaneous changes in outputs and inputs. As such, total productivity ratios provide the most inclusive type of index for measuring productivity and may be preferred in making comparisons of productivity. However, they do not show the interaction between each input and output separately and are thus too broad to be used as a tool for improving specific areas. Importance of Productivity • • • • • • • • •
Low cost per unit Increases profits Improve the performance of the product Determines efficiency and effectiveness of business Control output parameter of different departments Indicator of competitive position of organization It helps to bargain with trade unions Indicates standard of living Effective use of resources Factor affecting Productivity
There is quite a variety of factors which can affect productivity, both positively and negatively. These include: • • • • • • • • • • • • • • •
Capital investments in production, technology, equipment, facilities Economy Workforce knowledge and skill Technological changes Working methods Production procedures Production system Quality of products, processes, management etc. Legislative and regulatory environment General levels of education Social environment Geographic factors How to improve? Develop productivity measures Develop methods for achieving productivity such as ideas from workers, engineers, and managers), studying other firm Find out key productivity
• • • • • • •
Good planning and training Set reasonable goals By Involving management Department Publishing result of improvement and contributor name. Using modern technology Giving incentives and benefits Reducing transformation, material handling, maintenance and transportation time
Benchmarking The process of comparison (quality, time and cost) of performance (better, faster, and cheaper) within or another industry. Example: Kodak & Canon, AT&T & HP Brief Process of Benchmarking 1. Select subject, Identify processes, activities, or factors to benchmark and their primary characteristics. 2. Determine what form is to be used: generic, functional, competitive, or internal. 3. Determine who or what the benchmark target is: company, organization, industry, or process. 4. Determine specific benchmark values by collecting and analyzing information from surveys, interviews, industry information, direct contacts, business or trade publications, technical journals, and other sources of information. 5. Determine the deference of benchmarked item. 6. Evaluate the process to which benchmarks apply and establish objectives and improvement goals. 7. Implement plans and monitor results. 8. Make improvement & Plan for future.. Types of Benchmarking -
Internal - seeks partners from within the same organization. The main advantages of internal benchmarking are that sensitive data and information is more accessible, general data is readily available, and less time and resources are needed. Functional - is used when organizations look to benchmark with partners from different business areas of activity in order to find ways of improving like functions or work processes. Competitive - is used when organizations consider their positions in relation to performance characteristics of vital products and services. Benchmarking partners are drawn from the same segment. Generic - benchmarking investigates activities that are or can be used in most businesses. This type of benchmarking makes the broadest use of data collection. One difficulty is in understanding how processes translate across industries. Yet generic benchmarking can often result in an organization's drastically altering its ideas about its performance capability and in the reengineering of business processes.
Job Design Job design is a process of specifying the Content, Method and Structure of Jobs. The
main purpose of job design is to increase both employee motivation and productivity. For example, the focus can be that of improving quality and quantity of goods and services, reduce operation costs, and/or reduce turnover and training costs. Goals are: The objectives of job design There are clearly many alternative designs for any given job. For this reason, an understanding of what the job design is supposed to achieve is particularly important. As before, the five performance objectives give us a guide to what is relevant in job design decisions. 1. Quality : The ability of staff to produce high-quality products and services can be affected by job design. This includes avoiding errors in the short term, but also includes designing jobs which encourage staff to improve the job itself in such a way as to make errors less likely. 2. Speed : Sometimes speed of response is the dominant objective to be achieved in job design. For example, the way in which the jobs of emergency service personnel are organised (the range of tasks for which they are trained, the sequence of activities in their approved procedures, the autonomy which they have to decide on appropriate action, and so on) will go a long way to determine their ability to respond promptly to emergencies and perhaps save lives. 3. Dependability: Dependable supply of goods and services is usually influenced, in some way, by job design. For example, in the postal services’ working arrangements, multiskilling, accurate use of sorting equipment through good staff-machine interface design, and the ‘design’ of postal staff’s clothing, can all aid dependable delivery of letters and parcels. 4. Flexibility: Job design can affect the ability of the operation to change the nature of its activities. New product or service flexibility, mix flexibility, volume flexibility and delivery flexibility are all dependent to some extent on job design. (See Chapter 2 for a full description of these different types of flexibility). For example, staffs who have been trained in several tasks (multi-skilling) may find it easier to cope with a wide variety of models and new product or service introductions. 5. Cost: All the elements of job design described above will have an effect on the productivity, and therefore the cost, of the job. Productivity in this context means the ratio of output to labor input: for example, the number of customers served per hour or the number of products made per worker.
In addition, job design will influence two other particularly important objectives. 6. Health and safety: Whatever else a job design achieves, it must not endanger the wellbeing of the person who does the job, other staff of the operation, the customers who might be present in the operation, or those who use any products made by the operation. 7. Quality of working life: The design of any job should take into account its effect on job security, intrinsic interest, and variety, opportunities for development, stress level and attitude of the person performing the job. Task Analysis - Description - Function - Frequency - Equipment, control, performance requirement - Possibility of errors - Task duration
Elements of Job design Worker Analysis - Skill - Performance, capability, physical requirement - Mental stress - Motivation & evolution
Environment Analysis - Location - Lighting - Ventilation - Safety - Space - Noise - Vibration - Temperature and humidity
Behavioral approaches Job Enlargement: Job enlargement means increasing the scope of a job through extending the range of its job duties and responsibilities generally with in the same level and periphery. Job enlargement seeks to motivate workers through reversing the process of specialization. Job Rotation: Job rotation moves employees from one task to another. Job Enrichment: an attempt to motivate employees by giving them the opportunity to use the range of their abilities. Allows employees to assume more responsibility, accountability, and independence. Job enrichment has been described as 'vertical loading' of a job. Work Design (Job Engineering): allows employees to see work methods, layout and procedure links. Participation: involving workers to decision-making. Redesigning Job: Changing the nature of work, description, responsibilities etc. Others are Choice of location, Work hour and team etc. Those are also called Common approaches. Factors Who What
Where When Why How Characteristics model: Hackman & Oldhamâ€™s job characteristics model It states that there are five core job characteristics (skill variety, task identity, task significance, autonomy, and feedback) which impact three critical psychological states (experienced meaningfulness, experienced responsibility for outcomes, and knowledge of the actual results), in turn influencing work outcomes (job satisfaction, absenteeism, work motivation, etc.). Hackman and Oldhamâ€™s job characteristics theory proposes that high motivation is related to experiencing three psychological states whilst working: Meaningfulness of work The work must be experienced as meaningful (his/her contribution significantly affects the overall effectiveness of the organization). This is derived from: - Skill variety Using an appropriate variety of your skills and talents: too many might be overwhelming, too few, boring. - Task Identity Being able to identify with the work at hand as more whole and complete, and hence enabling more pride to be taken in the outcome of that work (e.g. if you just add one nut to one bolt in the same spot every time a washing machine goes past it is much less motivating than being the person responsible for the drum attachment and associated work area (even as part of a group). - Task Significance Being able to identify the task as contributing to something wider, to society or a group over and beyond the self. For example, the theory suggests that I will be more motivated if I am contributing to the whole firmâ€™s bonus this year, looking after someone or making something that will benefit someone else. Conversely I will be less motivated if I am only making a faceless owner wealthier, or am making some pointless item (e.g. corporate give-away gifts). Responsibility Responsibility is derived from autonomy, as in the job provides substantial freedom, independence and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out) Knowledge of outcomes This comes from feedback. It implies an employee awareness of how effective he/she is converting his/her effort into performance. This can be anything from production figures through to customer satisfaction scores. The point is that the feedback offers information
that once you know, you can use to do things differently if you wish. Feedback can come from other people or the job itself. Knowing these critical job characteristics, the theory goes, it is then possible to derive the key components of the design of a job and redesign it: Work standard Time Study is a work of Frederick Winslow Taylor. Time study is a direct and continuous observation of a task, using a timekeeping device (e.g., decimal minute stopwatch, computer-assisted electronic stopwatch, and videotape camera) to record the time taken to accomplish a task and it is often used when: - There are repetitive work cycles of short to long duration, - Wide variety of dissimilar work is performed Motion Study is the work of Frank and Lillian Gilbreth. Motion study is the study of the individual human motions used in a job. The purpose of a motion study is to remove any unnecessary motions. Other methods are work sampling & standard data system.