7/31/2019 4. Productivity Measurement
1/16
Productivity Measurement
Definition of Productivity (in general):Ratio between output and input .
Example of productivity measure ingeneral :
number of pages typed
hours of secretarial time
7/31/2019 4. Productivity Measurement
2/16
Number of freight cars unloaded
Number of laborers, lift truck
Number of parts produced
Amount of electrical energy consumed
Number of houses cleaned
Hours of maid services
7/31/2019 4. Productivity Measurement
3/16
Keuntungan Pengukuran produktivitas
Give strong motivation for achieving better
performance since productivity measurement
helps identify basic work measurement forindividuals, groups, organizations, projects etc.
Emphasizing on the companys potential for
improvements
Creating effective surveillance against all
improvements required and
7/31/2019 4. Productivity Measurement
4/16
improving the decision making processthrough better understandings of effects of
improvements already made Can be used to compare performance levels
among individuals, groups, departmentswithin a company
Simplifying the short and long-termresource planning and forecasting
7/31/2019 4. Productivity Measurement
5/16
Reasons for productivity
measurement
For productivity improvement
Spotting productivity declines for early warning
Comparing productivity across individuals, units,organizations, and industry to make management
decisions
Linking management and labor in productivityimprovement efforts to build common awareness
and responsibility
7/31/2019 4. Productivity Measurement
6/16
Demonstrating productivity gains to
interested stakeholders
Conducting research and evaluation related
to new or experimental methods
Supporting incentive and bonus plans with
objective productivity data
7/31/2019 4. Productivity Measurement
7/16
ELEMENTS OF
PRODUCTIVITY MEASURE
Output
Output should represent the results to be achieved
(related to the particular objective)Example of Output (in general):
Number of contracts negotiated
Number of parts produced meeting quality
specifications
Amount of profits per completed contract
Number of clients seen
7/31/2019 4. Productivity Measurement
8/16
Points to remember in measuring Output:
Each output is expressed as a quantity (number, amount,gallons, so forth. Identification of some unit of quality isnecessary for measurement)
Some of the outputs have a qualitative expression attachedto them, such as meeting quality specifications,with no error, with no impurities or residues
Some output will be tangible and intangible goods
Identification of outputs require and assume measurement.
(spesific rules are required) Deciding on which outputs are to be used in a productivity
ratio is a crucial step in productivity measurement.
7/31/2019 4. Productivity Measurement
9/16
Customers
The concept of customer is integral toproductivity measurement even though thecustomer does not appear in the measure itself (theonly elements of a productivity ratio are outputs and
inputs) Customers are the people or operations that
consume, need or use the products or results of anoperation (Internal and External customers)
Two reasons to identify customers: Identifying customers helps to clarify which outputs of a unit
are most important
Quality characteristics tie the customers to an operation orunit.
7/31/2019 4. Productivity Measurement
10/16
Throughputs
A throughput is also an output, but it is aspecial sort of output intended for internal
consumption. A throughput is also an input for the next
operation
Through measurement is, sometime, moreimportant than output measurement if itrequires more resources.
7/31/2019 4. Productivity Measurement
11/16
Input
Inputs include all the tangible resources consumed(materials, supplies, and so forth), the services that supportproduction (heat, light, space, computer time, and so forth),
and the effort or labor of people who use these resources toactually produce the output.
Examples of inputs:
Labour hours
Capital equipment
Management time
Energy (electricity, gases, water, etc. )
Labour, overhead, and energy costs
7/31/2019 4. Productivity Measurement
12/16
EFfectiveness
and PRODUCTIVITY
Efficiency Better achieved byworking Smarter than by
working harder
7/31/2019 4. Productivity Measurement
13/16
Points to remember in measuring
productivity
Validity
Refers to the relationship between what is measured and whatthe person doing the measurement wants to know
Example : Measuring the marketability of a productivity book by a
productivity experts opinion is less valid than that by a marketingmanagers opinion
Measuring how much a manager actually uses an accounting reportwould be a more valid indicator of the reports utility than would
be a measure of the reports adherence to standard guidelines fororganization and readibility.
7/31/2019 4. Productivity Measurement
14/16
Measuring how successfully a newly hired employeeactually performs during the first six months on the job is amore valid assessment of the success of the hiring processthan a rating of how closely the new employees credentialsmatched the job description.
Validity is determined by whether the data collected throughmeasurement are, in fact, related to phenomena that can be
controlled to improve productivity.
Productivity measurement should not be emphasized on minoroperations/activities
7/31/2019 4. Productivity Measurement
15/16
Reliabily
Reliability describes the accuracy of a measure.
Reliability is dependent on the characteristics ofmeasuring tools and procedures
Bias
Bias can happen in any measurement unless thesamples are properly taken
Example:
Measuring productivity of a training unit by involvingonly trainees at the end of the program
Measuring productivity of a serving unit by involvingcustomers only
7/31/2019 4. Productivity Measurement
16/16
Reactivity
The tendency of a measuring process to influence what it
measures is known as reactivity
Example:
For measuring labor productivity using a new method, the data
is taken from the previous successful method
Top Related