Labour Productivity

• What does labour productivity measure?

  Output obtained from each employee
• Why is measuring labour productivity important?

  It impacts costs, efficiency, and profitability
• How are labour costs related to total costs?

  Labour costs are a significant part of total costs
• What is the relationship between business efficiency and labour productivity?

  Efficiency and profitability are linked to productivity
• Why must a business keep its unit costs down?

  To remain competitive in the market
• What are some factors influencing labour productivity?

  Fixed assets, workforce skills, production methods
• What are examples of fixed assets that affect productivity?

  Equipment and IT systems
• How do workforce skills impact productivity?

  Higher skills lead to increased productivity
• What external factors can influence labour productivity?

  Reliability of suppliers
• What is a common formula for measuring labour productivity?

  Output per employee
• What is one approach to improve labour productivity?

  Measure performance and set targets
• Why is streamlining production processes important?

  It enhances efficiency and reduces waste
• How can investing in capital equipment improve productivity?

  By automating and computerizing processes
• What is the benefit of investing in employee training?

  It enhances skills and motivation
• How can the workplace environment affect productivity?

  A conducive environment boosts productive effort
• What are the main approaches to improve labour productivity?

  • Measure performance and set targets
  • Streamline production processes
  • Invest in capital equipment (automation + computerisation)
  • Invest in employee training
  • Make the workplace conducive to productive effort