Increasing Labour Productivity

• Increasing labour productivity lowers labour costs per unit and hence unit cost, therefore it is important to use workers efficiently
• Labour productivity

  • training
  • increasing motivation
  • implement new technology
  • better working practices
  • improved recruitment and selection
• May negatively impact on quality and customer satisfaction
• Damage to long term reputation
• Increase waste affecting unit cost
• Employees may feel exploited
• Employees working harder for the same pay, may work with unions to negotiate higher wages
• Business is benefitting from labour productivity but not the employees
• Increased workload for employees leading to stress and demotivation