MeasureProductivity

Productivity is defined as gross domestic product per hour work of a company. It is the key factor which determines the overall growth rate of a company. Productivity may also be understood in terms of output and input. The overall change in output as per the change in input is known as productivity. Hence it can be said that productivity is associated with the consumption of inputs to produce desired output.

There are various processes which broadly define the productivity function of a company. Productivity function is a term that is being used as a predefined factor that works well as a performance index in productivity of a company. The quantitative as well as qualitative change in output with respect to input is known as productivity function. There are five factors which measure productivity index of a company. Market value process, monetary process, production process, income distribution process and real process are the main five factors effecting productivity of a firm.

Real process and income distribution process works simultaneously and generates the production output. Production process is the only measurable process that can be measured by accounting. Real distribution and income distribution processes are measured by extra calculation. Both of them can me understood with the help of production function. Production process may include both material as well as immaterial input which can only be understood with the help of real process. There is a condition under which there originates a surplus value to the consumer and the producers. The condition occurs as a result of real process. To control productivity, real process and income distribution process are the two vital phase.

Very often it so happens that there is a sudden change in pricing scheme of input good due to which the business productivity varies abruptly. This situation can only be manipulated with the help of income distribution process. Rate of change of income distribution process is directly proportional to the change in price of output. Production process is said to be the combination of real process and income distribution process. Profitability of a company varies directly with the production process. Returns and costs are the two components of profitability which largely decides the production processes.

All the events related to finance section of a company comes under monetary process. Market value of a company as determined by the investors refers to the series of events which comes under market value process. To improve productivity of a company, all the above processes have to be followed with utmost care.

To measure productivity of a firm or a company, there are few areas which have to be manipulated accurately. Value added productivity, unit cost accounting, efficiency ratios and single factor productivity are the sections which have to be closely monitored to judge the overall business productivity of a company. These are the measuring components of personal productivity of a company. A collective manipulation of each of the above component will result in an overall measurement of production.