adminMatthias Ruziwa
Productivity can be thought of as how effectively organisations, and the people working in them, produce value from available inputs.
It is more likely that understanding of the term in most organisations is patchy, to say the least. Some businesses don’t measure their productivity and in this article I will suggest that productivity simply mean getting the best out of people.
As most organisations have focused on survival, getting through tough times, there have been changes in strategic direction including changing the size of the workforce through taking on more or fewer people.
The business fraternity in Zimbabwe has continued pressing for wage levels in a dollarised economy such as ours to be flexible enough to adjust to competitive pressures which may stem from depreciation of currency levels in other countries.
Additionally, wage increases need to be aligned with productivity levels for the economy to remain competitive (ZEPARU, 2014).
In my view, section 74 of the Labour Amendment Act, 2015 has introduced an approach that incorporates ability to pay, productivity and the competitiveness of the economy.
What this means is that future wage negotiations must take into consideration high levels of productivity amongst other factors.
From my experience, ‘productivity’ is a term widely used within organisations when talking about how to improve business performance.
Manufacturing companies are more likely than service firms to use the term and large firms are more likely than small firms to talk about productivity.
Businesses that base their product or service strategy on low cost or added value are more likely to measure productivity than businesses where the strategy is based on high quality or customer service.
Understanding of what is meant by ‘productivity’ is patchy particularly when it comes to productivity measures.
In most cases — it seems that organisations say they measure ‘productivity’ when in actual fact they are likely to be measuring business performance in a more general sense.
In principle, there are many ways to measure productivity, but the most common measure is labour productivity and the two statistics usually quoted are output per hour worked and output per worker.
Increasing productivity is a current priority for industry in Zimbabwe to grow market share in existing or new markets and to manage costs.
As such HR can help to raise productivity through workforce and succession planning, performance management, improving leadership and management capability as well as training and development.
Productivity measurement is important because it is the modest but persistent growth of productivity year on year which is responsible for the huge improvements in living standards.
However, my experience tells that understanding in business is variable. The general public often conflate it with working harder or for longer when, in its economic sense, it is mainly about working smarter in designated working hours.
Nevertheless, I don`t deny that the economy can also grow by investing in more capital equipment and machinery implying that organisations can then produce more goods and services than previously in a given time period or with a given amount of raw materials or with a given stock of people.
By this, I mean to say innovation is one of the most important sources of productivity improvement.
The very simplest definition of productivity is output divided by inputs but there are several measures of an economy’s output.
In practice most aggregate productivity measures such as those compiled for an industry or a country use either gross domestic product (GDP) or gross value added (GVA).
Productivity measures are defined per unit of a specified input, which means we can have multiple productivity measures.
The most common input used when measuring productivity is labour and the most commonly used measures of labour productivity are output per worker essentially GVA divided by the total number of people employed and output per hour worked GVA divided by total hours worked. In practice, ‘productivity’ is often used as shorthand for labour productivity. Many analysts prefer output per hour worked over output per worker as a measure of labour productivity.
One reason for this is that individuals work different numbers of hours in a week/month/year, so ‘per hour’ measures allow for more accurate comparisons over time.
Inputs, of course, are not homogeneous. Some machines perform better than others and some people bring greater skills and experience to their work than others. Whilst the whole-economy productivity is pro-cyclical meaning it increases in good times and tends to fall back when conditions are tough, I do encourage organisations to put more focus on productivity and get the best out of people.
Always remember that it’s not the organisation that gives you desired results but it is people who can shake and move things to fulfil the organisation`s strategic objectives.
Disclaimer: Opinions expressed herein are solely those of the author. Matthias Ruziwa is an experienced and progressing Strategic Human Resource Practitioner based in the Midlands Province, City of Kwekwe. You can contact Matthias at the following email address: [email protected] <mailto:[email protected]> /whatsapp 0773 470 368
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