4. Productivity Measurement

7/31/2019 4. Productivity Measurement

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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


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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


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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


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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


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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


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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


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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


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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.


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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.


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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.


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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


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EFfectiveness

and PRODUCTIVITY

Efficiency Better achieved byworking Smarter than by

working harder


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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.


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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


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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


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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

4. Productivity Measurement

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