Productivity and Productivity Problems in a Business Organization
The above concept shall be looked into under the following headings:
- The meaning of productivity
- Productivity problems
- Determinant of organizational productivity
- Factors influencing productivity
- Importance of productivity
THE MEANING OF PRODUCTIVITY
Harold Koontz (1990) defining productivity says that it is the input-output ratio within a time period with due consideration for quality. Writing further, he emphasizes that this definition is most applicable to the productivity of organizations managers, staff personnel and workers. This is because the measurement of skill work is relatively easy, but that it becomes more difficult for knowledge work.
Richard E. Kopelman (1986), viewing productivity from the same angle as Koontz, defines it as the relationship between physical output and one or more of the associated physical inputs used in the production process. He writes that productivity is broadly conceived as a system concept, which means that it can apply to various entities, ranging from an individual or machine to a company, industry, or national economy. To him, physical process productivity, typically expressed as a ratio, reflects how efficiently resources are used in creating outputs. But that, frequently, partial productivity ratios are computed, showing that relationship between output and a single input.
John W. Kindrick (1997), views productivity as the relationship between output of goods and services and the relationship, therefore, is usually expressed in ratio form. That is to say that, productivity is the ratio of output to input. In other words, the higher the numerical values of this ratio, the greater the productivity.
James A. F. Stoner and Edward Freeman (1989), while writing on productivity define it as the measure of the well an operations system functions. And that individual organizations must be productive to survive. And so, for the individual manager, productivity is an indicator of the efficiency and competitiveness of his or her firm or department.
Charles E. Graig and R. Clark Harris (1993), while contributing to the writing of productivity from the angle of productivity measurement at the firm level, state that productivity can be measured with two types of ratios:
- Total productivity ratio: This they state relates all output to all input with the ratio total output / total input.
- Partial productivity: This relates all output to major categories of input with the ratio total output/partial input.
David R. Hampton (1986), viewing productivity in relation to costs defines it as a measure of the effectiveness of the use of resources to produce goods and services, that is, the ratio of the value of the outputs to the cost of the inputs. Which means that, the outputs from a productivity activity should have a higher value to customers that the cost of the resources and transformation activities have to the company. Otherwise the firm is losing money he concludes.
Productivity implies measurement, which in turn is an essential step in the control process, so says Harold Koontz (1990). Although there is a general agreement about the need for improving productivity, he continues, but that there is little consensus about the fundamental causes of the problem and what to do about them. He states that the blame has been attributed to various factors by different thoughts. And some of such thoughts according to him are:
That some people place it on the greater proportion of less skilled workers in respect to the total labour force, but that others disagree.
That there are those who see the cutback in research and the emphasis on immediate results as the main culprit.
While another group view the growing affluence of people, which has made them less ambitious as a contributing factor to the productivity dilemma.
But that still others cite the breakdown in family structure, the workers, attitudes, and government policies and regulations as the main cause.
Conclusively, he states that increasingly, attention now shifts to management as the chief cause of the problem because people think that management is just not doing enough to influence positively the rate of productivity.
The environment of any organization comprises the uncontrollable variable. Harold Kopelman states that the environmental conditions can affect one or more of the controllable, to some extent, determinants of organisational productivity work, and individual characteristics. Some of the impacts of environmental conditions on controllable factors include the following:
- Statutes, regulations and court decisions which affect such organisational practices as recruitment, selection, promotion, training and termination.
- Changing societal attitudes and values which influence individual characteristics such as work attitude, expectations, competencies, and values (e.g. job involvement, worker motivation, organizational commitment, job satisfaction) and
- Changes in technology or changes in the relative costs of raw materials, energy and capital which influences work characteristics (e.g. feed back, autonomy).
He points out that logic and abundant evidence indicate that numerous organizational characteristics or practices influence individual, their work behavior, job performance, and organizational effectiveness. Yet all organizational practices, presumably, are not equal in their effects. He then postulates seven types of organizational practices that are widely assumed to affect productivity. The practices and their intended effects are as follows:
- Reward systems to improve work motivation and job performance.
- Goal setting programs to heighten worker motivation and enhance performance.
- MBO programs to clarify and make more congruent organisational and individual objectives, there improving work planning and task motivation.
- Selection procedure of various kinds of enhance the likelihood of lining individuals whose aptitudes, knowledge, skills and abilities better permit them to accomplish organisational goals.
- Training and development programs to increase the knowledge and skills of employees, so that they can function more effectively.
- Leadership changes or training programs to improve managerial effectiveness.
- Organization structure changes to improve organizational effectiveness.
DETERMINANTS OF ORGANIZATIONAL PRODUCTIVITY
Richard E. Kopelman (1986), continuing in his contribution to productivity states that a goal deal of theorizing in the behavioral sciences has put it that there are four principal determinants of organizational productivity. And they are thus:
- The environment
- Organizational characteristics
iii. Work characteristics
These determinant factors will be looked into chronologically.
WORK CHARACTERISTICS AND INDIVIDUAL CHARACTERISTICS
He points out another factor, largely controllable by management and pertinent to productivity in organizations, and that is in the nature of the work performed. He states the relevant work characteristics include task variety, significance, identify autonomy and feedback. Additionally, he writes that with respect to technical professionals, highly relevant work characteristics include time pressure, work challenge, and frequency of change in technical assignments. He as well includes some managerial practices that have an impact on work characteristics. They include the following:
- Performance feedback to motivate and instruct employee.
- Job design programme to enhance motivation and skills through job enrichment or to improve task specific ability through work simplification.
- Alternative work schedules, such as flexible work hours or the compressed workweek, to increase employee autonomy, decrease work-family conflict, and improve motivation and performance.
He emphasizes organizational and work characteristics are often treated as casual variable, but that the individual characteristics, is often viewed as an interviewing variable in the casual network. In essence, organizational practices and work characteristics are translated into observable end results through their impact or observable individual attributes such as beliefs, values, attitudes, knowledge, goals and intentions.
He continues by saying that a number of relatively ending properties of individuals, such as traits, as well as relatively transitory properties, states have been found to be determinant of individual work behavior, job performance, and organizational effectiveness, namely:
The degree to which personal satisfaction is experiencing as a result of effective job performance (internal work motivation)
The degree to which effort expenditure is believed to lead to effective job performance and in turn to various outcomes (expectancy and instrumentalities) and the desirability of those outcome (valences).
The degree of satisfaction experienced with the job in general or with particular job facets.
The relatives important of one’s job in comparison to non work activities (job involvement), and of particular relevance to technical professionals.
- The degree of professional and job of up-to-dateness.
FACTORS INFLUENCING PRODUCTIVITY / IMPORTANCE OF PRODUCTIVITY
James Stoner and Edward Freeman (1989), point out some interrelated factors affecting productivity from the following consideration.
- Workforce: They claim that the make-up of the workforce is very important to productivity. This is because many countries with basically homogenous culture enjoys a relatively high present growth rate than those with heterogeneous cultures. This is equal to the fact that integrating a workforce of people from different cultures, many of them less educated and unfamiliar with the rules of organizational game, is always a thing of constant challenge to any country.
- Energy costs: The cost of oil, gas and electricity have a significant effect on productivity. Spiraling energy costs and shortages are always the biggest factors in slowing productivity growth in any organization.
- Level of research and development spending: Any improvement in the level of the above will no doubt have a remarkable impact on the rate of productivity. While the reverse will be the case if there is no improvement.
- Growth of the less productive services sector: If the rate of employment into the service sector is high, definitely, productivity will be low because the service sector is a non-productive sector. And as such does not add anything to the rate of productivity in any organisation or economy.
- Changes in family structure: High rate of married women at work, increased rate of divorce, the attraction of alternative life style, and the increase in single parent families, added financial and emotional pressure on many workers may produce negative effects on work performance, thereby affecting the rate of productivity.
- A shift in workers attitude and motivation: Some employers and social entice contend that works today no longer have the traditional work ethics. That is to say, that they no longer work as hard as they used to. While others believe that the work ethics is strong, but that management practices discourage workers from doing their best on the job.
- Cost of industry for government regulation: Industries must comply with strict government regulations concerning pollution control and other measures to improve health and safety on the job. Productivity, in this case, is affected because that cost of equipment and paper work involved has to be absorbed by the business organizations affected.
- Financial pressures: When inflation is high, it affects productivity growth by making it difficult to anticipate and control production costs and by discouraging additional investment.
They conclude by stating that the impact of the factors may be temporary and their effects already absorbed by the economy. But that management must address those pertinent to it if productivity gains necessary to counter inflation and improve the quality of life for all are to be realized.
THE IMPORTANCE OF PRODUCTIVITY
In this contribution to the writing of productivity in management, Ricky Griffin (1990), enumerates the various reason why productivity is important. He begins by stating that firm productivity is a primary determinate of an organization’s level of profitability and ultimately, its ability to survive. He continues by saying that if an organization is more productive than another, that it will have more products to sell, be able to sell them at lower prices, and so have more profit to re-invest in other areas.
Again he asserts that productivity is also important because it partially determines people’s standards of living within a particular country. At economic level, he states businesses consume resources and produce goods and services. The goods and services created within a country can be used by that country’s own citizens or exported for sales in other countries. The more goods and services the businesses within a country can produce, the more goods and services the country’s citizens will have.
And more so, goods that are exported result in financial resources flowing back into the home country. Thus, the citizens of highly productive country are likely to have significantly higher standards of living than are the citizens of a country with low productivity.