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Productivity measurement

  • In practice, productivity measurement is not straightforward


  • How would you measure the productivity of a hospital, fund manager, police force, government ministry, bank or PR firm?


  • At organisational level, there’s no one meaningful total productivity measure available because of the complicated mix of processes and tasks, or outputs and inputs involved – and most organisations offer more than one product or service and each one may require a very different mix of resources 


  • But, at process or task level, there are many partial productivity measures possible


  • Some focus on just one output from just one input to a whole process or task – for example:


               Mortgages approved in a week  or   Tins produced in a shift  

                   Staff employed in a branch                   Canning line


  • They measure what’s got out of the input resource paid for and whether the trends are in the right direction or not


  • Partial measures let you compare actual with past performance levels in-house or best practices outside – and they raise alarms if and when things start to go wrong


  • Each individual manager should have at least one partial productivity measure – ones which focus his team members on their most important outputs and most costly inputs


  • Thousands of partial productivity ratios are possible


  • Perm any one output with any one input in any organisation and one can soon see the blizzards of ratios possible


  • However, most of them would be irrelevant to most managers – hence the need to focus only on the important outputs and inputs for each team
  • The few ratios that managers need will cover some 90% of their teams’  productivity picture


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