Return to Physical inputs

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 employ a very different mix of resources and methods of using them
  • However, 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 already 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
  • However, there’s 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
  • Most of them would be irrelevant to most managers – hence the need is 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


Leave a Reply

Your e-mail address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.