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Productivity measures

  • In practice, productivity measurement is not straightforward

  • How would you measure the productivity of a hospital, fund manager, police force, government department, 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

  • Most organisations also offer more than one product or service – and each one may employ a very different mix of resources and methods for using them

  • However, at process or task level, there are many partial productivity measures possible and useful

  • 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 an input resource already paid for and highlight whether trends are moving in the right direction or not

  • They also 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 which focuses his team on their most important outputs and 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 to focus only on important outputs and inputs for each team

  • Overall, the few should cover some 90% of their teams’ productivity picture


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