Productivity

Productivity is one of those terms that all think they understand but consensus is not on the definition.  Ghobadian and Husband (1990) point out that the productivity concept is viewed in slightly various ways:

Technological Engineering Economist
Productivity view: Productivity as the ratios of outputs to the inputs expended in its production. view efficiency as the relationship between the actual and the potential output of a process. Productivity as the efficiency of resource allocation

Also that productivity can be viewed at different level (Kendrick, 1993), from national level, through industry level, organizational level, team level to personal level and how to increase it differs according to level.

 “Another frequent problem is that people tend to confuse the meaning of productivity with a particular definition of a performance measure used at their company. A performance measure is usually designed to have a positive influence on the company’s productivity. However, it does not naturally mean that the performance measure is productivity. A measure and the meaning of a term are often two separate things.”               (Tangen, 2004)

Productivity can be measures in many ways but usually three traditional types of index productivity measures are distinguished:

Partial productivity measures ratios of output to one source of input, such as labour, capital, material or energy
Value added productivity ratios of net output (total output minus intermediate goods and services purchased) to the sum of associated labour and capital input.
(also called: Total-factor productivity or multi-factor productivity)
Total productivity measures ratios of total output to the sum of all input factors

It is necessary be able to separate partial productivity (i.e. output related to one type of input) from total productivity (i.e. output related to multiple types of input).


The Centre (CPPP) uses the term productivity as following:

Logo-Bullet
  • We adhere to the engineering view (improvements) on productivity
  • We mainly use partial and value-added productivity