Factors affecting productivity: 

(A) Factors affecting national productivity    

1. Human resources

2. Technology and capital investment

3. Government regulation

(B) Factors affecting productivity in manufacturing and services

1. Product or system design

2. Machinery and equipment

3. The skill and effectiveness of the worker

4. Production volume

(A) Factors affecting national productivity -

1. Human resources

• The general level of education

• Use of computers and other sophisticated equipment by employees

• Employees need to be motivated to be productive

2. Technology and capital investment

• New technology depends on R & D

• Every industry and services put new technology into use, they must invest in new machinery and equipment

• Computer aided design (CAD)

3. Government regulation

• An excessive amount of government regulation may have a detrimental effect on productivity.

(B) Factors affecting productivity in manufacturing and services

1. Product or system design

• R&G is a vital contributor to improved product design.

• ‘Standardization’ of the product and the use of ‘group technology’ are other design factors that make possible greater productivity in the factory.

• ‘Value analysis’ can bring out many product design changes that improve productivity.

2. Machinery and equipment

• Once the product is designed/redesigned, then how it is made offers the next opportunity for productivity improvement. The equipment used –machines, tools, conveyors, robots, layout – all are important.

• CNC machines

• Computer aided manufacturing (CAM)

• Skill and effectiveness of the workers:

• The trained and experienced worker can do the same job in a much shorter time and with far greater effectiveness than a new one.

• Even the well-trained employees must be motivated to be productive as well.

3. Production volume

• Assume that the volume of output is to be doubled, the number of direct workers would have to be doubled and a few indirect workers might also be needed. But there would probably not be a need for more engineers, research scientists, head quarters staff persons or other support personnel. So if the output is doubled, the productivity of these support people is in effect doubled.

4. Economic growth

• The economic growth of a country depends on the national productivity.The national productivity will automatically increase if productivity of individual industrial and productive unit increases, we shall consider the factors that affect the productivity of an individual unit. They are as follows:

        • Land and building

        • Material

        • Machinery and equipment

        • Men (Labor)