Productivity is a measure of a firm's efficiency.

A common way of measuring it is labour productivity which is calculating the output per person.

Productivity can be increased by:

• Investment in new technology,
• Training of staff,
• Motivating staff,
• Improving management.

The problem with increasing productivity is that the company may not have the money available to implement these improvements.

The more productive a firm is, the more competitive it can become (higher profit, lower prices etc.)