Productivity

• 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.)