Productivity Measurement at National, International and Firm Level

Productivity Measurement at International, National and organization level. PRODUCTIVITY MEASUREMENT Productivity bar is the quantification of both the output and input resources of a productive system. The goal of productiveness measurement is productiveness improvement, which involves a combination of increased effectiveness and a punter use of available resources. While productiveness can be given the sort of short hand definition as the ratio between output and input USE OF PRODUCTIVITY MEASURES Productivity is a ask ray in evaluating and monitoring the performance of an organization, especially a backing organization.When directed at specific issues and problems, productiveness measures can be very(prenominal) powerful. In essence, productivity measures are the yardsticks of effective resource use. Managers are have-to doe with with productivity as it relates to making improvements in their regular. Proper use of productivity measures can give the manager an indication of how to improve productivity both increase the numerator of the measure, decrease the denominator, or both. Managers are also concerned with how productivity measures relate to competitiveness.If two firms have the same level of output, but champion requires less input this is due to a higher level of productivity, that firm will be able to charge a lower pecuniary value and increase its market share or charge the same expenditure as the competitor and enjoy a larger profit margin. at heart a time period, productivity measures can be used to canvas the firms performance against industry-wide selective information, compare its performance with similar firms and competitors, compare performance among various departments within the firm, or compare the performance of the firm or respective(prenominal) departments within the firm with the measures obtained at an earlier time.Productivity measures can also be used to evaluate the performance of an entire industry or the producti vity of a country as a whole. These are aggregate measures located by combining productivity measures of various companies, industries, or segments of the economy. NATIONAL take MEASUREMENT Since productivity is one of the basic variables governing economic output activity some mention of national productivity concerns would be appropriate. As a matter of fact, productivity may be the most valuable variable governing economic production activity.It is the fundamental controllable instrument in wealth production. Since other(a) economic variables depend on it, increase productivity tends to have a beneficial multiplying effect on other economic variables. Improving productivity is of national importance because, for a smart set to increase its standard of living, it must first increase productivity. Overall productivity for individual countries is calculated by dividing output, as measured by gross domestic product or GNP, by the countrys total population.Thus, productivity is measured as the horse value per capita outputs. An increase in this measure of productivity means that for each one person in the country, on average, produced more goods and services. Also if productivity increases, past profits increase. The resulting profits can then be used to overcompensate for wage increases (inherent in inflation) without having to raise prices. In this way, productivity gains actually support curb inflation. It has been estimated that technology was responsible for at least half of the offset in productivity.It would appear, then, that if the country wants to continue to increase productivity, technology may be the key. ORGANIZATION LEVEL PRODUCTIVITY MEASUREMENT For an individual firm or industry, measures of gross output, combined with labour, capital and intermediate inputs, correspond directly to a specific model of a production function with neutral or output-augmenting technical change. When multifactor productivityMFP measures are based on such a gross-output concept, MFP appendage approximates the rate of neutral, disembodied technical change.Alternatively, MFP measures could be based on a value-added concept where value added is considered a firms output and yet primary inputs are taken as a firms input. Value- added based productivity measures reflect an industrys capacity to reach to economy- wide income and final demand. In this sense, they are valid complements to gross-output based measures. At the aggregate level of the economy, gross-output and value-added based measures converge when gross-output measures are defined as sectoral output.Sectoral output is a measure of production corrected for deliveries within a given sector. From this perspective also, gross-output and value-added based measures are complements. A useful schema in the development of productivity measures is to start with aggregate value-added based productivity measures the necessary data tends to be relatively easily available and the sele ct between gross output and value added makes less difference than at the detailed industry level.INTERNATIONAL LEVEL PRODUCTIVITY MEASUREMENT NEED Interlinked monetary systems Technology/ service transfer Domestic and regional competitions Valuable tool for evaluation Problems of Productivity Measurements at International Level In vary rate measurements (often prices of similar goods not compared). All industrial level data not available. Social, Political, cultural factors not included. Data for developing countries is lacking.