Labor productivity is a very important indicator in production. Such information allows you to reduce the cost of unprofitable activities, to determine a decent wage for employees, to identify the most productive departments and workshops. But how is labor productivity calculated? We will devote an article to the answer to this question. At the same time, we will analyze the definition itself, present important formulas, designate factors that affect productivity, and look at a real example of how to increase it.
What is it?
Before answering the question “How is labor productivity calculated?”, Let’s consider what it is.
Labor productivity is an important indicator reflecting the efficiency of an enterprise. It shows the ratio of output to input raw materials. Reflects the level of fruitfulness of the expedient work of people in the production of material or spiritual goods.
Thus, labor productivity is the amount of work done (the number of manufactured products) that the employee performed in a specific unit of time (per hour, week, quarter, year). It is also the time spent on producing a unit of production (or performing a certain service).
Production and labor input
How is labor productivity calculated? It is calculated through a system of concepts of development and labor intensity. Consider them:
- Production is the quotient of dividing the volume of work performed (or manufactured products) by the number of employees (or labor costs). The volume of work (manufactured products) per unit of labor.
- Labor input - dividing the number of workers (labor costs) by the volume of output (volume of work done). The labor costs of the team to produce a unit of output.
The indicators of labor input and output can be calculated in qualitatively different categories: natural and conditionally-natural expression, norm-hours, cost characteristic.
At the same time, labor intensity is divided into several categories in production:
- Technological. The labor costs of those employees who are engaged in the main production process.
- Production service. Labor costs of personnel engaged in the field of production services, equipment repair.
- Production. The complexity of the first two categories.
- Production management. Labor costs of managing personnel, security companies.
- Complete. This is the sum of production and management labor.
Performance formula
Labor productivity is calculated as the ratio of output (work done) to the number of workers involved in this work.
The aforesaid can be issued in the form of a simple convenient formula. Here's how labor productivity is calculated:
P = Q / h.
Decrypt:
- P - labor productivity.
- Q - release of a certain product per unit of time (number of work performed per unit of time).
- H - the number of personnel involved in the action.
Methods of measuring labor productivity
How the indicator of labor productivity is calculated, we have examined. But in what quantities is it expressed? There are several possible options:
- Natural. Accordingly, standard values are used - meters, kilograms, etc. The advantage here is that complex calculations are not required. But the lack of limited calculations: you need to produce only homogeneous products and unchanged working conditions.
- Conditionally-natural method. The main thing here is that a characteristic is determined that can average the properties of several types of products at once. It is called a unit of account. This method is abstracted from pricing. May take into account differences in the complexity of the process, power and usefulness of manufactured products. But it is constrained by the same shortcomings as the previous one.
- Labor. Here, the ratio of labor costs for manufacturing products in standard hours is determined. How it's done? An already determined number of standard hours correlates with the actual hours worked. Such a method, however, is suitable only for a few types of production, since when used for multi-stress forms it is fraught with a large error.
- Cost. Accordingly, here the key unit is the cost of production. This is the most universal of all the methods presented. How is labor productivity calculated at repair plants? This method is used there. It allows you to average the performance of the state, industry and enterprises. But it depends on pricing and requires very complex calculations.
Formulation formula
Labor productivity is calculated by dividing the number of output (volume of work done) by the number of workers employed in this business. But what about working out?
Production - the ratio of the number of products to the number of workers. Or the price of products per unit of time. Calculation of production allows you to evaluate the dynamics of labor productivity by correlating planned indicators with real ones.
The formula here is also simple:
B = Q / T.
Here is what she means:
- In - development.
- Q is the volume of production. It is expressed in physical or value terms, as well as in standard hours.
- T - the total amount of working time spent on production.
Labor formula
We determined how enterprise productivity is calculated. And how to determine the complexity? This indicator is the opposite of productivity. Labor input is the ratio of labor costs and units of already manufactured products.
For its calculation, the following formula is used:
T p = T / Q.
Here's what the letters mean:
- T p - the complexity of the process.
- T - the amount of time that workers spent on production.
- Q is the volume of production. It can be expressed in value, kind, in norm-hours.
Performance Factors
How to calculate labor productivity in the enterprise on the balance sheet? The simplest formula we have defined above.
Why is labor productivity low? The workflow should be checked for a number of factors that inhibit it:
- Moral deterioration of the equipment used.
- Ineffective enterprise management, ineffective workflow organization.
- Inconsistency of remuneration of employees with modern market conditions.
- Lack of any structural shifts in production.
- Tense social or psychological atmosphere in the team.
Productivity Factors
At the same time, it is quite simple to find reserves for increasing labor productivity. They can be divided into three categories:
- Nationwide. Creation of innovative, modern equipment and technologies. Giving permits for a rational arrangement of production.
- Industry. Improving cooperation within the industry.
- Intra-production. Reserves of the enterprise itself are primarily opened with the rational use of their own resources. Something like this: the effective use of employee labor, the successful planning of the work schedule, and the reduction in the complexity of production.
Performance Improvement Example
Let us examine a rather striking example. This is the Cherepovets Foundry and Mechanical Plant. This company was actually on the verge of ruin. However, competent management of the production process helped to move from minus to plus, to achieve stable economic growth.
It should be noted that the enterprise did not follow the expected path of reducing the number of workers. The number of employees remains the same. But at the same time, the cost of products increased 10 times. At the same time, the output per employee in kind decreased by half.
Among other striking positive changes, it is important to highlight the increase in average wages. As well as the cost characteristics of production per worker. What is the secret of such positive dynamics?
One of the ways addressed by the top management of the Cherepovets plant is to change the system of remuneration for labor. Everything is quite simple: a progressive system of bonuses was introduced for employees according to two indicators - the fulfillment of a given production plan and the quality of products.
Labor productivity is an important indicator that helps to determine how successful the enterprise is, how well employees fulfill their responsibilities, how well the work process is organized. It is not enough to eliminate negatively influencing factors. It is important to turn to programs that can stimulate high labor productivity.