Q&A - Outline some ways in which a business might improve its labour productivity
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How can a business improve its labour productivity? Here are some possible approaches;
- Measure performance and set targets – it is often claimed that “what gets measured, gets done!” if employees and management are focused on the desired level of productivity, they may be more likely to act and take decisions which are consistent with achieving the productivity targets. However, a business needs to ensure that productivity targets are realistic and attainable - otherwise they may have an undesired effect (e.g. lower employee motivation, or poorer quality and customer service)
- Streamline production /operational processes: this makes sense, particularly in service sector industries or other processes which are labour-intensive. Improvements in labour productivity can be achieved by removing unnecessary complexity from the product or process
- Invest in capital equipment (automation + computerisation): many processes traditionally performed by people can now be effectively undertaken by automated machinery. By reducing the labour input into production, a given level of output can be achieved for lower level of labour cost
- Invest in employee training: employees are often unproductive because they do not have the skills or experience to work efficiently.
- Make the workplace conducive to productive effort: there are many tangible and intangible steps that can be taken to improve the quality of the workplace; from better heating and lighting to provision of leisure or childcare facilities.
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