Measurement of Labour Productivity
What is labor productivity and how is it measured?
Labor productivity is a measure of the output produced per unit of labor input. It is typically calculated by dividing the total output by the total labor hours or the number of workers. Labor productivity measures the efficiency and effectiveness of labor utilization and can be used to assess the performance of individuals, teams, or the entire workforce.
Why is labor productivity important for businesses?
Labor productivity is important for businesses as it measures the output produced per unit of labor input. Higher labor productivity indicates efficient use of resources, increased production efficiency, and potentially higher profitability for the business. It reflects the business's ability to optimize its workforce and maximize output with fewer resources.