Productivity is computed by dividing average output per period by the total costs incurred or resources (capital, energy, material, personnel) consumed in that period. Productivity is a critical determinant of cost efficiency.
An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in revenues and other GDP components such as business inventories.
Well opinions are like ******* and I happen to have one:) If I hire 3 people to pluck chicken carcasses and pay them all the same amount, then I expect each person to pluck a very similar amount of chicken carcasses every day. But if one employee continually plucks 10% more carcasses every day than the other two, I would say he has a higher productivity. He might be a better chicken plucker because he has a better work ethic, or he might be a better chicken plucker because he has a brighter idea on the best way to pluck a chicken. Either way, I would bump him up the chicken plucking ladder to be an overseer. Then I would watch what his group did compared to groups headed up by other chicken plucking departments. If his group did better than other groups, he would get another bump up the ladder. Because his group would be more productive than the other groups.
Let's shovel sand for a living. If you can shovel 1.5 cubic yards of sand day in and day out, and I can shovel 1.25 yards of sand day in and day out, you are more productive than me.
Lets sell insurance. If you can write $400,000,000 of liability insurance every year, and I can write $3,500,000 every year, you are more productive than me.
The rub comes when you start comparing sales to cost. If you are selling 4 mil and your marketing cost is 500,000 and I am selling 3.5 mil. with a marketing cost of 300,000 then I suddenly become more productive than you.
Productivity is the correct output of your input.
Ask yourself, kid.
