Productivity variables

Productivity variables consisted of factors that are critical to ensure productivity. 3 types of productivity variable is here as discuss below:

v Labor consist of workforce whether skills, semi skill or non-skills. Labor skills are varied but the productivity still can be improved by improving on some key areas that affect the labor. According to Henzer, the labor productivity can be improve by improving on 3 areas which are basic education appropriate of an effective labor force, diet of labor force and social overhead that makes labor available. Social overhead is such as transportation and accommodation provided to foreign labors in Malaysian factories. Labor productivity improvement is the most talk about topic by management because it is something hard to manage as labor quality, skills are different, and parts of results in productivity can be qualitative rather than quantitative.

v Capital is an important asset to improve productivity. Capital goods are ready durable goods purchase used the business capitals that can be used as production function such as machinery and factory building. Businesses are investing a lot of money to equip themselves with latest capital technology or tools to improve their productivity. Example is investment in utilizing new machinery and information technology for production rather than using labor-intensive methods. Interest and taxes affect the capital investment and making it expensive. Drop in capital investment can results in drop of productivity.

v Management is one of factor of production and economics resources. According to survey, management is the most important key to improve significantly the productivity of the organization. This is because management can collect, disseminate and utilize their knowledge and skills to applicable level in organization to see the results in productivity. Management can used labors resources effectively and know how to use cost-effective capital goods to further enhance the business productivity. To create a strong and knowledgeable management, investment in training and education is necessary in organization.

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