What is productivity? How to measure productivity?

What is Productivity?

Productivity is nothing but the ratio of output and input. It is used to measure the rate of production and service or efficiency. It is the total amount of output (e.g. amount of goods produced or services provided) per unit of total input (e.g. man (labor), machine, material, money, device and resource).

How to measure productivity?

We can measure productivity directly by dividing the total output by total input.  

So, Productivity = Output/Input

In the manufacturing industry, we can measure productivity very easily. Here output is final visible goods.

But in the service industry, output is not visible. Generally in service industry output is considered as generated revenue from each employee. Then that revenue is divided by the employee salary to measure productivity.

Example:

Suppose a sewing line produces 1000 pieces shirt by 50 workers in a day. What will be the productivity?

Here, input is labor and it is 50 person

          output is shirt and it is 1000 pieces

So, Productivity (Labor Productivity) = 1000/50 = 20 pieces per labor per day.