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Definition - What does Productivity mean?

Productivity is a measure of how efficiently a job task is being completed or a company is performing. It is a measure of the effectiveness that compares input resources to output, in other words, costs to profit or result. Productivity can be looked at in whole or in smaller portions. For example, a company may look at the effectiveness of one employee for a single shift or the productivity of the entire production line for a year.

SureHire explains Productivity

Productivity is a metric that is commonly used by employers to track both overall performance and the performance of specific employees or company units. The reason why employers often use this metric for specific employees or company units is because it can help them to see whether or not a given employee is "cost effective."

In other words, productivity helps an employer to determine whether or not the money that they are paying the employee is returning a profit or if the company might be better with a lower staffing level, or productivity might be increased by investing further dollars into training for the employee(s).

For example, one division has an output of 100 units a day. If the employees work for ten hours in the day then the division productivity rate could be said to be 10 units per hour (output divided by input). If the company has a goal of 5 units an hour, then they can consider if less staff is needed. If the company has a goal of 25 units an hour, then they can consider if more staff is needed or if better training could increase the productivity of the unit.

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