Productivity measures how much output a business gets from its inputs. The most common version is labour productivity: output divided by the number of workers. A question gives you output and worker numbers, and asks you to calculate it, compare two periods or comment on a change.
This lesson follows job, batch and flow methods in operations and productivity, and the idea comes back when you find a bottleneck.
What does the formula measure?
Labour productivity = output ÷ number of workers. It tells you how much each worker produces on average, which lets you compare a small team with a big one, or this month with last month.
You can use other inputs. Output per labour hour divides by hours worked, and output per machine divides by the number of machines. The method is the same: output over input.
Always write the unit, such as “boxes per worker”.
How do you compare two periods?
Follow these steps.
- Calculate productivity for each period using output ÷ input.
- Find the change: new minus old.
- Find the percentage change: change ÷ old × 100.
- State what it means for the firm in one sentence.
Worked example
Roti Segar Sdn Bhd in Kota Kinabalu makes bread. In March, 8 workers made 9,600 loaves. In April, a new mixer was installed and 9 workers made 11,250 loaves.
Step 1, productivity each month.
March: 9,600 ÷ 8 = 1,200 loaves per worker.
April: 11,250 ÷ 9 = 1,250 loaves per worker.
Step 2, the change. 1,250 − 1,200 = 50 loaves per worker.
Step 3, the percentage change. 50 ÷ 1,200 × 100 = 4.17%, or 4.2% to one decimal place.
Step 4, interpret. Each worker produced about 4.2% more. The new mixer may have helped, but the figures alone do not prove that, because the number of workers also changed.
The mistake to watch for
A common slip is to use total output as a measure of productivity.
Mistaken answer: “Productivity rose by 17.2%, because output rose from 9,600 to 11,250 loaves.”
That figure is the change in total output (1,650 ÷ 9,600 × 100). The firm also added a worker, so the answer does not say how well each worker was used.
The correction is to divide by the input first. Productivity rose by 4.2%, a much smaller number. Remember that more output does not mean more productivity unless it grows faster than the workforce.
Check yourself
Try these on paper, then open each answer.
1. Kilang Tempe Selangor made 4,500 packs with 15 workers. Calculate labour productivity.
Show answer
4,500 ÷ 15 = 300 packs per worker. Check: 15 × 300 = 4,500.
2. A print shop used 5 workers for 8 hours each, a total of 40 labour hours, to produce 2,400 leaflets. Find output per labour hour.
Show answer
Labour hours: 5 × 8 = 40. Output per labour hour: 2,400 ÷ 40 = 60 leaflets per hour.
3. Productivity at a sewing workshop rose from 40 garments per worker to 46 garments per worker. Find the percentage change.
Show answer
Change = 46 − 40 = 6. Percentage change = 6 ÷ 40 × 100 = 15%.
Where this leads next
Next, identify a bottleneck in a process to see which stage limits output, then use the operations practice set. When you need to check a division or a percentage, the ratios tool shows the formula trace.
Some students calculate correctly but write a final sentence that could belong to any firm. A teacher in online one-to-one Business tuition can help you tie each figure to the details in the case.