Improvement in productivity leads to prosperity. The more the productivity is, the more
the prosperity. Sustainable performance of an individual or an organization depends on
continuous improvement in productivity levels.

Accordingly, the products and services of a business organization, country, region or individual will stay in the market only if it or he has efficient means of production and its or his goods and services are cheaper and of better quality than similar products and services available in the market.

Productivity improvement is possible through usage of state-of-the-are technology, higher
quality raw materials, higher level of efficiency of operation, effective management
practices and higher levels of motivation amongst employees. In simple terms
productivity means higher level of output with same levels of inputs or lower level of
inputs for the same level of output. It is in general defined as the full, proper and efficient
utilisation of available resources, including money, materials, energy, etc.

In its broader sense, productivity can be viewed as an attitude of the mind of welcoming change, and an orientation towards work achievement. Productivity is the relationship between physical output and one or more of the associated physical inputs used in the production process.

It may also be defined as “the ratio of Output to Input” “doing more with less” or “the
quality, timeliness and cost-effectiveness with which an organisation achieves its
mission” or “a state of mind - mind being confident that tomorrow can be better than
today through one’s own efforts”.

The Productivity can apply to various entities, ranging from an individual to a company,
industry, or national economy. Physical Process Productivity, typically expressed as a
ratio, reflects the efficiency with which resources are used in creating outputs.Productivity can also be conceptualised in terms of value created.

There are a number of misconceptions surrounding the concept of productivity. At the
micro level, it is generally understood to refer to labour productivity, possibly due to its
well, established measure like the output and value-added per employee, labour cost, etc.

Perhaps this is the reason why most non-manufacturing organisations find it difficult to
appreciate the importance and relevance of productivity to their businesses. Sometimes,
productivity is confused with production, although they have entirely different

While production is the actual output, productivity is only a means to
achieving that output. It is concerned with an effective and efficient utilisation of all the
resources-capital, material, energy, information and human, and is applicable to all types
of organisations, including service organizations.

In simple terms it may be indicated that improvements in productivity can be brought about by :

* Increasing the output or maintaining the existing level of output and a reduction of inputs by avoiding wastage and a better utilisation of the resources.

* Increasing the output without any change in the inputs by adopting improved working methods.

* Realising a substantial improvement in the output with marginal increases in the inputs.

The basic goal of industrial development has been to provide for human needs through
increasing productivity and finding innovative ways to solve problems. Several studies
carried out during the past few decades, for specific industries have shown that new
technologies and technological innovations are the major driving forces behind
productivity increases.

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