For the survival of any industrial organization productivity ratio must be at least 1. If it is more than 1 the organization is in a comfortable position. The ratio of output produced to the input resources utilized in the production.
Benefits derived from higher productivity are as follows :
Benefits derived from higher productivity are as follows :
- Improve profits because productivity helps to cut down cost per unit.
- Gains from productivity can be transferred to consumers in the form of lower-priced products or better quality products.
- Paying workers or employees at a higher rate because gains can be shared with them.
- A more productive entrepreneur can have better chances to exploit expert opportunities.
- Generate more employment opportunity.
- Overall productivity reflects the efficiency of the production system.
- More output is produced with the same or less input.
- The same output is produced with lesser input.
- More output is produced with more input.
- The proportional increase in the output is more than the proportional increase in input.
- It is greatly helpful in achieving overall prosperity and growth of an economy.