28 May 2018

Benefits of productivity

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 :

  • 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.