How to calculate the productivity of a company? Method and examples

Productivity is an aspect that allows you to know how a company is doing. Using this indicator, it is possible to know if the organization is going according to plan and if there is an adequate distribution of tasks among the members of the company.

From the psychology of work it is known that to increase productivity it is necessary for the organization to provide a set of elements.

Not only the material aspects allow to achieve the production of goods and services more effectively, but also influences the well-being of workers and the environment in which they perform his work.

Today we are going to see what influences the productivity of a company according to organizational psychology, in addition to explaining how to calculate this indicator through an example.

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What influences the productivity of a company?

The psychology of work has shown and helped to understand that companies, their offices, factories, and other workplaces, are more than spaces in which the worker carries out his employment.

How these places are physically organized, the relationships with other workers, the facilities available at the time of performing their function in the company, among many other aspects, are key to understanding how efficient a company is and how productive What is it.

1. The social factor

One aspect that many employers routinely overlook is the relationships between workers. The human being is a social animal, therefore, he needs to interact with other people. The workplace is no exception. A correct relational dynamic can imply that workers are motivated to work, since going to the office or the factory will not only be to go to work, but it will also be to see your colleagues with whom you can share pleasant moments.

In a workplace where there is a purely employment relationship between employees, without even Their names being known, or even hostilities taking place, can be very damaging to the organization. This negatively influences the productivity of the company, since the employees will not offer the maximum of them and will even feel fatigued as soon as they enter the office.

2. Psychological / motivational factors

Another factor to take into account is the mood of the employees. A person who is going through a bad situation will not come to work at ease. This will influence not only the degree of individual productivity, but may also affect other people, spreading general discouragement and pessimism.

The ideal of companies, when discovering this type of situation, is to offer the person who is going through a bad time Go to the psychologist or take a few days off in case the problem is very serious. Thus, you can return with more energy and with a more motivating attitude.

3. Organization and leadership

The productivity of an organization depends in large part on how the different types of workers are organized. There are employees who act as leaders, others as dynamizers in the company, others facilitate communication, and many more types. A good distribution of this type of employees, taking into account their degrees of training and what they have specialized in, will allow obtaining the maximum degree of productivity in the organization.

For example, you can hire a person who knows a lot about accounting, but if this person lacks leadership skills, it would not be appropriate to place them as a manager in the company. Thus, personality is another aspect that influences good production dynamics in the organization.

4. Working environment

The work environment is often looked down upon, but it turns out to be fundamental to the well-being of employees. Work climate is understood to be the relationship between the physical and emotional environment of the workers. As simple as the color of the walls, the temperature of the room, the degree of illumination, among others, can mark the difference between a pleasant and pleasant workplace and one in which you are uncomfortable, wishing that the working day would end as soon as possible possible.

How to calculate productivity?

Every company is managed through processes, in which there are inputs and outputs.

By inputs or inputs we refer to the labor of the company, the money spent, the resources and machinery used, the energy required, the time used and, basically, everything that has been invested in the process. Instead, the outputs or outputs are the results of the process, that is, the goods obtained, the services offered and the sales.

Productivity, mathematically speaking, is responsible for measuring the relationship between outputs and inputs. Basically the result is the division between the outputs obtained from the process and the inputs inverted to generate those outputs.

Formula to calculate productivity

Labor productivity is the relationship between outputs and human resources, that is, the personnel involved in the development of products or the offer of services.

Basically this would be the formula:

• Outputs / inputs = productivity

Being:

• Inputs: units of work factor used.
• Outputs: Production obtained.

Examples

To better understand this concept we present the following example.

A dry cleaner has washed 100 suits in a week, paying its employees € 10 an hour, working 56:

To find out labor productivity in terms of labor and labor cost, two calculations would be made.

The labor productivity in hours would be:

• Productivity = 100 suits / 56 hours = 1.78 suit / hour

The value 1.78 refers to the amount of suits cleaned per hour in this company, this value being labor productivity.

Productivity taking into account the cost of labor would be:

• 56 hours x € 10 / hour = € 560

• Productivity = 100 suits / € 560 = 0.178 suit / €

This means that for every euro invested in labor, 0.178 suits have been cleaned..

Example with more factors

The previous example only took into account the money invested per worker. Now let's look at one in which more factors are taken into account, which allow us to know more accurately the degree of productivity of the company.

We have a dairy company, in which there are 10 workers who work 8 hours every day. Each of them produces about 20,000 yogurts a day that they sell at 1.25 each.

The machines used to make the yogurts are 40 and about 10,000 liters of milk are needed as raw material. Workers charge € 10 an hour, machines cost around € 20 a day to maintain as a whole, and milk costs € 1.50 a liter.

To calculate the productivity index in this case, we would do the following formula:

• Productivity = 20,000 yogurts x € 1.25 / yogurt / (10 workers x (€ 10 / hour x 8 hours / day) + € 20 maintenance + (10,000x € 1.50 / liter of milk)) = 1,6

The value obtained indicates the productivity. Values ​​greater than 1 mean that there is positive productivity, and less than this number, it is negative.

Bibliographic references:

• Black, S. AND. and Lynch, L. M. (2006). How to Compete: The Impact of Workplace Practices and Information Technology on Productivity. The Review of Economics and Statistics, 83 (3), 434-445.
• Kompier, M. and Cooper, C. (1999). Preventing stress, improving productivity. European case studies in the workplace. London, UK: Routledge.