Question 1
Measuring productivity allows us to forecast the country’s economic growth, however the
productivity data has limitations. Discuss these shortcomings.
A lot of the productivity studies will focus on the labour productivity but if your look
closely you will see that the labour productivity is inaccurate. The productivity data will
create an impression that labour is fully responsible for labour productivity, which is
true but most of the factors that govern productivity can also be largely influenced by
management, which is why management is as much the responsibility of management
as of the workers. Also, decisions made at the sectoral or national level can have a
direct impact on labour productivity
Labour productivity can increase without any role played by the workers. It can
increase if more capital equipment is used. That is when labour productivity increases
at the expense of capital productivity. However, when there is no increase in total
factor productivity, neither the employer nor the employee will be able to share in the
benefit of any productivity increase.
Labour productivity can also decrease due to factors not under the control of
employees. This will mostly happen when there is a cyclical downswing in the
economy or if there are interruptions in the production process due to lack of raw
materials or poor equipment.
The concept of productivity is a very elastic concept, meaning it changes with the
business cycle. Output may increase faster than employment during an economic
upswing and this will be reflected in improved labour productivity. During a
downswing, output will decline much faster than employment., which results in poor
labour productivity data even though the employees won’t be less productive.
The quality output is sometimes not taken into consideration when productivity is
measured. A better-quality product may be produced without any price increase and
this will indicate an improvement in productivity but it will not be reflected in the data.
Improvements in the quality of output while maintaining unchanged inputs is an
improvement in productivity, normal productivity instruments will represent
productivity growth.
This study source was downloaded by 100000853391718 from CourseHero.com on 09-28-2022 12:16:39 GMT -05:00
https://www.coursehero.com/file/165593186/economicsdocx/
Measuring productivity allows us to forecast the country’s economic growth, however the
productivity data has limitations. Discuss these shortcomings.
A lot of the productivity studies will focus on the labour productivity but if your look
closely you will see that the labour productivity is inaccurate. The productivity data will
create an impression that labour is fully responsible for labour productivity, which is
true but most of the factors that govern productivity can also be largely influenced by
management, which is why management is as much the responsibility of management
as of the workers. Also, decisions made at the sectoral or national level can have a
direct impact on labour productivity
Labour productivity can increase without any role played by the workers. It can
increase if more capital equipment is used. That is when labour productivity increases
at the expense of capital productivity. However, when there is no increase in total
factor productivity, neither the employer nor the employee will be able to share in the
benefit of any productivity increase.
Labour productivity can also decrease due to factors not under the control of
employees. This will mostly happen when there is a cyclical downswing in the
economy or if there are interruptions in the production process due to lack of raw
materials or poor equipment.
The concept of productivity is a very elastic concept, meaning it changes with the
business cycle. Output may increase faster than employment during an economic
upswing and this will be reflected in improved labour productivity. During a
downswing, output will decline much faster than employment., which results in poor
labour productivity data even though the employees won’t be less productive.
The quality output is sometimes not taken into consideration when productivity is
measured. A better-quality product may be produced without any price increase and
this will indicate an improvement in productivity but it will not be reflected in the data.
Improvements in the quality of output while maintaining unchanged inputs is an
improvement in productivity, normal productivity instruments will represent
productivity growth.
This study source was downloaded by 100000853391718 from CourseHero.com on 09-28-2022 12:16:39 GMT -05:00
https://www.coursehero.com/file/165593186/economicsdocx/
