Tuesday, July 14, 2015

HOW TO INCREASE LABOR PRODUCTIVITY


Maximum productivity and thus maximum profits is the ultimate aim of all businesses. This would be relatively easy if the businesses were peopled with cyborgs but they are not; they are peopled with human beings with emotions and limitations. The Nazis tried to ignore these limitations and worked detainees to death and then replaced them; this was a method that worked but which cannot be applied in the modern world. The solution in the current times is paying closer attention to business practices and human psychology.

Efficiency brings greater productivity and higher profits and starts with reducing bureaucracy and cutting red tape. There is nothing that slows down the production process like red tape as demonstrated by the state sector in many countries and the former Soviet Union. The first step to reducing bureaucracy lies in keeping channels of communication open as in the Japanese ringi system, where the worker on the factory floor can access and talk to the manager. When the right people are given a free reign and not hampered by red tape, work will get done much faster.

A second business practice to avoid is denying change. New ways of doing things more efficiently are continually being found and refusing to consider these innovations will mean bankruptcy in the long run. The most obvious example to this is mechanization and robot technology, which has revolutionized the factory floor. No business can expect to compete in the modern world without the latest computer technology: businesses are global enterprises now and potential customers may be on the other side of the world. Such companies need to be able to arrange conference calls in cyberspace or Skype to be able to do business. The office of the future is a purely digital one where there is no paper. In short, keeping up with the times is vital for a company to realize its full potential.

Last but not least there is the human factor. People need to feel happy in order to reach peak performance and cracking the proverbial whip will have the adverse effect. Managers and supervisors should treat staff like human beings and show sympathy and understanding when needed. They should show appreciation and reward progress or good work; they should take a hands on approach when tackling problems and not hesitate to sit down and discuss issues with members of staff. Some companies have recreation rooms, ping pong tables – Yahoo – and policies like dress down Friday to keep people relaxed and happy. In short, managers need to respect their employees if they want them to be productive.


Increasing productivity doesn’t mean pushing staff and raising target figures it requires a knowledge of good business practices and human psychology. The sooner managers get their heads out of the clouds and make a genuine effort to reach their full potential the better.

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