One of the key parameters characterizing the economic efficiency of production is the indicator of labor productivity. It is necessary for economic calculations, as an indicator of the efficiency of labor of workers and the production enterprise as a whole.
Instructions
Step 1
The actual labor productivity of an operating enterprise is calculated based on the indicators obtained as a result of observation: total labor costs and the volume of products produced. To calculate labor productivity, the actual amount of production (in units of production or in terms of volume) is divided by the actual total labor costs (in man-hours). Thus, labor productivity is the reciprocal of labor intensity. Based on the specifics of the initial data, it shows how much output is actually produced by a given production in the actual production and economic conditions, per unit of living labor expended in production.
Step 2
To analyze the development potential and viability of an enterprise within the industry, economic theory uses indicators such as the current and potential labor productivity.
Cash productivity is calculated similarly to the actual one, but as the initial data, they take the maximum amount of products produced during the period with minimal labor costs, that is, under conditions when production operates in conditions of minimizing and eliminating associated costs and downtime. The purpose of this operation is to calculate the labor productivity that is maximally achievable in the given economic conditions (available equipment, raw materials, organization of production).
Step 3
Potential productivity, as a logical development of a general idea, considers the conditions for maximum output in the conditions available at this stage of technical development. It is supposed to use the most modern high-tech equipment, the best (of the possible) raw materials, etc., and, accordingly, the minimum achievable costs of living labor in the time dimension.
