Download Factors Influencing Productivity: Human Capital and Technology and more Study notes Human Resource Management in PDF only on Docsity! 2.6 HUMAN CAPITAL AND PRODUCTIVITY: Productivity measured in terms of output per man (or per man-hour) is broadly determined by two principal factors: (i) technological development, and (ii) employees‟ job performance. Of these employees‟ job performance depends primarily on (a) the ability of the individual employees (may be called the ability to work), (b) the motivation of employees (may be called the willingness of the worker to work) and (c) physical conditions of work. The following chart * spelling out these factors will help us in understanding the whole set of forces that have a bearing on productivity. Technological Development Employees Job Performance (a) Plant – size, capacity etc. (b) Raw materials (c) Job lay – out (d) Machine and Ability Motivation Physical conditions of work equipment design (e) Power utilization (f) Scientific Management Techniques (Standardization, work study. Etc.) (a) Skill (Aptitude Personality (b) Knowledge (Education, Experience. Training. Innovation Etc. (a) Formal Organization (Structure, Policies, Efficiency, communication, etc.) (b) Informal Organization (Size, Goals, etc.) (c) Leadership (Skill, knowledge, Type, etc.) (d) Need Satisfaction (Physiologist, Social and Psychological). (e) Union. (a) Lighting (b) Temperature (c) Ventilation (d) Rest pauses (e) Safety, etc. *Adapted from Report A. Sutermeister : People and Productivity. 9 95 ease at work through better ventilation, better lighting, improved safety devices, reduction in noise, etc. equally important is the need for making the workday reasonable in length, and for introducing suitable rest pauses to enable the men to recoup their energy lost in continuous work. The Hawthorne experiments showed that physical conditions of work were not directly and necessarily related to output. What really matters is the attitude of the employees toward these conditions. At the same time, certain studies made in England show that when the temperature gets beyond reasonable limits, this did tend to affect output even when the workers had high ability and high motivation. In any case, the management cannot run away from its obligation for providing the most congenial possible working conditions to the employees. Improvement in productivity brings the following advantages to the firm and the community at large : a) Reduction in the cost of raw materials (through increase in the productivity of raw materials) b) Reduction in labour cost per unit of output. c) Reduction in overheads and power costs per unit of output. d) Reduction in the price of goods. e) Increase in wages and salaries (through schemes for sharing the gains of productivity). f) Increase in the reserve fund that can be utilized for expansion and modernization. g) Better standards of living for people through increase in their incomes and improvement in the quality of goods that can be made available at cheaper prices. 96
