We have already talked about how the calculation of sales profitability occurs. However, in addition to those factors that are directly taken into account in the calculations and are present in the formulas, there are a huge number of others that have no less influence on the final result. One such factor is labor productivity.
What is natural productivity
In fact, this is the classic definition of productivity, which is still being studied in high school. Natural productivity is the basis of more complex calculations. To understand how to calculate labor productivity, you can use the simplest formula:
PT = VHF / NWP .
The designations used in this formula are deciphered as follows:
- PT - the desired value, i.e. labor productivity itself.
- VHF - the volume of products released during the reporting period or another unit of time (shift, day, week, month, etc.).
- NWP - the number of production personnel, i.e. employees of the enterprise.
Not to be confused with labor intensity
So, we figured out a little how to calculate labor productivity. However, if you do not use these figures to your advantage, a set of dry facts will not work. In particular, those who wish to increase labor productivity should pay particular attention to rationing.
Labor rationing is the distribution of working time for production and / or operations. For rationing of labor to be competent, it is necessary to take into account both the complexity of the final product and the complexity of components. In this case, by labor input we mean the amount of time required to produce one unit of output.
Many people mistakenly believe that knowing how to calculate labor productivity, it is very easy to get the value of labor intensity, because this value is the inverse of productivity. However, in practice, things are somewhat different. This approach to business reduces output, causing many firms to wither.
Tr. = T / ORP
- Tr. - the desired value, in this case, the complexity.
- T - the amount of working time for a certain period of time.
- ORP - the volume of products released over the same period.
For maximum accuracy, the results must be presented in the form: t (hh: mm: ss) / product. This recording format accurately reflects the essence of the indicator.
Have you already managed to calculate labor productivity and labor intensity of your production? Then it’s time to find out what principles should be followed when setting labor standards.
Principles of labor regulation
- It is best to focus on aggregated indicators. What does it mean? For example, if we are talking about a packer in a store, there is no point in calculating how much time she takes to inspect one apple or cucumber. But to indicate how much of any product by weight it should process per shift will be quite appropriate. In addition to increasing productivity, you can also simultaneously identify the most conscientious and qualified employees and weed out those who do not meet the requirements.
- Everything is completely different with difficult work. It is not enough here to know how to calculate labor productivity - it is necessary to do this in relation to all operations of the cycle. A striking example is the work of electronics assemblers. If there is no such thing as labor regulation at your enterprise, even being the most skilled workers, they will spend most of the time on “coffee with buns,” and then do hack work in a hurry before the deadline.
Get acquainted with the experience of successful world-renowned companies, introduce effective know-how into your business - and then labor productivity will always be at its best!