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How Do You Know About Generating Productivity?

How Do You Know About Generating Productivity?

A field greatly concerning to capitalists and industrialists is in the relation to labor productivity as well as the impact of many factors which are around it such as the birth of computers, workplace practices, the infusion of capital, training and education etc.

The principal reason that although the impact of the human capital investment on wages of the workers had been extensively studied, there seemed to have little information about the human capital direct effect on productivity.

The Labour Productivity

Today there are many new studies have been conducted as well as published. In these studies, the relationship among labor productivity and many different things such as workplace practices, computer and capital, both in the nonmanufacturing and manufacturing sectors is examined

In the studies, the other factored-in issues including age and size of company, capital stock, material inputs, capacity utilization and the experience of workers.


The studies were conducted to test the factor determining labor productivity over a given period of time, the size of the capital stocks which are needed for the workplace practices, the equipment and materials use. These also include the human capital investment, computer use, high-quality work systems, hire practices and profit sharing.

However a prominent data showed the increase of employees’ educational level for more than one year can also increase productivity. (8.5 percent in manufacturing sector and 13 percent in non-manufacturing)

Decision Making and Training

It showed formal training (for example, schools, college, university etc.) could increase manufacturing productivity. The savvy of computer had also improved productivity, for example, in the manufacturing sector (services, sales, etc).

Other researches include that the participation of worker or union in decision-making can also increase productivity. In addition, it was found that the Total Quality Management (TQM) system just have very little effect on productivity.

In addition, it was increasing the workers’ proportion in decision-making in the workplace (for example, regular meetings) which showed a great effect on the labor productivity.

The Advantage of Profit-sharing

Indeed, studies showed that the profit-sharing which is extended to nonmanagerial employees could increase productivity much more than the scheme of profit sharing as well as the workers did. And benchmarking also increased labor productivity more than 5 %.

Computer Use

Today, computers have played an essential role in the increase of productivity (12% of output) in comparison to 80’s, when the investments of equipment accounted for just 7% of output.

The investments in computers as well as other Information Technology equipments were about one third of total investments of the 90’s.

Capital Investment

In total, education and training investments can generate higher productivity. In addition, it could promote higher growth of workers’ wage. Some researches had shown the raise of workers’ educational level can result in about between 8% and 12% higher labor productivity.

The only challenge which is remaining is to allow more workers to be equipped with these skills to enable them find ways to get better jobs.