Tuesday, March 5, 2013

Problems in Measuring Productivity - Difficulties

The difficulties or problems in measuring productivity are listed below

Image Credits © Prof. Mudit Katyani.
  1. Difficulty in barometer achievement : The achievement of an industry may be abstinent in agreement of aggregate (units) or amount (dollars). It is actual difficult to amalgamate both these factors.
    1. If the achievement is constant (similar), again the abundance can be abstinent in agreement of volume.
    2. If the achievement is not homogeneous, again the abundance can be abstinent in agreement of value.
    3. However, if some units are constant and added non-homogeneous, again the industry will face difficulties in barometer productivity.
    Similarly, it is actual difficult to acquisition out whether the by-products and work-in-progress should be included in achievement or not. If it is included, again it is actual harder to acquisition its value.
  2. Difficulty in barometer inputs : Most industries do not accept able annal of the inputs of land, labor, basic and machines. Even if such annal are available, it is actual difficult to account the exact amount of man hours formed i.e. the ascribe of labor.
  3. Factorial abundance :
    • Factorial Abundance agency to account the abundance of altered factors of assembly separately.
    • Some administration experts say that a individual agency of assembly cannot aftermath annihilation by itself. Therefore, it has no productivity. A individual agency of assembly has abundance alone if it is accumulated with added factors of production.
    • Therefore, according to these administration experts, the abstraction of factorial abundance is meaningless.
  4. Changing altitude : There is a connected change in the amount of inputs and outputs, superior of raw-materials, machines and tools, superior of labor, etc. All this creates difficulties in barometer productivity.
  5. Account area : It is actual difficult to admeasurement the abundance of account sectors like Banking, Insurance, Education, etc. This is because the achievement of the account area is intangible.
  6. Altered periods : It is actual difficult to analyze the abundance of two altered periods. For example, allegory of abundance during a war aeon with a accord aeon is meaningless.
  7. Difficulty in barometer man-hours : It is difficult to acquisition out the exact amount of advantageous man-hours. This is because accomplishment paid to the advisers aswell includes the amount of abandoned time.
  8. Technological change : Changes in technology will could cause a change in the attributes and superior of output. Therefore, altitude of abundance will become difficult.