Kinds of Productivity

Let’s take a look at the kinds of productivity. Two common measures of productivity are partial productivity and multifactor productivity. Partial productivity indicates how much of a particular kind of input it takes to produce an output. Labor is one kind of input that is frequently used when determining partial productivity.

Partial productivity assesses how efficiently companies use only one input, such as labor, when creating outputs. Multifactor productivity is an overall measure of productivity that assesses how efficiently companies use all the inputs it takes to make outputs.

Should managers use multiple or partial productivity measures? In general, they should use both. Doing so can help them determine what factors need to be adjusted or in what areas adjustment can make the most difference in overall productivity.