Submitted by Brickie78 t3_10q494s in explainlikeimfive
I was listening to some political pundit banging on about increasing productivity across different industries.
And something like a factory, I can see it: the more widgets you make, the more productive you are. Or how many sales you make in a call centre or on the retail floor. But how are you measuring the productivity of, say, a therapist, or a bus driver, or a teacher?
Or, same output but at lower production costs, for example by reducing the number of employees, or have them work more efficiently for a shorter period of time.
From the BLS website (this would be the US, but applies to other countries as well):
> Some businesses do not produce goods for sale, but instead provide services. It is more difficult to count the number of units of output in such businesses. > > legal services > haircuts, beauty salons > mechanics and repairs > medical and dental services > > Often, businesses produce more than one good or sell more than one service. It is difficult to add up, for example, 300 chairs, 60 tables and 100 beds to express the total output of a furniture business. > > Therefore, for most goods and services, we measure output by the dollar amount sold. Expressing output in dollars makes it possible to measure goods and services that are difficult to count, and to add up different types of goods and services.
Public sector jobs (such as teachers and bus drivers) would normally be excluded.
If you don't produce you have no productivity.
Anyway the success of your doing is measurable.
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Productivity means different things in different contexts. The easiest way to see productivity is in something like a factory where they produce things. But in many fields productivity can be how much value you're extracting, i.e. how much money is this industry making. The assumption is, if you are charging X amount for something and people are actually buying it, it must be worth that much. This assumption is based on really old economic theory where if something is overpriced people wouldn't buy it and they'd be forced to make it cheaper to reach market equilibrium.
Another measure of productivity can be growth. We generally measure the growth of the economy based on money and jobs. How many jobs has this industry added, which can indicate they are producing more.
TLDR; To simplify, productivity can be a tier list. Are you producing more? You're being more productive. Are you making more money? You're being more productive. Are you adding more jobs? You're being more productive.
So, the term I think you'd like to learn more about is called "KPI", or "Key Performance Indicator".
In general a KPI is broad term used to quantify (measure) productivity, we give it a vague name because it can be totally unique to the person or role, and even within a specific role but different managers, different people might measure different KPIs.
For example - a teacher
Possible KPIs might be - students who pass the class, students enrolled in the class, rates of student drop out from class, number of office hours per week, number of students attending office hours.
For a bus driver - Number of accidents per year, number of people who ride the bus, number of late (or early) stops, miles traveled, fuel burned. Etc.
Some KPIs you want to minimize, some you want to maximize, it totally depends on what you're tracking.
A big of being a manager is knowing which KPIs are important to track in a direct report and how to influence them.
As an employee, you might want to understand your KPIs and how you're being measured. Because you might think you're hot shit, but if you have terrible KPIs you're objectively not doing well in the role. Alternatively, it might help you understand what your manager wants from you. You might think you job is all about doing X really well, and you might be God's gift to X, but if all your KPIs are related to Y, again, you might not be performing as your employer expects.
This is such a huge subject that you can spend a decade at university learning business management and project methods only to find out that nobody knows how to measure productivity in a universal way. This does however not prevent people from trying, and usually failing.
For jobs like therapists you can try to measure productivity by measuring how fast patients stop requireing theraputic help. There are a number of factors you can measure such as the amount of perscribed medication (these cause side effects and kill the liver), episodes of psycotic breakdowns, how effective the patient is at work and at home, etc. But as you might imagine these numbers can be completely wrong in many cases. Not all therapists see the same type of patients so you will see very different performances. Some therapists might optimize for these metrics in a way which end up hurting the patient in the long run.
For bus drivers you can measure how often they crash (most full time bus drivers have about two minor crashes a year), you could ask the passengers, or just record complaints, you could measure how accurate they are between stops, some measure the acceleration on the bus trying to get the peaks as low as possible, you could measure the fuel consumption, etc. All of these are possible but again different drivers prefer different routes and will therefore perform differently according to these metrics. And you have conflicting metrics such as low acceleration rates penalizing emergency braking for safety, or making drivers run red lights to keep the time table.
Teachers are usually measured by standardized tests. All the pupils in the country take the same test which means you can compare the teachers and schools. But as soon as standardized tests are introduced it demonstrates social inequality in the sociaty and is also ripe for manipulation by the schools.
Usually when economists are discussing productivity, they're referring to the measure GDP divided by labor hours. So, for a therapist it's client billings per hour of therapist's time, for a bus driver it's passenger revenues, for a teacher it's pro rata tuition or the share of property taxes spent on education assigned to them.
Yes - but in all of those cases you'd subtract the costs of the input to the business, so you only count the money that goes to the companies own staff & owners as its productivity.
E.g. to estimate how much value the therapist produces you'd add up the feels their clients pay but then you'd subtract what they pay for room rent, what they pay to their superviser etc. For the bus company you'd subtract their cost of buying or renting busses etc ect. If a business is paying more for its inputs than it takes in revenues then its productivity would be negative.
For a bus driver, you could measure productivity by how often the departures are on time, how much fuel is spent for a certain route, etc.
Some of these are out of the driver's hands of course. They can't control how much traffic there is, but someone else in the company can change the routes to avoid traffic, service more people in the same amount of time by optimizing where the stops are based on how many and what demographic lives in the immediate area, etc.
This, in turn, makes the productivity of the bus drivers increase because they now get more work (measured here as passenger-miles per hour) done.
Nameless408 t1_j6nqzr6 wrote
Generally, your gut is correct: productivity is the measure of output over time. More output over the same time is higher productivity.
But industries without a hard output wouldn't be measured the same way. There isn't a concrete way to measure the productivity of teachers, though they could try to measure efficiency and extrapolate productivity from that (higher efficiency is "same output over less time" which is theoretically more productive).