# ABC of successful business: How to calculate labor productivity

On how the calculation of profitability is carried outsales, we already said earlier. However, in addition to those factors that are directly taken into account in the calculations and are present in the formulas, there is a huge number of others that have no less influence on the final result. One of these factors is labor productivity.

#### What is the natural labor productivity

In fact, it's a classic definitionThe productivity, studied still in the senior classes of a comprehensive school. Natural labor productivity is the basis for more complex calculations. To understand how to calculate the productivity of labor, you can use the simplest formula:

PT = VHF / NWP.

The notations used in this formula are interpreted as follows:

• PT is the desired value, i.e. the very productivity of labor.
• VHF - the volume of output 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 the laboriousness

So, we have sorted out a bit howcalculate labor productivity. However, if you do not use these figures to your advantage, a set of dry facts will not do anything. In particular, those who wish to increase labor productivity should pay special attention to standardization.

The normalization of labor is the distribution of the workertime for development and / or operations. To normalize labor was literate, it is necessary to take into account both the labor intensity of the final product and the labor intensity of the components. Under the complexity in this case, we mean the amount of time needed to produce one unit of output.

Many people mistakenly believe that knowing how tocalculate labor productivity, get the value of labor is very easy, because this value is the reverse performance. However, in practice everything is somewhat different. This approach reduces the output of products, causes many firms to wither.

Tr. = T / ORP

• Tr. - the required quantity, in this case - labor intensity.
• T - the amount of working time for a certain period of time.
• ORP - the volume of output released over the same period.

For maximum accuracy, the results should be presented in the form: t (hh: mm: ss) / article. This format of the record accurately reflects the essence of the indicator.

Have you already calculated the labor productivity and labor intensity of your production? Then it's time to learn about what principles should be followed in the normalization of labor.

#### Principles of work rationing

1. It is best to focus on the enlargedindicators. What does it mean? For example, if it is a packer in a store, there is no point in counting how long it takes to inspect one apple or cucumber. But to specify how much of any product by weight it should process per shift, it will be quite appropriate. In addition to improving productivity, you will also be able to identify the most conscientious and skilled employees in parallel and weed out those who do not meet the requirements.
2. Everything is completely different with difficult work. Here it is not enough to know how to calculate labor productivity - it is necessary to do this with respect to all operations of the cycle. A vivid example is the work of the picketers-adjusters of electronics. If such a thing as labor rationing is not available at your enterprise, even being the most qualified employees, they will spend most of their time on "coffee with rolls", and then before the deadline in a hurry to make a hack.

Meet the experience of successful companies with a worldwide reputation, implement effective know-how in your business - and then the productivity of labor will always be on top!