How to Measure Labor Productivity?

Definition of Labor Productivity


Most simply, productivity is the ratio between output and inputs.

Laboor Productivity = (Labor output/labour input) 

Within a factory, industrial engineers or factory managers and line supervisors measure the number of garments produced by a line of sewing machine operators in a specific time frame. Generally, the factory works 10 to 12 hours a day. Total production (output pieces) of a line and total labor involved in producing those pieces is required to calculate labor productivity. See the following example,

Assume that

Total production in day =1200 pieces
Total labor (operator +helpers) = 37
Working time = 600 minutes (10 hours)

So, Labor productivity per 10 hours is =Total pieces produced/ total labor input = (1200/37) Pieces =32.4 pieces.
Another productivity measure is labor efficiency, which is a comparison of the time spent working productively to the total time spent at work. These metrics are appropriate for analyzing and comparing the productivity of a particular production line or factory that turns out specific apparel products. However, comparing productivity levels across products or operating lines can be difficult, because the benchmarks differ from one garment to another.
Calculation of labor efficiency is shown below. Consider the above data.

SAM (Standard allowed minutes) of the garment = 8.9
Minutes produced by each labor =(32.4 pieces X 8.9) = 288 minutes
Available minutes was 600

So, Labor efficiency = (Produced minutes/available minutes) = (288/600*100)% = 48%

To compare productivity estimates across products, factories, or even industries, economists define labor productivity as the production value added that each worker generates. In this case, labor productivity equals the value of production divided by labor input. The value of production is generally measured as value added, equal to the gross value of sales minus the value of purchased inputs such as fabric, trim, and energy. Labor input is measured by total work hours. Labor productivity can thus be estimated at the national, aggregate level and for specific industries in an economy.


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