The productivity concept is used to measure the efficiency of an individual or process. To calculate productivity, divide total output by total costs consumed, where output is usually defined as revenue.

Productivity is commonly measured on a trend line, to see if the cumulative impact of ongoing training and process improvements are enhancing the ability of a person or business to generate greater output at the same or a reduced cost. There are many ways to enhance productivity. Here are several possibilities:

  • Automation

  • Employee empowerment to make more decisions at the local level

  • Employee training

  • Outsourcing to lower-cost providers

  • Process improvements

  • Product redesigns to make products easier to manufacture

Productivity may also be measured for an entire economy or business sector, and is used to conduct research on changes in such factors as the impact of technology, training, and process improvements on efficiency levels. Increases in productivity can increase living standards, and so is a major concern for governments.