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Labor productivity is a measure of how much output a worker produces for each hour that the worker is at work. The point of measuring this is to determine how efficiently a worker is working and/or how efficiently the firm’s processes make use of that worker’s labor. In general, businesses hope to increase their labor productivity. They hope to do this because it makes them more profitable and more competitive.
The way to find labor productivity is simply to divide the amount of output produced by the man hours that the employee (or employees) works. In this case, the math is simple because there is only one employee. All we have to do is to divide the output (174 in the current week and 135 in the previous week) by the hours worked (40 in the current week, 26 in the previous week).
174/40 = 4.35
135/26 = 5.19
These figures represent the worker’s productivity in the current week and the previous week, respectively.
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