Homework Help

Is labor productivity a part of a multi-factor productivity measurement?

user profile pic

jayson94 | Salutatorian

Posted October 4, 2013 at 3:55 PM via web

dislike 0 like

Is labor productivity a part of a multi-factor productivity measurement?

1 Answer | Add Yours

user profile pic

Michelle Ossa | College Teacher | (Level 3) Educator Emeritus

Posted October 4, 2013 at 4:32 PM (Answer #1)

dislike 1 like

In business, labor statistics, as well as the changes between outputs and inputs, are measured using the Multi-factor productivity formula (MFP). This formula, as it name implies, combines different variables that may affect production such as the budget needed to run the business (capital), what is needed to run and re-supply it (materials), and who is performing the tasks to produce (labor). This being said, labor productivity is one of the three factors measured by the productivity formula.

However, keep in mind that labor productivity itself also has its own measuring formula to determine output and input. In its formula, the total output of productivity is divided by labor input. This is how you can quantify whether you are over-hiring, or under-hiring. It also helps to determine wages and schedules for optimal production.

Join to answer this question

Join a community of thousands of dedicated teachers and students.

Join eNotes