Effectiveness and productivity of labor

     NATIONAL UNIVERSITY OF LIFE AND ENVIRONMENT SCIENCE OF UKRAINE 
 

     Department of agrarian sociology

      

     Paper course

       “Effectiveness and productivity of labor” 
 

     Fulfilled by:

     2nd year student, group №6

     Department of agrarian management 
 
 

Kyiv – 2011 
 
 
 

PLAN

Introduction………………………………………………………………………..3

Part 1. Theoretical aspects of effectiveness and productivity of labor…………….5

1. The substance of effectiveness of labor…………………………………….5
2. The system of indices of labor effectiveness. Productivity of labor as the main index of labor effectiveness…………………………………………..7
3. Indices and methods of measurement of labor’s productivity……………...9

Part 2. Reserves of increasing of labor productivity, their classification…………13

2.1 The concept of factors and conditions for higher productivity……………13

2.2 Reserves of increasing of labor productivity in agriculture……………….16

Part 3. The role of labor normalization in the reduction of labor input and rational using of working time…………………………………………………………….19

Conclusions……………………………………………………………………….23

The list of using literature………………………………………………………...25

   
 
 
 
 
 
 

  Introduction

   A highly efficient agricultural sector – is the basis of material and social well-being of society, without which sustainable development is impossible. It is a kind of guarantor and preservation of national security. Not accidentally agriculture is a priority area in the developed world. In these areas rarely experiment with his guard and police, using new scientific and technological progress.

   In our country the revival of agriculture is necessary. The basis for its effective and efficient development of agricultural production - is improving the technical level and quality of production, improvement of production and work, attracting highly skilled workers, motivation of employees.

   Also to increase the capacity of agricultural production requires a thorough analysis of all indices. One such indicator is productivity. It is also the indicator of efficiency of labor costs for the production.

   One of the main and most important functions of general economic and industry conditions in the domestic market realities of the management of human resources at all levels of the national economy, which will manufacture competitive products, to improve economic of employees and profit growth. Realization of these goals is impossible without boosting productivity and work efficiency.

   From this point of view there is a need in research productivity, because of growth of enterprise efficiency. An important contribution to research category of "productivity" have made such scientists, economists as: Marx, A. Smith, Bushena, Varzar,  Kerzhentsev, Kharchenko, Rubinsky, Slezinher, Umansky, and others. However, today in Ukraine is almost no conceptual research and development to improve the mechanism for efficient work, as the priority direction of state regulation, properly developed theoretical and methodological aspects of interdependence between performance and its stimulation, assessing the effect of stimulating work in systems. From the theoretical point of view there many interpretations, which makes the same terminology and the formation of a unified approach to the research work efficiency. That is what explains relevance of the chosen topic.

   It can be argued that in modern conditions of market relations in Ukraine held negative processes, which are characterized by imbalance between the assessed work and economic performance. These trends hinder the growth of national economy, since they have not corrected sign of labor market processes and, in particular, deficient performance management work without the direct participation of the state. Under such circumstances, in my opinion, it should be developed a conceptual mechanism of work for the mobilization of labor potential to increase work efficiency at all levels: from local to national.

   The aim of course work is the improvement of management efficiency based on such concepts that:

   - amending existing legislation in the definition of the term "labor efficiency";

-  implementation of effective methodological development during the change in the current legislation with the participation of scientists and scholars;

-  improvement of cooperation at all levels of the national economy between all parties and social and labor relations to achieve a balance between performance and pay based on its increasing responsibilities of employers for the timely and full payment of wages - as the event play its stimulating function and security enhancements rights of employees. 
 
 
 
 
 
 
 

PART 1. THEORETICAL ASPECTS OF EFFECTIVENESS AND PRODUCTIVITY OF LABOR.

1. The substance of effectiveness of labor.

   Labor performance – is its effectiveness, ratio of manufactured goods or assets (material and nonmaterial) to the cost of labor. The growth of labor efficiency means goods produced growth without increasing costs of labor. In economic literature and business practices of our country for the performance characteristics of the labor used category of "productivity," this characterizes the ratio of production and costs of its production.

   Labor productivity is a complex economic category, because labor is an important characteristic of human activity, is closely connected to the means of production and living labor.

   According to the recommendations of the International Labor Organization (ILO) distinguish the concept of "productivity" and "productivity of labor".

   Productivity – is the efficiency of use of resources (labor, capital, land, materials, energy, and information) during the production of various goods and services. It reflects the relationship between quantity and quality of goods or services provided and resources were spent on their production. Productivity allows you to compare production at different levels of economic system (at the level of some individuals, shops, businesses, organizations, industry and state) with the resources used. During their evaluation should take into account the rising cost of energy, raw material costs associated with unemployment, etc. [11, pp 43-63].

   Productivity is a general indicator that characterizes the efficiency of resource use for production. Modern economic theory argues that it is impossible to determine the exact role and share of the costs of various resources on production. Therefore, the efficiency is most commonly used indicator of productivity.

   Labor productivity – is the efficiency of this particular labor costs, defined number of products produced per unit of working time, or amount of time spent per unit. Productivity growth means increasing the number of products produced per unit time, or savings of working time spent per unit.

   In the process of living a particular work function is to create new value, and the transfer of working hours, materialized in the real elements of production, the product generated. That’s why labor productivity reflects the efficiency of both living and total (live and reified) work. There the notion of individual (living wage) and social (living and reified) work.

   Labor productivity is closely related to its intensity. Intensity describes the degree of labor intensity per unit time and measured the number of human energy spent. The higher level of labor intensity, those higher its performance. The maximum level of intensity is determined by physiological and psychological capabilities of the human body, which means that the intensity of labor is limited.

   Under normal social and work rate should understand this level of intensity of work, which ensures the rational use of physiological abilities while maintaining high productivity and health. It provides a long period of high efficiency and hence high productivity. If the labor intensity is higher than the accepted in society, some time is reduced productivity, increased work time loss, injuries, lack.

Tab. 1. The value of productivity growth in the economy. [2, p.195] 

     National income or gross national product if productivity increases faster than the cost figures. Reduced productivity is leading to inflation, trade balance passive, slow growth or decline in production and unemployment. (Comparative Dynamics of GDP, number of employees and real wages shown in the table 2). 

 

   Tab. 2. Comparative dynamics of GDP, number of employees and real wages.

(According to Statistical Yearbook of Ukraine 2010 [20]) 

2. The system of indices of labor effectiveness. Productivity of labor as the main index of labor effectiveness.

   In practice, economic activities for planning, accounting, performance analysis work utilizes indices of determining productivity on a scale of individual worker, manufacturing site, company, organization, industry and society in general. Indicators of labor productivity should be cross erected, comparatively, have a high degree of generalization, be universal in application.

   Labor productivity is measured ratio of production to labor costs (average number of personnel). Depending on the direct or inverse ratio are two indicators: output and labor content.

   Output - is the amount produced per unit time or number of products, which accounted for the average worker or a worker for a year, quarter, month. It measures ratio of production to the value of working time spent on its production:

Output = Q/T (formula 1.2.1) [10]

where Q - volume production; T - costs of working time.

      Labor content - a measure that characterizes the cost per unit time (i.e. the inverse value Charging):

Labor content = T/Q (formula 1.2.2) [10]

      The higher production output per unit time or the smaller cost per unit time, the higher the level of productivity. Output and labor input are interconnected and are in inverse dependence, but the percentage increase Charging is not equal to the percentage of saving labor [11].

   In the economy-wide labor productivity in the sphere of material production is determined by the ratio of newly created value – the national income – for a certain period (year) to the average number of personnel involved in material production during this period.

   The level of productivity in the enterprise can be characterized by indicators of labor intensity of production. Labor content reflects the amount of labor cost industrial-production personnel (living labor) on the production unit and is measured in man-hours (normal hours).

   Labor index reflects the direct relationship between output and labor costs. There are following types depending on the complexity of components of labor costs per unit:

   Technological complexity (TC), which includes all the basic costs of labor workers – both piece-workers and hourly workers:

TC = TV + TP (formula 1.2.3)

where TV – fixed cost of labor piece-workers;

TP - fixed costs of labor hourly workers.

   Total complexity (T) - is labor costs of all categories of industrial personnel:

Т = Т_{technological} + Т_{service production} + T _{production management} (formula 1.2.4)

   The nature and purpose distinguish normative, actual and planned labor. Normative defines the labor costs of labor for production unit or the performance of a certain amount of work, calculated in accordance with applicable regulations.

   Actual labor costs represent the actual work on the production unit or a certain amount of work.

   Planned labor – is a labor cost per unit or a specific work taking into account possible changes in regulatory complexity by implementing the measures provided a comprehensive plan for improving production efficiency.  

3.  Indices and methods of measurement of labor’s productivity.

   Methods of measuring productivity depend on how you define the volume of production. There are natural, and labor cost (money) methods.

   The level of performance determined by the number of products (scope of work or services) that it produces one worker per unit of working time (hour, shift, day, month, quarter, year) or the number of working hours spent on the production unit (work or services). Methods of measurement and basic indicators used in the practice of management are shown in Table 3 

     

  Tab. 3. Methods of measuring performance and productivity levels.

  [4, pp.20-47] 

   The essence of a natural method is that the volume of production and labor productivity calculated in natural units (pieces, tons, and meters). This method has wide application in the enterprise: the workplace, in the brigades, some polling stations in those industries that produce homogeneous products (electricity, oil and gas industry). The disadvantage of this method: a limited scope, which does not reflect the quality of products, you cannot take into account changes in the amount of progress, which in some areas has a large share of total production (construction, shipbuilding, etc.)

   If the company (department, district, brigade) produce something that has the same purpose, but is characterized by one basis, output can be calculated by a qualified natural units.

   Work method most often used in the workplace, in the brigades, industrial districts and in the shops, where the volume of products or work performed is determined in normal hours, after which it refers to actual time worked. For scientific and reasonable for a period of unchanging rules this method quite accurately describes the changes in labor productivity, is used to assess the level of productivity in certain industries, where diverse manufactured products and semis. Work method is of limited use because it requires stable labor standards, which contradicts the need to review the rules in the process of organizational and technical measures.

   In modern conditions, a universal method of measuring productivity is the cost (money), which uses cost indices output (gross, commodities, regulatory processing cost, clean, pure and regulatory conditionally clean production, gross revenue). Labor productivity by this method is calculated as the ratio of production to the labor costs of its production or average number of employees or branch [21, pp. 146-176].

   The benefit cost method is the ability to compare products varied with the cost of its production as a separate enterprise or industry and the economy. In this regard, cost method is used at all stages of planning and accounting as at branch and at the territorial level.

   Indicators of labor productivity, calculated on gross and commodity products, have similar advantages and disadvantages. Drawback is mainly that the level of charging more past due to reified labor costs of living than work.

   In some industries, such as sewing, printing, productivity calculated using the index of standard cost of processing. To do this, for each kind of product is determined through a period of consistent and constant ratios of expenses for items such as: the basic wage of production workers with social insurance, and guild, general costs. The drawback of this indicator: not characterize the entire volume of work performed (full cost), cost of production, the newly created value, not taking into account the actual cost of processing, but its normative value.

   Score of net product accurately describes the newly created products, if products are sold at market prices, but nowadays they make great influence on monopoly prices, which change the real contribution of the enterprise, the new value. The net production is calculated as the difference between gross output and costs of raw materials, semi finished products, fuel, energy, depreciation (reified elements of work):