ABSTRACT
The productive capacity of a firm is built up as a result of the combination of a great number of diverse factors. A nation can increase the national income per head in two ways: By increasing the percentage of the population going out to work; and By increasing labour productivity. In other words, prosperity is determined by labour productivity. Productivity is output per unit of input, whether of labour, capital, raw material or other resource. Most people are aware of the relationship between productivity and capital investment. The higher the capital per employee, the higher the labour productivity. Modern methods and modern machines are normally an essential component of higher productivity. The 1967 Companies Act has made it possible to compare the productivity of firms in terms of annual sales per employee. To measure productivity we must be able to measure output.
