ABSTRACT
Productivity reflects the extent to which companies succeed in deploying the production factors used (mainly labour and capital) efficiently in the production process. Economists usually measure it as the ratio between the added value of the goods and services produced, mostly in constant prices, and the factors of production used for this. The inclusion of several factors at once in the productivity standard allows substitution effects between the factors to be brought into account and is therefore, from the theoretical point of view, the most suitable
way of measuring the overall efficiency of the economic process. It is then a question of the so-called ‘total or multi-factor productivity’. In practice, it is not easy to measure, however (see Appendix 19A), and for this reason productivity is usually approached from a single factor (so-called ‘partial productivity’). This is usually labour, since, compared to capital productivity, labour productivity is more easily measured. The capital input generally consists of highly diverse goods (machinery, buildings, computers, etc.) and it is not always clear which part the production process ‘uses up’ in a given period. Labour productivity can be measured on the basis of the number of workers or via the number of hours worked by the workers. The latter method of calculation is preferred, since it takes account of overtime worked and the trend towards the shortening of working hours and part-time work.
