Factors Affecting the Efficiency and Productivity of Labor

Efficiency of labour refers to the ability to achieve a greater output in a shorter time without any falling off in the quality of the work – that is to say, increase productivity per man employed. The efficiency of a country’s labour force depends on a number of influences.

  • Climate: This can be an important influence on willingness to work, for extremes of temperatures or high, humidity are not conducive to concentration even on congenial tasks.
  • Education and training: Education and training produce skills and therefore efficient labour. Education has three aspects: general education, technical education and training within industry. A high standard of general education is essential for developing intelligence and providing a foundation upon which more specialized vocational training can be based. Technical training provided in the universities, colleges and by industry itself. Training within industry is given by each firm to its employees.
  • Working Conditions: Research has shown that if working conditions are safe and hygienic, the efficiency of labour will be higher than if the conditions were unsafe or unhygienic.
  • Health of the worker: The efficiency of the worker is closely related to his state of health which depends on his being adequately fed, clothed, and housed.
  • Peace of Mind: Anxiety is detrimental to efficiency. People (workers) may be tempted to overwork themselves to save at the expense of health to provide for contingencies like times of sickness, unemployment and old age. Others may be worried about their work or their private problems.
  • Efficiency of the Factors: The productivity of labour will be increased if the quality of other factors of production is high. The more fertile the land, the greater will be the output per mass, other things being equal. Similarly, the greater the amount and the better the quality of the capital employed, the greater will be the productivity of the labour. Efficiency of the organisation is even more important since this determines whether the best use is being made of factors of production
  • Motivating factors: These are factors which boost the morale of the workers and hence increase the efficiency. They include such things as free or subsidised housing, free medical benefits, paid sick leave, allowing workers to buy shares in the company and incorporating workers’ representatives in the decision-making of the firm. In this way the workers feel that they are part and parcel of the organisation and are not being used.
  • The Extent of Specialisation and Division of Labour: The greater the amount of specialisation, the greater will be the output per man. Division of labour increases the efficiency of labour.
  • The Entrepreneur: Land, capital and labour are of no economic importance unless they are organised for production. The entrepreneur is responsible not only for deciding what method of production shall be adopted but for organising the work of others. He has to make many other important decisions such as what to produce and how much to produce.

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