![]() In this case, instead of using hours as the input, you would use number of employees. You could also look at labor productivity in terms of individual employee contribution. This means that your company generates $53 per hour of work. To calculate your company’s labor productivity, you would divide 80,000 by 1,500, which equals 53. Let’s say your company generated $80,000 worth of goods or services (output) utilizing 1,500 labor hours (input). You can measure employee productivity with the labor productivity equation: total output / total input. Employee productivity has a huge impact on profits, and with a simple equation, you can track productivity per individual, team, or even department. ![]() Although you can’t control everything, you can control and measure employee performance. Many external factors can affect your organization’s productivity - the national economy, a recession, inflation, competition, etc.
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