Answer to Question #100689 in Economics for sameh

Question

9. Discuss the problems of measuring productivity in actual work situations. How might productivity
be measured for each of the following industries?
a. Education (e.g., elementary and secondary education, higher education—undergraduate
and graduate)
b. Government (e.g., the Social Security Office, the Internal Revenue Service)
c. Manufacturing (e.g., soap and toothpaste, computers, heavy machinery)
d. Finance and insurance (e.g., banks, insurance companies, brokerage houses)

Answer 1

1. Discuss the problems of measuring productivity in actual work situations.

The measurement of an output of an industry is usually in terms of volume or value that is units or dollars respectively. It is always difficult to combine these factors because:-

a. In case of homogeneous output, productivity will be measured in terms of volume.

b. In case of non- homogeneous output, the productivity will be measured in terms of value.

c. However, in cases of both homogeneous and other non-homogeneous outputs, then the industry will face difficulties in measuring productivity.

2. How might productivity be measured for each of the following industries?

EDUCATION

Institutions of higher education are multi-product firms (that is, they produce multiple kinds of services). Inputs and outputs of the productive process are heterogeneous, involve nonmarket variables, and are subject to quality variation and temporal change; and

GOVERNMENT

Government uses tools of modern technology to present lots of data. They will be forced to increase efficiency and responsiveness for people to understand. Unfortunately, some information may be inappropriate and therefore present an incorrect measure of state and local government efficiency.

MANUFACTURING

In manufacturing companies, when several employees work on each unit measuring productivity becomes a problem because it is difficult to realize who works and who does not. It is therefore difficult to hold an employee accountable for low productivity especially those who finish parts of their jobs earlier waiting for others to finish. The best way to measure productivity in such companies is to tie incentive bonuses then the team will find ways to become more efficient.

BANKING

The quality of banks’ services is caused by the pursuit for productivity and profitability such as in credit assessment and risk monitoring. The underlying causes of low productivity is said to arise from tradeoffs that occur from financial stability. Therefore, if the financial supervision and risk management do not keep up with the financial stability, the productivity value will be positive at all times.