how to calculate productivity
the calculation for productivity is straightforward divide the outputs of a company by the inputs used to produce that output the most regularly used input is labor hours while the output can be measured in units produced or sales for instance if a factory produced 10 000 widgets last month while being billed for 5 000 hours for labor productivity would be two widgets per hour 10 000 5 000 sales can also be used as a measure of output in the same factory let s say 10 000 widgets translate into 1 million in sales divide the 1 million figure by 5 000 labor hours to get the productivity number 200 in sales for each hour of labor real world exampleauto manufacturing giant toyota offers a prime example of high end productivity in real life the company had very humble beginnings but has grown to become one of the largest and most productive car manufacturers in the world its toyota production system tps is one of the main reasons for that 5tps includes a few of the following principles by enacting tps practices in its manufacturing every day toyota ensures the company is continually improving and operating at a high standard while resources are not being lost 