CHAPTER TWO
2.2 Effectiveness, efficiency and productivity
2.2.3 Productivity
Hope, Sr. (2000:125) defines productivity as the effective and efficient use of resources to achieve outcomes. Productivity is viewed as a ratio to measure how well an organization converts inputs into goods and services. The inputs or resources that are converted to outputs include labour, materials and machines. The Accel-Team [2004] noted that productivity can be improvement made by: achieving more output for the same input; achieving the same output from less input; achieving much more output for slightly more input; and getting slightly less output for significantly less input.
Field (2002) states that essentially, productivity is a ratio to measure how well an organization converts input resources, that is labour, materials or machines, into goods and services. The author noted that the ratio of inputs to outputs or the cost per good or service is not, on its own, a measure of how efficient the conversion process is. He presented a Productivity Conceptual Model (see Figure 1.1) in which the roots represent the inputs to the system, the trunk the conversion process and the foliage and fruits denote the system‟s outputs.
Figure 2.1: Conceptual model of productivity (Source: Field R. H. G., 2002:1)
In a health service institution, the inputs would include a mix of technical personnel skills and leadership as well as medical equipment required to carry out day to day health service delivery duties which would go through a conversion process to, ideally, provide affordable and accessible services to the institution‟s catchment population.
Field (2010) stated that in order for an organisation to achieve effectiveness, it needs to successfully respond to environmental factors. He noted that because organisations operate under different environments, there are various models for determining organisational effectiveness whose development is dependent on two dimensions, that is, the organisation‟s internal focus in relation to its external focus and its emphasis on flexibility versus control. Flexibility in organisational operations enables the entity to quickly adapt to environmental changes while control tends to support more maintenance of the status quo. Innovative activities are more valued in organisations characterised by a flexible management style while those that emphasise the importance of control, stability and predictability have more routine activities but face major challenges with regards to managing change. Effectiveness requires that an institution be concerned with the feelings, needs, and development of its human resources rather than just be task oriented. In the case of a health institution, when it is effectively in control of its internal dynamics, it stands a better chance of satisfying its most important constituents, that is, its stakeholders who include patients and the community at large.
A Herman Miller publication (2004) notes that productivity has been a human concern for centuries. It states that the Chinese philosopher Mencius (372–279BC) wrote about conceptual models and systems that would be classified in modern times as production-management techniques and as such, early thinking about productivity remains relevant to this day. As for effectiveness, what has become more complex is the measurement of production. It is generally acknowledged that in traditional productivity measures the unit of analysis in the measurement of productivity was the individual which, however, may be irrelevant in measuring the productivity of knowledge work because increases in individual productivity does not necessarily translate into the productivity of the organization. What matters most, in organisational settings, is the productivity of the team which becomes the unit of analysis. Managers need to aim for the implementation of activities that lead to the achievement of overall organisational goals and this requires that special attention be paid to issues of organisational design, the harnessing of technological developments at work, and the effectiveness of human resource management and staff working conditions.
Organisations need to focus on implementing the critical activities that will lead to success and make optimum use of time. Miller (2010) concurs with this view as he states that there is need to gauge employee productivity through productivity indicators or metrics, also known as the critical success factors, which will depend on the nature of the services provided by the organisation or the corporate objectives. The identification of key performance indicators facilitate the measurement of progress towards the attainment of organisational goals. Productivity, therefore, depends on an organisation
eliminating the trivial or non-essential tasks to concentrate on the vital ones through the stream-lining of organisational work processes.
Weihrich and Koontz (cited in Kabumba, 2005:3) state, with reference to productivity in the African context, that: „ .... the urgent need for productivity improvement is recognized by government, private industry, and universities‟. The author also referred to a publication by the United Nations Economic Commission for Africa [UNECA] [1991:1] which stated that „…increased productivity holds the key to economic wealth and high standards of living in general, and … improved public service productivity is an important factor in promoting and sustaining socio-economic growth and development.‟
Organisations, both in the public and private sector aim at delivering results by focusing on ways to enhance their productivity levels.
Kabumba (2005:7) made a distinction between skill work, which tends to be more physical, and knowledge work, which involves less physical effort, and noted that the measurement of productivity tends to be problematic in service provision due to this distinction. Skill work, such as that done by technicians, is easier to measure while knowledge work, an example of which is management, is not easy to measure. It is generally accepted that productivity measures are particularly difficult to apply in service industries such as in the health sector due to the complexity of measuring service outputs.
Nevertheless, it is still possible to determine how well the resources of a service organisation are being used in the production of its services. It has been noted that the difficulty of measuring knowledge work is no excuse for failing to promote productivity in service sectors since even in these sectors it is possible to identify hard workers and those whose level of commitment falls short of organisational expectations.
In order to achieve productivity targets, organisations need to have the requisite resources including a skilled and committed workforce. Productivity measures are necessary for planning, monitoring, and improving performance as well as for the development of long-term organisational strategies. Such measures play a role in the motivation of staff as they help to identify the level of financial incentives to be paid for high productivity.