In simplest terms, productivity is a measure of the efficiency of a person, machine, factory and system in converting inputs into useful outputs. Technically, “productivity” is about how well people combine resources to produce goods and services. It is about creating more from available resources such as raw materials, labour, skills, capital goods, land, intellectual property, managerial capacity and financial capital. With the right choices, you can achieve higher production, higher value, and higher incomes per hour worked. Productivity in a business is the ability of an organization to utilize its available resources in order to produce profitable goods or services as desired by customers. It is productivity that measures the performance of an organization and can also be used by companies themselves to evaluate their progress. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Productivity is a key determinant of cost efficiency. Productivity is calculated by dividing the average production per period by the total costs incurred or resources (capital, energy, material, personnel) consumed in that period. Basically, it is the measure of the output (products) of a production process per unit of input (labor and capital). Productivity is an overall measure of the ability to produce a good or service. More specifically, productivity is the measure of how specific resources are managed to achieve stated timely objectives in terms of quantity and quality. So, there are two main ways to increase productivity: increase the numerator (output) or decrease the denominator (input). Of course, a similar effect would be seen if both input and output increased but output increased faster than input, or if input and output decreased but input decreased faster than output. Organizations have many options for using this formula, labor productivity, machine productivity, capital productivity, energy productivity and so on. A productivity ratio can be calculated for a single operation, a department, a facility, an organization, or even an entire country. Productivity is an objective concept. As an objective concept it can be measured, ideally against a universal standard. Organizations can monitor productivity for strategic reasons such as business planning, organizational improvement or comparison with competitors. It can also be used for tactical reasons such as project control or checking performance against budget. Productivity is also a scientific concept and therefore can be defined logically and observed empirically. It can also be measured in quantitative terms which qualify it as a variable. Therefore, it can be defined and measured in absolute or relative terms. However, an absolute definition of productivity is not very useful, it is much more useful as a concept dealing with relative productivity or as a productivity factor. Productivity is useful as a relative measure of actual production output relative to actual resource input, measured over time or relative to common entities. When output increases for one level of input or when the quantity of input decreases for a constant level of output, an increase in productivity occurs. Therefore, a “productivity measure” describes how well an organization's resources are used to produce inputs. Productivity is often confused with efficiency. Efficiency is generally seen as the ratio of the time it takes to perform a task to a time..