Productividad o Eficiencia - Lectura 2

8/10/2019 Productividad o Eficiencia - Lectura 2

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Productivity or Efficiency-

Measuring What We Really Want

Ellee Koss and David A. Lewis

Most productivity measures are geared toward easy quantification,

tending to evaluate the efficiency of an individual, group, organization, or

country. But to help ensureproductivity and quality, organizations need a

new definition ofproductivity that takes into account a multitude of factors

beyond inputs and outputs. These factors and their relative importance

must be solicited from management. This article details a new, improved

definition ofproductivity and explains how organizations can apply it totheir own situations.

Productivity(Latin: producere; proforward;ducereto lead or

draw out. the quality or state of bring forth, of generating, of causing to

exist, of yielding large results or yielding abundantly.

Efficiency(Latin: efficereto accomplish) the ability toproduce the

desired effect with a minimum of effort, expense, or waste.

In the last ten years, much has been written about productivity. Falling

produc ti vi ty has been blamed fo r the lo ss of U.S. le adersh ip and

competitiveness in the global arena. At least thirty individual produc-tivity centers have been established across the United States alone.

Although there is no universally accepted definition of productivity, most

measurements are geared toward easy quantification, and most researchers

define productivity as a ratio of inputs to outputs.

To date, most books and articles on productivity measurement have

Ellee Koss, Ph.D., is an organiza- focused on quantitative measures of productivity. These measures tend to

tional consultant specializing in evaluate the efficiency of an individual, group, organization, or country.the transformation to high per-

formance and organizationalAlthough there has been increased attention paid to what it takes to create

learning. Currently an associatean environment in which people can be more productive, the issue of

of the HumanResources Man-whether current measures of productivity are, in fact, appropriate measures

agement Group in San Francisco, has generally been ignored. But some progress is being made in thisshe has written articles on the role

direction. At the university level, for example, industrial engineering and

of vision in organizations and or- production management curriculatraditionally designed for efficiencyganizational transformation.

David A. Lewis Ph.D., is anexper t sare gradually abandoning strict Taylorism. Course titles are

associate pofessor of operationsbeing changed from work methods and measurement to productivity

management at the University ofmeasurement. The essence of this research lies in exploring the gap

. . . . . . .

Massachsetts at Lowell. He hasbetween the use or "standard measures or prductivity and the creation

writen numerous articles in the of appropriate measures of productivity, measures that enhance the

fields of quality and production ability to positively and structurally affect competitiveness and regain

leadership.

Ingeniera de la productividad

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Elle Koss and David A. Lewis

Careful observationreveals that our

discussions andmeasurements ofproductivity until

now have actuallybeen aboutefficiency."

In considering these current measures of productivity, we are struck

by the sterility of the numbers and their implications. The typical statement

that productivity goes up when inputs per unit of output go down, which

is mechanistically based and seemingly free from cultural bias, is very

appealing. A universally accepted definition makes comparisons-some-

thing that we, as human beings, seem to need-very easy. We can compare

individuals and groups within and across companies, as well as acrosscountries and across time. However, quality and other important ingredi-

ents of productivity are conspicuously absent from the formula. Moreover,

there appears to be a resistance to addressing the question, What do we

really mean by productivity? Careful observation reveals that our discus-

sions and measurements of productivity until now have actually been

about efficiency. If thats the case, then several important questions arise:

1. Why measure productivity?

2. What is productivity?

3. How can productivity be measured?

4. How does productivity relate to quality?5. How does productivity relate to efficiency?

THE SEARCH FOR A NEW DEFINITION OF PRODUCTIVITY

The desire to measure productivity in traditional ways seems to stem

from our desire to better ourselves and to understand how we are doing

(particularly compared to our competitors). Often, we need this confirma-

tion to come from external sourcessuch as a pat on the back, raise,

acknowledgment, or concrete proof. We are not satisfied to look inside

ourselves and examine, from our sense of self, where we are and how we

are doing. We have not been sufficiently trained to self-explore in this

manner. But because measuring up to someone elses standards seems tobe at the root of many psychological problems, why should we continue

to try to do that within work organizations? Perhaps, in rethinking the

process, we can invent a way to define and generate productivity that

reflects an organizations essence and desire to be true to itself. And, when

used as a reflexive exercise, it can support an organization, not only by

increasing its productivity, but also by acting as a mechanism to keep the

organization on track with its ultimate purpose.

Given the shift from an industrial to a service economy that many

Westrern countries are experiencing, along with an increasing emphasis on

quality and worker satisfaction, two questions arise. First, can traditional

measures of productivity be applied in the new environment? Second, even

if traditional definitions of productivity can be applied, are they still

appropriate? If we ask the question What does it mean and take to be

productive? a whole host of variables previously not considered in the

measurement of productivity are introduced.

For example, let us assume that commitment and determination may

be required by certain individuals or groups to be productive, But how can

National Productivity Review/Spring 1993274


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Productivity or Efficiency-Memuting what We Really Want

..,we need to askthe question Whatthe question What

does it mean to bedoes it mean to beproductive?productive?

they be measured? How can they be compared from one company to

another? Should they even be compared? Asking the question What does

it mean to be productive elicits culturally-based answers that are likely to

be different at personal, company, and societal levels. It also makes

measurement of productivity a very personal and specific issue. This is less

appealing, as it makes productivity measurement not generalizeable and

comparisons more difficult. Continuing along this same vein, productivity

becomes a way to tell how well youre doing against ones own appropriate

standards rather than those set outsidethe operating system. Productivity

measured solely in traditional input-output terms ceases to be sufficient in

this context.

To get a clear understanding of the measure of productivity, we must

first understand the process on which the measure is based. That is, we

need to ask the question What does it mean to be productive? Being

productive is a personal and organizational issuethat is, what it means

to one person or organization can be very different from what it means toanother. For example, at an ad agency, brainstorming and discussing ones

work usually are highly valued as productive endeavors because they can

lead to new ideas. But at a high-tech consulting firm, this sort of behavior

may be frowned upon and considered counterproductive. Productivity on

a manufacturing assembly line is distinct from productivity among leading

software designers. If an organization structures itself around individuality

and personal autonomy, teamwork and consensus building may be

considered wasteful and counterproductive. In an organization whose

founding beliefs value these attributes, the same behavior is considered

productive. Successful companies are realizing that there is value in dealing

with these soft issues and recognizing their impact. Quality, customerservice, excellence, and job satisfaction have become vitally important

aspects of productivity and deserve inclusion in its measurement. Given

these examples, we come to realize that definitions of productivity are also

culture-specific at the individual, organizational, and societal levels. What

kind of definition, then, may be general enough to encompass all of

productivity, yet specific enough to allow for accurate measurement? Let

us consider mathematical representations of both the traditional and new

definitions of productivity:

Traditional definition:

PR = f(I/O)

That is, productivity is a function of the ratio of inputs to outputs.

New definition:

PR =f(X1, X2, Xi,....,Xn)

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Elec Koss and David A. Lewis

In the process of

both defining

and measuring

productivity a

change in an

organizations

productivity will

tend to occur.

The Xis indicate a series of factors agreed upon by individuals, an

organization, or a country as important in determining productivity.

These factors may also have a time dimension.

Let us consider an aspect of productivity to be that which enables one

to generate something real or the act of bringing forth something new.

There is the time-honored notion that pregnancy is a time when a womangets to be productive by doing nothing. Extending this metaphor to

organizations, that which happens during a gestation period (for example,

R&D), as well as that which occurs during manufacturing, is productive.

Similarly, a chief executive recently reported that some of his most

productive thinking occurs when he takes an hour to jog. When viewed

in this light, productivity can mean the process as well as the end result.

Productivity may be something other than efficiency.

With this definition of productivity, measurement also needs to be

culture-specific. Organizationally, there is a need to reflect on what it

means to be productivewhat is valued, what is not, and what is the

organizations vision of productivity. (This process, in itself, may effect ashift in productivity within an organization,) Against these standards we

can measure the productivity of individuals and organizations. By nature,

the measurement would be time-specific and mission-based. In the

process of both defining and measuring productivity, a change in an

organizations productivity will tend to occur. This is especially true if the

process involves participation, ownership, and commitment throughout

the organization. It will not tend to work if it is interpreted as an edict from

above. As the vision or culture of an organization changes, so too do its

definition and measurement of productivity. The systemic nature of this

evolution can be seen in Figure 1. Figure 2 presents an outline of a specific

process for both measuring and shifting productivity within an organiza-

tion. It is the focus on the process as much as the measure that enables the

desired shift in productivity.

In the actual measuring, one could create a scale and/or an index that

includes all the variables that comprise an organizations productivity. For

example, in a company that values relationships among employees and

efforts to forge new ground, productivity many be measured, in part, by

the following equation:

PR = time spent communicating with other employees + timespent

creating new possibilities for the organization + number of organiza-

tional problems solved + percentage ofproduction goals reached.

One would expect these measures to include goals regarding com-

pany values as well as production. To further clarify how this method

may be applied, let us consider a case study of a computer software

company.

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Productivity or Efficiency--Measuring What We Really Want

Figure 1: Evolution of Productivity Concept

VISION OF ORGANIZATION

MISSION/PURPOSE

CULTURE

VISION REGARDINGPRODUCTIVITY

DEFINITION PRODUCTIVITY

GOALS RESPONSE

DEFINITION

GOALS

MEASUREMEASURE

PRODUCTIVITY

RESPONSE

APPLICATIONAPPLICATION

THE NEW FORMULA IN ACTION

The mission of the ABC Software Company is to be the leading provider

of goods and services that help people build better systems more

efficiently. Furthermore, this vision includes becoming the most productive

company in the software industry through the creation of an organizational

and management structure that promotes teamwork and embraces change,

and a culture that fosters a balance between personal and company growth

and satisfaction. Incorporating this vision into the new definition of

productivity and assuming that productivity is composed of three factors

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Elle Koss and David A. Lewis

Figure 2: Measuring and Shifting Productivity in an Organization

KEY QUESTTONS: WHAT IS PRODUCTIVITY? WHAT IS OUR VISION OF PRODUCTIVITY? HOW

WILL WE KNOW WE HAVE INCREASED (OR DECREASED) OUR PRODUCTIV-

ITY?


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Productivity or Efficiency-Measuring What We Really Want

technology, management structure, and people/culturewe can arrive at

the following mathematical expression:

PI = (T+ M + C/ 3, where

PI = productivity indexT = technology factor

M = managerial factor

C = people/culture factor

Through discussions with upper management. four possible measur-

able components are identified to represent performance on each factor.

Performance is measured by comparing current results to those obtained

in a previous specified period. In this way, the absolute value of the

productivi ty index is no t as important as its rela tive value. Using

hypothetical data, we have defined the individual components to illustrate

the value of the model in the following sections.

F a c t o r I - T e c h n o l o g y

T1: Let productivity in technology be partially measured by what it

enables the end userthe customerto do. In this case, let us define it as

the average number of new lines of code per programmer per month.

T2: Productivity as expanding the boundaries of the effort of a new

system for a customer. Let us define it as the average time it takes to design,

develop, and integrate a new system.

T3: Productivity as functionality. Let us define this by using the average

number of useful functions per application design.

T4: Productivity as accurate processing. This can be defined as thenumber of bugs or errors reported per time period.

Each of these components is measured by comparing this years

performance to that of the previous year: [t/(t-1,)]. In cases in which a

decrease in the measure is a positive indication, we have taken the inverse

to capture the increase in productivity: [(t-1)/t]. Consider the following

scenario:

This year = time t. T1 = 200 lines of code

T2 = 4 months

T3 = 40 functionsT4 = 7 bugs per month

Last year = time t-l. T1 = 150 lines of code

T2 = 5 months

T3 = 35 functions

T4 = 10 bugs per month

Thus, T= (T1 + T2+ T3+ T4), where

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T1 = T1(t)/Tl(t-I) = 200/150 = 1.33

T2 = T2(t-l)/T2(t) = 5/4 = 1.25

T3 = T3(t)/T3(t-1) = 40/35 = 1.14

T4 = T4(t-l)/T4(t) = 10/7 = 1.43

so that T = (1.33 + 1.25 + 1.14 + 1.43) / 4 = 1.29

Thus, lookingat the technology component of the productivity index,we could say that the ABC Company is doing 29 percent better this year

than last year. But note that for the sake of simplicity, we have assumed

that all factors are weighted equally. In reality, this may not be the case;

however, the index may be adjusted appropriately by weighting each

factor by the agreed-upon weights and then dividing by the sum of the

weights.

Factor II: Management

As with the technology factor, four measures of performance were

identified that are consistent with the companys vision and goals. They

are:

Ml: Productivity as proactive management. This could be measured

through the hours per week spent reflecting on and planning for present

and future internal and external developments.

M2: Productivity as working together. This could be defined as the

number of crises in the past year due to redundancy, duplication of effort,

or lack of teamwork.

M3: Productivity as communication. This may be represented by the

percentage of employees who can articulate the organizations mission and

goals.

M4: Productivity as the ability to embrace change. This may be definedas the average amount of time it takes for the company to return to normal

(as defined by the organization) after a crisis situation. Again, each of these

components is measured by comparing this years performance to that of

the previous year. Consider the following:

This year = time t. Ml = 6 hours/week

M2 = 8 crises

M3 = 70 percent

M4 = 5 weeks

Last year = time t-l. Ml = 8 hours/weekM2 = 7 crises

M3 = 60 percent

M4 = 7 weeks

Thus, M = (M1 + M2 + M3 + M4)/4, where

MI = M1(t)/M1(t-1) = 6/8 = 0.75

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Productivity or Efficiency-Measuring What We Really Want

M2 = M2(t-l)/M2(t) = 7/8 = 0.88

M3 = M3(t)/M3(t-1) = 70/60 = 1.17

M4 = M4(t-l)/M4(t) = 7/5 = 1.40

which gives us M=(0.75+0.88+1.17+1.40) / 4 = 1.05

According to this computation, the ABC Company is performing 5percent better in the arena of management than it did last year.

Factor III.- People/Culture

Again, four measures of performance were identified. These are:

Cl: Productivity as a balance between personal and work life. This may

be measured, by proxy, through the percentage of personal goals achieved.

Professional goals and company goals are captured in other measures.

C2: Productivity as a working condition that satisfies and empowers.

Long-term (beyond five years) turnover rate may be an appropriate

measure.C3: Productivity as the appropriate match between employer and

employee. In this case, turnover rate may be an appropriate measure.

C4: Productivity as having the right people to accomplish the mission

and goals of the organization. This can be measured by the percentage of

company goals met in the last year.

Comparing this years to last years performance, consider the follow-

ing:

This year = time t. Cl = 40 percent

C2 = 20 percent

C3 = 12 percent

C4 = 50 percent

Last year = time t-l. Cl = 30 percent

C2 = 35 percent

C3 = 15 percent

C4 = 45 percent

Thus, C= (Cl + C2 + C3 + C4) / 4, where

Cl = C1(t)/C1(t-1) = 40/30 = 1.33

C2 = C2(t-1)/C2(t) = 35/20 = 1.75

C3 = C3(t-1)/C3(t) = 15/12 = 1.25

C4 = C4(t)/C4(t-1) = 50/45 = 1.11

which yields C= (1.33+ 1.75+ 1.25+ 1.11)/4= 1.36

One can then say that in the domain of people/culture, this company

was performing 36 percent better this year than last year.

Putting the three factors together, the overall productivity index for the

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Productivity or Eficiency-Measuring What We Really Want

has led to a decrease in productivity. In other words, our definitions of

productivity have the power to transform our organizations into whatever

we want them to be or to limit them to production houses that simply turn

inputs into outputs.

LEARNING TO ASK THE RIGHT QUESTIONS

The focus on productivity and the desire to measure it are products of

being human, of looking outside ourselves to discover how we are doing,

of never being fully satisfied and always wanting more. As competition and

complexity have increased dramatically, so has our need to know. Issues

concerning productivity and its measurement have flourished in this

environment. But has this additional energy expended on research and

discussion actually affected productivity? We fear not. As the twenty-first

century dawns and a global orientation becomes necessary, the concept of

survival of allrather than just the fittest gains more validity. As this happens,

we need to crack the marble block of productivity by redefining what itis that we truly want to measure and to speak about it differently. We need

to create something that is culturally and individually based, not something

to be compared across the board. We need to look inwardly and ask

ourselves, What do we really want? Only when we learn to answer the

following question will we be able to create a tool that begins to include

all the ingredients necessary to promote true productivity:

What is it that, when measured, will have an impact on our individual

well-being and our accomplishments in a way that we, our organizations,

and society as a whole can move forward and flourish?

ADDITIONAL RESOURCES

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ton: Kent Publishing Co., 1986.

Bahiri, S., Productivity Costing and Management, Vol. 10, No. 1, 1970, pp.

55-77.

Bateson, Gregory, Steps to an Ecology of Mind. New York: Ballantine

Books, 1972.

Benarly, Henry, International Productivity: A European View, Proceed-

ings of the Conference on Productivity Research, 1980. pp. 639-44.

Crandall, Francis and L. Wooton, Developmental Strategies of Organiza-tional Productivity, California Management Review, Vol. 21, No. 2

(Winter 1978) pp. 37-46.

Davis, Arthur, Productivity Improvement Through Forecast Modeling,

National Productivity Review, Spring 1987, pp. 160-67.

Esser, Aristide, Clive Simmonds, and Keith Wilde. How Should We

Measure Productivity? A Critique of Current Economic Analysis,

ReVision, Volume 7, Number 2 (Winter 1984/Spring 1985) pp. 76-88.

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Size, Productivity Measurement Review, Vol. 8, 1957, pp. 11-22.

Gold, Bela, Management Economics. Chicago: Basic Books, Inc. 1971.

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Perspectives,Business Economics, 1974,pp. 64-72.

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1986, pp. 20-27.Huddleston, Kenneth, Where to Go For QWL Assistance, Training and

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KOSS, Ellee, Dynamics of Organizational States of Being, in Barry Turner,

ed., Organizational Symbolism. New York: DeGruyter Press, 1990.

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Countries: An Application of a Hedonic Methodology to Explain

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Kuhn, Thomas S., The Structure of Scientific Revolutions, Second Edition,

Chicago, University of Chicago Press, 1970.

Mali, Paul, Managerial Strategies for Productivity Improvement, Proceed-ings of the Conference on Productivity Research, 1980, pp. 477-90.

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Conference on Productivity Research, 1980, pp. 305-18.

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No. 2 (Winter 1984/Spring 1985), pp. 101-06.

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Kent Publishing Co., 1983.

Seashore, Stanley, Organizational Effectiveness: Productivity and What

Else?, Proceedings of the Conference on Productivity Research, 1980,

pp. 495-504.

Siegal, Irving, Company Productivity: Measuring for Improvement.Kalamazoo, MI: W.E. Upjohn Institute for Employment Research, 1980.

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ity Measurement Review, 1987, pp. 3-10.

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McGraw-Hill, 1976.

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Productivity Improvement Opportunities, National Productivity Re-

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Productividad o Eficiencia - Lectura 2

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