Question

Discuss the key differences between productivity in the production of goods vs productivity in the production of services, and list important factors that can help to improve productivity in services.

Answer 1

Goods and services both create revenue earnings. Therefore, productions of these two are having the same motive. Their productivity is also measured by a single and unique formula as below:

Productivity = Output / Input

But the concept of such measuring is slightly different because of the following areas:

1)In production of goods, output is the quantity of goods produced; but in production of services, output means the number of services provided.

2) In production of goods, input means the factors of production (land, labor, capital, and organization) in use for making such output; but in production of services, input means participation or involvement of labors for giving the best services.

Factors affecting productivity in services:

Efficiency: Improving the efficiency of labors can give better service, which could be done through training and development process within the organization.

Waste minimization: Effective use of resources can give higher output at the minimum input. Regulation and control within the organization can give such platform.

Motivation: If staffs are motivated more they can give service more, which ultimately increases output and productivity. Such motivation could be improved through job satisfaction process, like better working environment, increasing salary, sudden promotion, etc.