Perceived drivers of labour productivity in organisations

Abstract

Productivity is one of the strategic areas in which organisations seek to achieve long-term prosperity. It has been argued that firms that can improve the input-output relationship would improve their profitability (Pearce and Robinson, 2003). According to the Organisation for Economic Co-Operation and Development –OECD (2001), there is not a single exhaustive definition of productivity. Their objectives of productivity measurement include technology, efficiency, real cost savings, benchmarking production processes, and living standards. The focus of this research project was not on how to generate growth in labour productivity but rather the factors that influence labour productivity. Therefore, the research project addressed the following objectives: • Identifying the distinct set of labour productivity drivers for an organisation. • Determining the order of importance of the identified labour productivity drivers for the organisation. • Identifying if there were any interdependencies among the identified drivers of labour productivity. The literature review was based on research done on Total Factor productivity (that is overall labour productivity), Leadership, Performance Management, Training and Development, Market Competition, Continuous Improvement, and Socio –Economic conditions. Based on the assertions that were been formulated in the literature review, and in conjunction with the research project objectives, the following research hypothesis was derived: There are factors that influence labour productivity, in addition to inputs and outputs of an organisation. Quantitative research was done through a questionnaire. The population for the research project were the employees of Astrapak. A balance among variability, precision, and confidence level was considered in determining the sample size (Diamontopoulos and Schlegelmilch, 2006). Using stratified sampling, surveys were sent to Astrapak employees within the three operating divisions (Rigids, Films, and Flexibles) and across the geographical regions of (Gauteng , KwazuluNatal , Western, and Eastern Cape. 143 surveys questionnaires were sent out. 59 questionnaires were completed and sent back, representing 41% of the total surveys sent out. Based on a population size of 3000 and the 143 questionnaires sent, and the success rate of 41%, the sampling error was approximated as 7.8%. Based on the substantive significance of the labour productivity drivers results, it was concluded that the factors of labour productivity, on which the research project was based, were substantially significant (at a 95% confidence level) to overall labour productivity. The statistical analysis results were that there were no significant relationships between overall labour productivity and the respective productivity factors. Substantive significance takes precedence over statistical significance, since the substance of the results has implications for theory, practice or policy (Diamantopoulos and Schlegelmilch, 2005). The top three labour productivity factors were motivation (Leadership category), continuous improvement (Continuous improvement category), and employee performance (Performance Management category). The results of the analysis of the Pearson correlations among the productivity factors was that only 98 (24%) of the Pearson correlation coefficients were statistically significant. Even though the type and quantity of labour productivity factors may be different, the survey results indicated that there might be interactions among the labour productivity drivers. Therefore, the interactions among the labour productivity drivers may not be ignored in evaluating the effect of labour productivity drivers on overall labour productivity. The research project on labour productivity drivers was not exhaustive of all labour productivity drivers. Therefore, the opinions of the respondents on other factors that they considered important were also captured in the survey. The top three factors that respondents considered important but which were not explicitly covered in the questionnaire were teamwork, communication, and company strategy and objectives respectively. It was recommended that the research study be done on a project basis within the Astrapak group of companies. The project would be focused on implementing the research findings of the study. One company would be used as an experiment group and the other companies would be the control group. Doing the survey, at both the experimental and control groups would guide the evaluation of the change in labour productivity.