We often talk about how to achieve productivity, but never about what it actually is. So today, let’s discuss the broad definition of productivity, as well as a more specific variant, labor productivity/workforce productivity. Although personal productivity is generally more our focus, the different types of productivity are not entirely unrelated.
The general definition of productivity from Wikipedia is:
“Productivity is a measure of the efficiency of production. Productivity is a ratio of production output to what is required to produce it (inputs). The measure of productivity is defined as a total output per one unit of a total input.”
High productivity, as defined here, is important because it means that the least amount of resources, energy, and effort are put into creating the most results. Companies strive to increase their workers’ productivity to ensure that the money they pay their employees gets the most work out of them as possible (within reason). But how is this measured?
One way of measuring productivity in the workplace is within labor productivity. Common metrics for input are number of hours worked, number of workforce jobs, and number of employees. On the output side, gross domestic product (GDP) and gross value added (GVA) are typical measurements that are made. High productivity is found when these metrics for input are low, relative to those for output.
You can find more in-depth information on how productivity is measured at the Organization for Economic Co-operation and Development’s (OECD) manual, titled Measuring Productivity.
GDP Measurement
One of the most widely used measures of productivity is Gross Domestic Product (GDP) per hour worked. This measure captures the use of labour inputs better than just output per employee. Generally, the default source for total hours worked is the OECD Annual National Accounts database, though for a number of countries other sources have to be used.
Criticism of GPD Measurement
- GDP measures physical transactions not (digital) services like today. While GDP might measure the goods you bought off Amazon, it fails to measure value created by Google or the new class of digital content producers. For example, the market cap of the entire car industry (minus Tesla), might be a huge factor in GDP measurement, but isn’t even worth 1/5th of Google’s market cap (maybe equivalent to Youtube if it was an independent entity).
- GDP is a poor measure of growth. Imagine if the world could do more with less — less energy usage due to more energy efficiency, better online communication reducing the need to travel, healthier people needing less medical services, etc. All of this would have negatively affected GDP measurements directly, but the world would like be better off. We need a measurement that measures value in other ways than just transactions.
What is Personal Productivity?
Tony Robbin says “Productivity without passion is just checking goals off a list”. Therefore, personal productivity should be about helping you do things better and more efficient so that you can do whatever it is that’s most fulfilling to you.
There is not one best productivity solution for everyone, but there’s a good enough system for almost anyone. The best system for you should help you get things out of your head so that you can go to sleep at night.
Priority Matrix is a software that helps with personal productivity. When you’re more efficient and effective, you feel better. We don’t need you to work more hours, we want you to get more out of your life. Priority Matrix probably does not increase GDP, but it sure would give you time back to spend on what matters most. What is the productivity measure of quality time with family or personal time?
Learn more about Priority Matrix here.