Some managers believe the most effective means of increasing productivity in a business is to increase the wage of the employees. Discuss this view.

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Claire Newby, Business Studies.

Some managers believe the most effective means of increasing productivity in a business is to increase the wage of the employees.

Discuss this view.

        Productivity is the measurement of the level of efficiency within a business. It measures the relationship between the level of inputs and outputs of a business. There are two types of productivity, identified as labour productivity and capital productivity. It is beneficial for a business to have high productivity levels since the more produced by a business the more it can sell therefore increasing the revenue for the business. It is also beneficial because a higher productivity means more products can be produced for the same cost (this is because each unit cost is lower) thus making more profit on each product.

        This view can be compromised as both a positive and negative view for a manager to have. Generally you would expect managers with an autonomous style of management to take this view. Many people have looked in to management, Frederick Taylor developed methods in the early part of the 20th century. Taylor used techniques to increase production based on the view being discussed. Not everyone agrees with Taylor though, another management theorist Abraham Maslow built on the work of Elton Mayo creating the “Hierarchy of Needs”, which states pay is a basic requirement and other needs can not be satisfied if an employee is not content with pay.

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        Financial methods have been proven to increase labour productivity. Schemes such as the piece-rate system where the payment method involves the employee receiving an amount of money per each unit that he or she produces. This method is directly linked with productivity levels of employees.

Financial methods used in the workplace are used to boost morale of employees; motivation is strongly linked to increasing productivity. Other financial techniques include commission, profit sharing, performance related pay and share ownership. Along with the piece-rate system all these methods encourage employees in to being more creative and productive.

This view can also ...

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