Productivity supersedes Production
Two terms that are often associated with each other
- production and productivity.
Production refers to quantity of goods produced while productivity attempts to measure the quality of the process involved in producing them. There are some interesting articles on investopedia describing productivity and its various forms. In particular, we find that labour productivity is defined as
amount of real gross domestic product (GDP) produced by an hour of labor
It basically divides GDP by number of labour hours. This definition might be a good approximation at measuring efficiency of an hour of work by an average labourer. There are other definitions too that we can look at if the above definition does not suit our needs (for instance, revenue per employee1).
In the above definitions, quantity comes into play with the underlying assumption that the GDP is an apt measurement of the outcomes produced by the organization or country (everything else being the same) and we hope to investigate this further.