Steps to improve productivity in Sri Lanka

Lal Fonseka

We have addressed this issue in a different angle in one of my previous articles before. But productivity is a subject we cannot wind up in one article. Hence, do not panic. we are going to discuss about productivity once more.

It is an accepted fact that productivity is a fundamental source of national development and corporate survival. The standard of living is determined by the productivity of a country's economy, which is measured by the value of goods and services produced per unit of national resources (human, capital and physical). In other words, Productivity of an organization is defined as the ratio of outputs produced by the organization and the resources consumed in the process.

Here the output refers to the quantity of goods and services produced by the company, and inputs refers to the quantities of resources such as capital, labour, material, physical facilities and energy consumed for producing the same.

Productivity is used to assess the extent to which certain outputs can be extracted from a given input. We can measure productivity for a single input resource such as manpower used, or for multiple resources. There can be many different types of productivity measurements depending on the type of resources considered.

Measures of productivity describe how well the resources of an organization are being used to produce input. They are very useful in achieving and maintaining high level of performance in any organization, particularly in improving the efficiency of various operations within the organization as well as for the total organization. Productivity measures are also used for planning, monitoring and improving performance at national levels.

Productivity can be improved by increasing the outputs keeping the inputs constant or by giving the same quantity of outputs with reduced inputs or by increasing outputs and at the same time reducing inputs. We can do this by several methods such as:

1. Improving systems and methods of operations. Among other measures this includes use of automation.

2. Improving planning and scheduling.

3. Improving control.

4. Improving motivation of people.

This article focuses on differences in labour productivity which is only one aspect of productivity.

Productivity can also be defined as how efficiently and effectively we use our resources at lowest possible cost. Labour plays a very important role and consider as a basic unit for the productivity of any organization.

There are many factors that influence on the labour productivity and it is very difficult to measure. There are many factors that increase the efficiency and effectiveness of any organization but labour is considered as one of an important element... Labour efficiency depends upon their skills and knowledge towards their job. If their attitude towards job is positive and they are internally satisfied with their job they will do their work honestly and they will be loyal with their jobs and their attitude at the work place will be better than those who are not internally satisfied with their jobs. So there should be right people at right place at the right time.

So there are many factors which can enhance the efficiency of the labour and decrease the efficiency of the labour. By eliminating the negative factors and increasing the positive factors we can increase the overall performance of any organization.

Sri Lankan perceptive

The bottom line of any organization is known to be the profit according to many entrepreneurs in Sri Lanka. As a result, they do always try to go after the profit rather than concentrating on Productivity. However, it is virtually impossible to find a reasonably well-informed business person today who is unaware of the productivity problem in Sri Lankan industry. For the last ten to fifteen years, productivity has clearly been the most widely discussed topic in business publications, management seminars, industry conferences and other similar forums. As on today, there is a separate minister appointed for the improvement of the productivity in the country. In my view, still the biggest problem in the country is the productivity improvement.

A majority of our entrepreneurs including Senior Managers are not willing to take well-calculated risks and at the same time they do not know how to work in harmony with a business entity.

W. Edward Deming, a respected statistician, has concluded that 85 percent of all productivity problems relate to management and only 15 percent relate to worker performance. Before his death in 1994, he revised his estimates to 94% and 6%. If a company is to achieve significant gains in productivity, the management methods and styles of the organization must change. But our managers think otherwise. They do always try to put the blame on the innocent labour force which will end with heavy labour disputes.

The standard definition of productivity is actually what is known as a partial factor measure of productivity, in the sense that it only considers a single input in the ratio. The formula then for partial-factor productivity would be the ratio of total output to a single input or: Managers generally utilize partial productivity measures because the data is readily available. Also, since the total of multifactor measures provides an aggregate perspective, partial factor productivity measures are easier to relate to specific processes. Labour-based hours (generally, readily available information) is a frequently used input variable in the equation. When this is the case, it would seem that productivity could be increased by substituting machinery for labour. However, that may not necessarily be a wise decision. Labour-based measures do not include mechanization and automation in the input; thus when automation replaces labour, misinterpretation may occur.

Other partial factor measure options could appear as output/labour, output/machine, output/capital, or output/energy. Terms applied to some other partial factor measures include capital productivity (using machine hours or Rupees invested), energy productivity (using Seventy per cent of Sri Lanka's workforce in the industry comprises small and medium industry labour. "The development of any country depends on its government's support for small and

medium industry", explained Samarasinhe, Director of Techno Management Consultants. This could be in the form of finance, business development, and research and development and marketing. Samarasinhe warned that if the situation is not immediately dealt with the whole industry could collapse in a matter of years.

Sri Lanka's holidays

Sri Lanka has a large number of holidays. In my opinion, as a first step towards development, this should be cut down by 60 to 70 percent and an effective programme should be introduced to increase the productivity of Sri Lankan workers especially in the public sector. If you step into a public sector organization, you will realize how weak they are in improving productivity in their organizations. You may be having so much of experiences where you were forced to go to the same public office two to three times sometimes more than three times for the same job.

It is sad to mention that only a handful of intellectuals in Sri Lanka are capable of providing knowledge and advice towards the country's well-being. And even fewer can actively implement such plans with dedication. Only a few officials who had been appointed as decision makers are educated, intelligent, honest and capable of fulfilling their tasks.

Most senior appointees in our country appeared still to be living in the 20th century. For them, matters of national development are of little interest. When these appointees are struggling to solve their own problems, it is ridicules to expect from them to solve the national development like improving productivity.

Most readers would agree with me that countries such as Thailand, Malaysia and Singapore had biggest problems than us. The public of these countries never attacked the ruling governments for appointing honest, well-educated and efficient individuals to high positions in ministries, government departments and other organizations.

Organizational Productivity

Employee behaviors and attitudes include how satisfied workers are with their jobs, how committed they are to the organization, how they interact with co-workers, how frequently they are absent, how efficiently and creatively they complete their tasks, and whether or not they choose to leave the company. Employee health and well-being, while not strictly attitudes or behaviors, must also be considered in this list because of their significant effect on employee commitment, task performance, absence, interaction, satisfaction, etc. For many years, behavioural scientists have examined how these attitudes and behaviors are related to each other and how they influence the input and output of an organization. A review by Podsakoff and colleagues concluded that satisfied and committed workers are more likely to put in extra effort at work, such as volunteering overtime or helping colleagues. In a study of almost 200,000 employees from 8,000 business units, Harter and colleagues found that those business units with higher average job satisfaction had lower staff turnover, higher customer satisfaction, and better business unit performance. Reducing staff turnover is a particularly important objective for organizations because it is estimated to cost up to twice a leaving employee's salary to find and train a replacement.

Workers' health and well-being can also affect organizational productivity. Sick employees cannot work to their full cognitive capacity and may be absent. They may also require paid sick leave or make additional claims on health insurance. In addition to physical sickness, Hardy and colleagues showed that employees with lower job satisfaction and psychological well-being (depression, anxiety) were more likely to be absent. The cost of employee absence includes not only lost work from the individual, but also disruption and performance losses for co-workers. The amount of work lost can be significant.

Establishing and maintaining a stable work force in the Manufacturing industry is paramount to quality production and profitability. Many workers in the manufacturing industry are skilled apart from the trainee workers normally known as the unskilled workers and do consider the manufacturing industry as the destination employment. But the there is a high labour turn-over in the manufacturing industry especially in the apparel sector. Even if a trained worker leaves one industry, he or she has to join the similar industry owned by a different set of people because of the skills captured by them. However there is always a big cry among the factory owners about the labour turn-over and the high absenteeism.

A better understanding of employee motivation is one answer to this dilemma.

Determining the reasons and factors why workers work has been the quest of industrial psychologists and management experts for years. It is generally agreed upon that if an employer can identify the reasons a worker is productive, reports to work on time, and remains with the company, the employer might then be able to apply these motivational factors unilaterally to the entire workforce. Applying this knowledge and fashioning the employment atmosphere to better accommodate the motivational factors of the employee, the employer becomes a more desirable employment destination, retaining employees longer, and increasing productivity and service at the same time.

Employee motivation

Employee motivation has been studied at length over a long period of time by various researchers. Through research, a significant myth has been dispelled and shown to be incorrect. The biggest misconception was that good wages were always the primary motivational factor among employees regardless of the industry by which they are employed.

This generalization, or supposed knowledge, has misdirected front line supervisors of industrial workers for years. The result has been misunderstood industrial employees who were more concerned with other motivational factors that their supervisors perceived as secondary or were not aware that existed. However, hospitality workers consistently rank good wages as their primary motivational factor. This is a good example of how motivation differs from one industry to another.

Identifying employee motivation is considered essential to understanding why an individual chooses one job over another.

Why does one employee work hard to complete a task and a co-worker feels no obligation to do the same; and, why does an employee continue to come to work when they have little or no desire to do the job? The questions of what motivates employees are of more importance today than ever before. Workforce morale is low due to downsizing and job instability, and there are no longer layers of management to supervise employees and keep them productive (McNerney, 1996).

Additionally, research indicates that productivity of employees decrease far more drastically after a co-worker quits for reasons of job satisfaction than when a co-worker quits because of illness (Sheehan 1993). There are a number of theories that have been developed by industrial psychologists and management experts that help to explain this dilemma.

It is time the human resource process of hiring, training, and retaining employees takes a step up to the next level. The paradigm has shifted and the hospitality and tourism industry, and the service industry must make the necessary accommodations to insure a high level of service to guests in order to remain competitive. There are new strategies to implement and the companies that reinvent the hiring process, providing superior customer service, are the organizations that will lead the service industry, but all of these strategies involve an increased understanding of employee behavior and their motivation.

Attitude

A person with a high level of attitudes holds positive feeling about a job, while a negative person holds negative feelings thereby impacting on labour productivity.

Viewing attitudes as being made of three components - cognition, affect, and behaviour - is helpful in understanding their complexity and the potential relationship between attitudes and behaviour. Keep in mind that these components are closely related, and cognition and affect in particular are inseparable in many ways.

Attitude is everything

Happy employees are productive employees. And it doesn't take a rocket scientist or a consulting firm to figure that one out. Negative attitudes can torpedo employee productivity much faster than nonstop basketball being streamed over the Web.

"An employee with a positive attitude usually enjoys the work that they do and feels empowered and recognized for their contributions," said Henning. "An employee that is complacent and does not really enjoy their work, but is simply there for a paycheque usually does not produce at a high level, develops a bad attitude and generally drags a team down."

Values

What are values?

Values are important to the study of organizational behaviour because they lay the foundation for our understanding of people's attitudes and motivation and because they influence our perceptions. As a result, Values are affecting the productivity because the values are very important to improve the organizational behaviour.

Values generally influence attitudes and behaviour. Suppose you enter an organization with the view that allocating pay on the basis of performance is right, while allocating pay on the basis of seniority is wrong. If you join an organization which rewards seniority and not performance, it will definitely affect the labour productivity.

Perception

Perception is a process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.

However, what we perceive can be substantially different from objective reality. For example, all employees in a firm may view it as a great place to work- favourable working conditions, interesting job assignments, good pay, excellent benefits, understanding and responsible management-but, as most of us know, it is very unusual to find such agreement.

Stress in the workplace

Stress tops the list of employee complaints. It is a major cause of many health issues. It's proven that a high-stress environment, whether personal or work-related, creates significant health risks. Hypertension, or high blood pressure, is one such problem and may increase the incidence of heart attacks. Stress in the workplace is a leading cause of employee health issues and absenteeism. This can arise for any number of reasons, including a too-rigid or too-lax work environment.

Worries about job security are on the rise in today's volatile market, which may be another cause of employee stress.

People get sick from stress at work and the cost associated with stress is hence significant to the employer. Han Salye, probably the leading authority on the concept of stress, described stress as the role of all wear and tear caused by life. Stress is associated with constraints and demands.

Constraints prevent the person from doing things what he or she desires. Demand refers to the loss of something desired. Stress is highest for the individuals who perceive they are uncertain as to whether they will win or lose and lowest for those who think that winning or losing is a certainty. If winning or losing is an unimportant outcome, there is no stress.

For example, if retaining the job or earning a promotion does not hold any importance for the person, the person has no reason to feel stress over having to undergo a performance review. In short, we can define stress as a dynamic condition in which a person deals with a situation or constraint or demand related to his/her desire for which the outcome perceives to be both important and uncertain.

Conclusion

In conclusion, my vast experience suggests that Sri Lanka needs to improve its quality and productivity, both being comparatively low compared to its regional competitors. The research economist said that the services sector which was driving the country's economy, and increasingly the highest employment generator, needs a well-educated workforce to drive the economy to its targeted US$ 4,000 per capita income by 2016.

It is pathetic to note that Sri Lanka's public spending on education as a proportion of GDP was lowest among its comparator countries, and it was reported that 93 percent of schools do not have A/L science streams.

The universities in the country were unable to meet the demand for higher education, which has left the 17 to 24 age group with limited access. Whatever said and done this huge problem should be addressed without any more delays. One way of addressing this issue is to get the assistance of the private sector amidst of the criticism of a certain sector in the country, if the state is unable to bridge this gap which had existed for a longer period. The National Productivity Policy was drafted in 2002; it had yet not been implemented. It is time for quality and productivity to become national priority.

Though one could argue that labour productivity of the country has grown year on year and is higher than neighboring countries, the rate of productivity of Sri Lanka is falling behind with other competitors. It is very well known that the country's growth is impressive. But for our surprise, others are growing faster.

Now we are well equipped with a much anticipated ministry for productivity advancement in the country, why not we all get together to support the present government to advance the productivity in the country with wasting any more time.