Tuesday, 27 September 2011

NAB Article: The Productivity Puzzle

The National Australia Bank has written a paper on productivity growth: The Productivity Puzzle. The paper looks at labour productivity and suggests that recent productivity declines might well be due to cyclical fluctuations; activity in the mining and utilities industries (as they build new productive capacity); and declining real labour costs (which may encourage more labour intensive production).

It's worth a read if you have any interest in this area.

Edit 28/9: Alan Kohler addresses the issue, and the NAB paper in Digging into productivity, the Aussie miner's way.

Edit 12/10: Ross Gittins in Look within to pick up productivity discusses the management style in those businesses that are most productive:

Edit 18/10: Glenn Dyer at Crikey discusses a Sydney Morning Herald report on employee productivity in At last, something that makes sense on productivity. The report includes the findings on a survey of employees on drains on productivity and identifies the main culprits as management issues, organisational structure, lack of innovation and outdated technology. Dyer looks at the performance of Goldman Fielder as an example.
The management practices that do best, according to the study, are being highly responsive to changes in customers' and suppliers' circumstances, encouraging high employee participation in decision-making, achieving on-the-job learning through mentoring and job rotation, making effective use of information and technology and attracting and retaining high quality people.

Of course, different managers have different cultures or styles. Some emphasise results, some their people and some coping with change. The study finds all three approaches can make a high-performance workplace. The one style that doesn't work is the ''control'' culture.

Wow. How'd you like to work for such a boss in such an enlightened business? Pity is, such firms accounted for only 15 per cent of the sample.

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