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Models of Productivity Measurement: A Study

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Abstract

The productivity Measurement has come a long way since the early attempts to define it as ration of outputs to inputs. Several complex factors have nevertheless continued to confound attempts to evolve sound measures of productivity. Nature of operations, types of outputs, quality and other structural changes of outputs over time, etc., are amongst such factors. The paper deals with models of productivity measurement at firm’s level. The models can be grouped under four major categories: i) total productivity measures, ii) total factor productivity measures, iii) partial productivity measures, iv) composite productivity measures. A critical review is attempted to identify the main strengths and weaknesses of the suggested methodologies. The paper also discusses a comprehensive framework which attempts to relate the physical aspects of productivity measurement with the financial aspects. Other issues pertaining to the measurement problems are also considered. Finally attempt is made to identify areas needing further attention with regard to productivity measurement.

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