The ratio of standard hours of work produced to hours actually worked is called

A man-hour (sometimes referred to as person-hour) is the amount of work performed by the average worker in one hour.[1][2] It is used for estimation of the total amount of uninterrupted labor required to perform a task. For example, researching and writing a college paper might require eighty man-hours, while preparing a family banquet from scratch might require ten man-hours.

Man-hours exclude the breaks that people generally require from work, e.g. for rest, eating, and other bodily functions. They count only pure labor. Managers count the man-hours and add break time to estimate the amount of time a task will actually take to complete. Thus, while one college course's written paper might require twenty man-hours to carry out, it almost certainly will not get done in twenty consecutive hours. Its progress will be interrupted by work for other courses, meals, sleep, and other human necessities.

The advantage of the man-hour concept is that it can be used to estimate the impact of staff changes on the amount of time required for a task, which can done by dividing the number of man-hours by the number of workers available. For example, if a task takes 20 man-hours to complete then a team of 2 people will complete it in 10 hours of work, while a team of 5 people will complete it in 4 hours.

This is, of course, appropriate to certain types of activities. It is of most use when considering 'piece-work', where the activity being managed consists of discrete activities having simple dependencies, and where other factors can be neglected. Therefore, adding another person to a packaging team will increase the output of that team in a predictable manner. In transport industry, this concept is superseded by passenger-mile and tonne-mile for better costing accuracy.

In reality, other factors intervene to complicate this model. If some elements of the task have a natural timespan, adding more staff will have a reduced effect: although having two chefs will double the speed of some elements of food preparation, they roast a chicken no faster than one chef. Some tasks also have a natural number of staff associated with them: the time to chop the vegetables will be halved with the addition of the second chef, but the time to carve the chicken will remain the same. Economies of scale and diseconomies of scale further lead to a non-linear relationship between the number of workers doing a given task and the amount of time it takes them to complete it. Some tasks cannot be done by less than a required minimum number of workers (e.g. lifting heavy loads) or they will be done with drastically better efficiency if the workforce exceeds a minimum efficient scale. In other cases an excessive number of workers might get in each other's way, reducing efficiency and the per person productivity of the individual worker.

Another example is the adage, "Just because a woman can make a baby in nine months, it does not follow that nine women can make a baby in one month." This adage is often cited in systems development to justify the belief that adding more staff to a project does not guarantee it will get done quicker.

Another problem with this model, as Fred Brooks noted, is that organization, training, and co-ordination activities could more than outweigh the potential benefits of adding extra staff to work on a task, especially if considered only over a shorter time period.

The similar concept of a man-day, man-week, man-month, or man-year[3][4] is used on large projects. It is the amount of work performed by an average worker during one day, week, month, or year, respectively. The number of hours worked by an individual during a year varies greatly according to cultural norms and economics. The average annual hours actually worked per person in employment as reported by OECD countries in 2007, for example, ranged from a minimum of 1,389 hours (in the Netherlands) to a maximum of 2,316 hours (in South Korea).[5]

Productive system hours[edit]

The concept of productive system hours (PSH) has been used in forestry in Austria and by extension to other work. It includes time for breaks and can be used to calculate how long it may take to complete a task, including required recovery times from physically strenuous work, as well as legally required breaks or other human interactions. If it includes 15-minute breaks, it is written as (PSH15).

Productivity measures the efficiency of a company's production process. It is calculated by dividing the outputs produced by a company by the inputs used in its production process. Common inputs are labor hours, capital, and natural resources, while outputs are generally measured in sales or the number of goods and services produced. Productivity can be calculated by measuring the number of units produced relative to employee labor hours or by measuring a company's net sales relative to employee labor hours.

Key Takeaways

• Productivity refers to how much output a company can generate with a given amount of input.
• Labor productivity, or how productive a company's workers are, is important for ongoing profitability.
• Measuring productivity can be done in several ways, with newer methods relying on software tracking and monitoring.

Calculating Labor Productivity

Overall employee labor productivity is calculated by dividing the goods and services produced by the total hours a company's employees during a certain period of time. For example, suppose a manager wants to calculate the productivity of all the employees at their company. The manager calculates that the company had an output of 30,000 units last month, while its input was 3,000 hours of labor. The productivity for the company is 10 (30,000 divided by 3,000); this means the employees produced ten units per hour in the previous month.

Alternative Methods of Calculating Productivity

360-Degree Feedback

With this method, an organization solicits and uses feedback that comes from an employee's coworkers. While this might sound combative, this can be a great method of evaluating their productivity in many cases. In this approach, productivity is evaluated by asking both superiors, peers, and subordinates. Coworkers are asked to rate how the employee in question has contributed to the company and how well they have fulfilled their duties.

The 360-degree feedback system requires each person involved to have a good understanding of what it means for that person to be effective at their job and a diligent worker. It also only works in situations where team members are interacting with each other closely. To successfully institute a 360-degree feedback system, a company must train employees on how to give instructive feedback honestly and objectively. Getting feedback from several peers also hopefully eliminates any bias that a single person might have against another.

Measuring Productivity Using Total Sales

Another common way to measure a company's labor productivity level is to divide the total sales by the total amount of hours worked. For example, company ABC had net sales of $15 million, and its employees worked a total of 20,000 hours over the last fiscal year. The output is the company's net sales, and the input is the number of hours. The company's productivity is $750 ($15 million divided by 20,000). This means for each hour of labor, company ABC's employees produced $750 in sales.

Online Performance Tracking

Online time tracking and project management software help a company track productivity automatically. Using electronic timesheets, companies track data about employees more accurately in real-time. These data can then be used to create performance reports for each employee. This is also a great solution to measure productivity for companies with remote workers. One limitation of time tracking is that time worked is just a single measure of a productive worker. What may matter more is how they utilize that time and the quality of their output.

Monitoring Social Media

Some employers make it a point to follow their employees on social media to see if they post to social media or surf the Internet during the workday. The idea is that Internet and Facebook scrolling detract from productive work, especially on company time. Company computers can have software installed that tracks such improper use and report it to management.

Measuring Productivity in Different Industries

Productivity benchmarks and targets depend on the industry. Some jobs already have basic benchmarks established. For example, customer service representatives have benchmarks that establish how long a “productive” call should take. Most companies need to establish specific benchmarks for themselves. In many jobs, like customer service jobs, employees don’t have much control over their own productivity (i.e., it depends on how many calls they receive, which they can’t control).

What term is used for the ratio of standard hours of work produced to actual hours worked?

What term indicates the percentage of time the work center is active compared to the available time?

Is the number of hours a work center can be used?

What is available capacity in production planning?