CHAPTER ONE
INTRODUCTION
1.1 Background of the study
Productivity is a constant factor for every effective organization. Organizations gear towards effective productivity because it represents their value and creates a corresponding demand for organizational service. Organizational productivity is the retention power of every organization as it ensures the loyalty of its market share. Productivity however can be referred to as the quantity of work that is attained in a unit of time by means of the factors of production. These factors include technology, capital, entrepreneurship, land and labour. It is the link between inputs and outputs and increases when an increase in output occurs with a lesser than comparative increase in input. It also occurs when equal amount of output is generated using fewer inputs (ILO, 2005). Bhatti (2007) and Qureshi (2007) were of the perspective that productivity can be seen as a measure of performance that encompasses both efficiency and effectiveness. It can also be referred to as the ratio of output or production capacity of the workers in an organization. It is the correlation that exists between the quantity of inputs and outputs from a clearly defined process. The performance of a business which determines its continued existence and development is largely dependent on the degree of productivity of its workers. According to Yesufu (2000) the prosperity of a nation as well as social and economic welfare of its citizens is determined by the level of effectiveness and efficiency of its various sub components.
Productivity is a total measure of the efficiency or capacity to transform inputs that is raw materials into finished products or services. More precisely, productivity is a measure that indicates how well essential resources are used to accomplish specified objectives in terms of quantity and quality within a given time frame. It is suitable when measuring the actual output produced compared to the input of resources, taking time into consideration. Hence, productivity ratios indicate the extent at which organizational resources are effectively and efficiently used to produce desired outputs. Efficiency takes into account the time and resources required to execute a given task. Therefore, it can be concluded that effectiveness and efficiency are significant predictors of productivity.However, productivity is a function of effective use of all the factors of production which human resource is the driver of other resources. The implication of this is that productivity is highly dependent on the human factor of production. The way and manner the human resource is coordinated and applied can determine the result attached to productivity.
Flynn et al. (1995) claimed that there is a significant relationship between core quality management practices (technical factors) and quality management infrastructure (human factors); they mentioned that the human factors positively impact the technical factors. Their study, further, showed that the human factors have both direct and indirect impact on performance through their impact on technical factors of quality management. Indeed, the human factors act to create an appropriate environment to implement the technical aspect; this fact refers to the influence of the human factors on the implementation of technical factors. On the other hand, the human factors also impact organizational performance in the same way that the traditional human resource management impact organization performance (Ahire et al., 1996).Besides, Ahire suggestion was similar to the claim of Flynn et al. (1995); Ahire claimed that the human factors directly and indirectly impact organization performance. Furthermore, Rahman & Bullock (2005) examined the relationship between the soft factors (human factors) and the hard factors (technical factors) and their impact on organization performance. They found a positive relationship between both soft and hard factors and organization performance, since the soft factors directly impact the hard factors and organization performance. They also found indirect relationship between the soft factors and organization performance; the soft factors indirectly impact organization performance through their direct impact on the hard factors. As well, Abdullah et al. (2008) suggested that the effective implementation of the soft factors in the organization plays a central role in the quality improvement, which acting to improve performance and productivity. However, they examined the direct and indirect relationship of the soft factors on organization performance. Their results found direct positive effect of soft factors on organization performance, and they also found indirect effect of soft factors on organization performance through their direct effect on quality improvement that acts as a mediator factor for the relationship between the soft factors and organization performance.