Many firms want to be as efficient as they possibly can because efficiency affects costs. So, if a firm can be more efficient, it can create its products at a lower cost and maintain the same quality standards that it has had previously. Efficiency is about minimizing the costs of producing one of your units of output.
Improve Labor Productivity
One way you can improve efficiency is by improving labor productivity. Labor productivity examines how much work you are able to squeeze on average out of each of your employees. The more work you can get out of each of the member of staff that you've recruited, the lower your cost is going to be. You’re going to get greater output from each of your workers.
Investment in Training
You can get your employees to produce more per hour by improving their skills. If you can equip them with a greater skill level, maybe they can work faster. Maybe they can get more work done in a given time period if they have a master's in management. So by training your members of staff, you might be able to skill them up so that they can work on a more rapid basis, allowing you to get more work per day from each employee.
Jobs Redesigning
Through redesigning people's jobs, you can actually free them up to be more productive and get more done in a given time period. This might be particularly true in manufacturing firms. If they find a way of redesigning the physical mechanics of how people are doing their jobs, they might get work done quicker. They can achieve this through redesigning people's work stations, redesigning the best way of completing a task, going back to some tailoring principles, doing some time and motion studies, and ascertaining the most efficient movements to complete a task.
Motivation and Rewards
Another way to improve productivity is to look at why people aren't getting more work done. Maybe your employees aren't working as fast or they're not producing as much as you deem physically possible. That must be down to their motivation and their willingness to produce work. So another simple technique to increase the amount of work and the amount of output of your workforce per given time period is to look at motivation and rewards.
You can tweak and restructure the way you’re motivating your staff. Also, you can modify the way you're paying them. You could inject greater rewards into your production process to give people greater stimulus to produce more. Your labor productivity may be a little bit low because people aren't working as hard or as fast as they could be. To solve that, you'd have to look at your motivation and rewards.
Innovation and New Technology
Maybe your employees aren’t as productive as they could be because there's inefficiencies in the tools, equipment, or the technology that you're providing them with in order to do that job. Your employees aren't working as fast or as productively as they could be because they're using outdated technology. Maybe your technology is slow, cumbersome, and it frequently breaks. Investments in new technology, giving employees new machinery, new equipment and more efficient tools to do their jobs might increase how much output they are able to generate per hour or per day.
Change Should Be Gradual
Improving labor productivity isn't quite a simple as just rolling out some measures of doing so. There might be difficulties with the implementation of each of these different ideas. So one question you should start with is whether the ideas you are using to increase your labor productivity might actually drive up the organization's costs. For example, if you're going to look at the motivation and are paying your reward mechanisms, is that going to drive up the cost of the firm?
Similarly, training is probably going to come at a cost. You might have to lose man hours as you're taking workers off their production tasks in order to skill them up and train them.
Related: How To Monitor Your Employees Productivity