Prof Zamvar painstakingly explained during the B school days ,that Productivity was a management concept and not an engineering one. though in the late 80’s and early 90’s the formula for productivity and efficiency were similar.
Prof Zamvar highlighted that Productivity = value of output / cost of input.
Lets take the case of 2 people in 2 separate countries i.e India and US, say programmers churning out 50 loc a day
even when output of both is same. the productivity is starkly different due to wage difference in the 2 countries, what Mukesh Ambani derides as labor cost arbitrage.
Hence productivity is value and not cost / resource /hours focussed.
The devil in a typical corporate scenario is gross inability in valuing output i.e the chief determinant of productivity, more so in support functions. where we have ample cost metrics , but do we have output value metrics for support functions. also do we have value metrics for the line functions.
case in point in IT, how will we value the output , will we value by LOC tempered with complexity/ language factor. or will we value out put by features implemented. or something else
so isn’t the pursuit of productivity in words of John Maynard Keynes an irrational passion, for dispassionate rationality
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