The Meaning and Definition of Labour Productivity In Cost Accounting.
Labor productivity is an index of labor efficiency and indicates the effectiveness in utilization of labor. The potentiality of labor to produce is called labor productivity. While production is measured by the quantity of value of output, productivity is measured by the output in relation to input. Increase in production may not indicate improvement in productivity. Improvement in productivity does not necessary imply increased production.
Labor productivity can be improved by reducing the input of labor for a certain quality or value of output or by increasing the output from the same given quantity or value of input of labor.