Causal Indicators of Labor Productivity
Farming operations are complex with many moving parts, each contributing to the growth and prosperity of the company. In an industry where nothing is predictable, it’s important to distinguish between the controllable and uncontrollable factors that will impact the bottom line. Using tactics to increase labor productivity is a great way to advance operational production.
Productivity, different than production or efficiency, is defined as a comparison between operational inputs and outputs. Farms that create strategies to minimize what they put into their operation while generating greater outputs are likely to see an increase in productivity.
When it comes to labor productivity, there are many influential factors. For instance, human resources, capital spending, innovation, competition, and management policies may all have an impact on the productivity of employees. A recent study aimed to identify the most impactful elements on agricultural labor productivity by analyzing the relationship between productivity and industry attractiveness, employee characteristics, and job suitability (1). See the results below.
Industry attractiveness is defined as the distinct features that make employment in that industry desirable. Within the scope of agriculture, study results revealed a strong correlation between the industry’s desirable characteristics and labor productivity.
It may seem intuitive that high wages would be a great incentive for agricultural employment. Although wages are an important factor, other characteristics proved to be more influential. Interestingly, agricultural employees were more attracted by market demand, technology and work opportunity than the actual amount of wages.
In relation to labor productivity, the more that an operation presents these desirable qualities – high market demand, appropriate use of technology, increased work opportunity, and higher wages – the more productive the workforce tends to be.
“In achieving progressive farming…[t]he most primary requirement is the availability of a market for farm products. Other requirements include technology that always changes, the availability of a local and continuous production environment, the existence of stimulation to produce, and smoothly operating means of transportation,” (1).
Some employees are likely to be more productive than others. The following characteristics are indicators that employees may be more, or less productive.
Education: Within the field of agriculture, education is positively correlated with productivity. The higher an employee’s level of education, the more productive they are likely to be.
Social Status: This quality was based on the employee’s job status, facilities, and occupational routines. The study revealed that social status was negatively correlated with productivity. Therefore, the higher an employee’s social status, the lower their productivity is likely to be. It is possible, however, that these results are reflective of differing job responsibilities.
Culture: The study defined culture by parental influences, such as, parent occupation and the nature of the parent-employee relationship. Culture has a negative relationship with productivity, meaning that employees who are more influenced by their parents tend to be less productive than employees who are more distant from their parents.
Job suitability is defined as being congruent with an employee’s job qualifications and career goals. Although job suitability may seem like a motivational factor, it does not reveal a relationship with labor productivity. Employees who are better suited for a job in agriculture aren’t any more likely to be productive than their poorly suited counterparts.