Efficiency of Labour in India: Meaning, Factors and Importance | Economics

In this article we will discuss about:- 1. Meaning and Definitions of Efficiency of Labour 2. Factors Influencing the Efficiency of Labour 3. Importance 4. Causes of Low Efficiency 5. Suggestions for Improving the Efficiency of Indian Workers.

Meaning and Definitions of Efficiency of Labour:

By ‘efficiency of labour’ we mean the productive capacity or productivity of labour. The supply of labour measures the quantity of labour that is available in a country. However, the productive capacity of the labour force of a country depends not only on the quantity of available labour but also on its quality. This qualitative aspect of labour is emphasized in the discussion of efficiency of labour.

‘Efficiency of labour’ mean the productive capacity of a worker to do more or better work or both during a specified period of time.

For determining the efficiency of labour, following three aspects are kept in view:

i. The quantity or amount of a product is produced by a worker,

ii. The quality of the product produced by a worker,

iii. The time spent by a worker in producing that product.

The efficiency of that worker will be more than who produces more quantity of a better quality product in comparatively less time, under certain given conditions.

To understand it more clearly, study the data given in the Table 4-1:

From the data given in the Table 4.1, it is clear that during the same period of 7 hours, the worker named A has made 10 baskets. Under similar conditions, other workers named B, C and D have completed the making of 9 and 8 baskets respectively. In other words, we can say that the worker named A is more efficient than others. It should however be clearly understood that efficiency is a relative term. It is not an absolute entity.

However, when the conditions of work or quality of product are different, simple comparison, as done above, may not be correct.

For instance, examine the data given in Table 4.2:

It will be clear from the above table that the quantitative output (i.e., number of baskets made) is the same but the quality of work done differs. The qualitative efficiency of worker ‘H’ is highest, and that of ‘E’ is the lowest.

Thus, the ‘efficiency of labour’ is a relative term and it is measured by comparing the productive capacities both quantitatively and qualitatively of all the workers or all the categories of workers.

Definitions:

In simple words, efficiency of labour implies the quality and quantity of goods and services which can be produced within a given time and under certain conditions.

Therefore, it can be defined as under:

“By efficiency of labour is meant the ability of labour by virtue of which it is productive.” -J. K. MEHTA

“By efficiency of labour we mean the amount of work which a labourer can do within a given time.”-DR.SAXENA

Factors Influencing the Efficiency of Labour:

The efficiency of workers depends on several factors, because the workers are human beings and as such they have different feelings, different abilities, different choice and attitudes. Some have better productivity as compared to others.

The factors affecting the productivity (or efficiency) of workers can be classified in two categories:

A. General factors

B. Specific factors

A. General Factors:

The general factors are basically influenced by geographical and regional conditions and these are further classified as under:

1. Racial Characteristics:

The efficiency of labour to a great extent depends upon the racial group to which it belongs and the heredity of labour. People of some regions are physically sturdy and hard-working as compared to other places. As such, they are very enterprising and comparatively more efficient in jobs where physical labour is involved.

2. Climatic Conditions:

It has been found that climatic conditions influence the efficiency of workers. Generally, cold climate is more conducive to hard work than the hotter one. The workers of the temperate regions are harder working than those of tropical regions. However, extremely cold climate is also unfavourable for human activities. Accordingly, the productivity (efficiency) of worker is influenced by the climatic conditions to a considerable extent.

3. Standard of Living :

The standard of living enjoyed by the worker also affects his efficiency. If worker gets good food and leisure, their physical power and mental capacity increase because they do not easily fall ill. Indian workers are less efficient mainly because of low standard of living.

The specific factors which influence the efficiency of labour are discussed below:

1. General and Technical Education:

The general education broadens the knowledge, develops the intellect and improves the skill of a working person. The technical education trains a worker concerning different systems of work of the productive units. All these make an educated person more efficient and better in skill, as compared to an uneducated and untrained person.

For example- the use of computer has brought about a qualitative improvement in all the services and computer literacy has improved the efficiency of the workers to a great extent.

2. Personal Qualities and Character:

The worker possessing good moral character and having qualities like honesty, intelligence, perseverance, resourcefulness, sense of responsibility and ability to take correct decision (judgment) will definitely be more efficient than those who do not possess the above qualities.

Personal qualities of willingness to work and to progress in life, makes a worker more ambitious and he becomes more and more hard working and efficient. Such workers do not remain satisfied with their present position and always remain active for further progress in life.

3. Experience:

Besides general and technical education, the experience of the job makes a man more and more efficient person. The practical experience of work is gained by the worker during the training period. After that, he becomes perfect by doing day- to-day work, regularly and repeatedly; simultaneously his efficiency also goes on increasing. Thus, an experienced worker is usually more efficient than an inexperienced one.

4. Machinery and Equipment:

The type of machines, tools and the implements used for work, influence the efficiency of a worker to a great extent. With the modern and updated equipment, the working efficiency is more and the productive capacity increases. The outdated, old and worn out equipment, adversely affect the overall output (or the productive capacity); even though the worker himself may be highly efficient, but due to these outdated equipment, he will not be in a position to make use of his talent properly.

5. Factory Environment:

A properly lighted, well-ventilated and neat and clean working place provides pleasure to workers and improves their efficiency. On the other hand, dirty workplace, insanitary surroundings, crowded atmosphere, ill-ventilated and cramped factory sheds create an adverse psychological effect on the productive capacity of the workers.

6. Duration of Work:

The concept of forcing the workers to work for longer duration, to have more output has proved to be misleading, because instead of improving, it actually reduces the overall efficiency of the worker. Therefore, these days, the duration of work has been restricted to 6 or 8 hours per day and weekly holiday is also allowed.

The worker under such circumstances always feels fresh and attends to his work whole heartedly and sincerely.

7. Proper and Prompt Wages:

The adequate and timely paid wages, act as a catalyst to improve the productive capacity of the workers. The worker must be in a position to provide for himself and the family, the basic amenities of life, i.e., good food, etc., with reasonable quantum of comforts.

This is very essential to keep him in good health and mentally satisfied. On the other hand, the worries of ‘bread and butter’ (due to inadequate wages) affect the worker’s health, mind and psychology, and thus efficiency is adversely affected.

Besides fair wages, the worker should be paid timely, i.e., on some definite date may be weekly, fortnightly or monthly. The prompt and timely payment acts as a kind of incentive to the worker. This keeps him free from worries, thereby improving his efficiency.

8. Efficiency of Organization:

The efficiency of a worker also depends upon the people who organize and manage the production units. Updated machinery, equipments, tools, good working conditions and fair and kind attitude provided by the organization is reciprocated by the workers in the form of better work.

Cordial relation between the owners and the workers always help in increasing efficiency. If the workers are assigned the task of their liking and aptitude, it has a positive effect on their efficiency.

9. Behaviour of Employer:

The sympathetic, co-operative and helpful nature of the employer inculcates a sense of responsibility and sincerity amongst the workers, which in turn increases their productive capacity. Moreover, the improper behaviour of the employer may cause a conflict between employer and employee. This has an adverse effect on the overall efficiency of the workers.

10. Social and Political Conditions:

When socio-economic and political conditions are such that workers are free from the fear of unemployment and they get appropriate benefits during sickness, accident, disablement and old age, they morally feel their responsibilities and work with dedication and honesty. Social security schemes organized by the government provide a kind of feeling of security and workers act in a way which improves their efficiency.

Importance of Efficiency of Labour:

The concept of efficiency of labour is extremely important in economics.

There are several reasons for this such as:

1. Determinant of the Standard of Living:

Efficiency of labour directly determines the standard of living of the people in a country. Obviously, the more efficient the workers are, the higher will be the per capita income in the country. Per capita income is one of the most important determinants of standard of living.

2. Determinant of the Rate of Economic Growth:

Efficiency of labour is also an important determinant of the rate of economic growth in a country. Since, a higher level of efficiency of workers results in a higher level of per capita as well as national income, it also results in higher savings. These savings can be converted into a higher rate of capital accumulation and economic growth.

3. Better Maintenance of the Capital Stock:

An inefficient worker would not only produce a lesser output (or an output of inferior quality) but would also damage the machines and other equipment that he works with. In this sense, a higher level of efficiency of workers leads to better maintenance of the capital stock of the nation.

4. Better Upbringing of the Children:

Again, the more efficient workers are better paid than the less efficient ones (since the wage rate of a worker is largely determined by his or her productivity). The higher income level makes possible not only a higher level of current standard of living, but also a better upbringing of the children (by giving them better education and nourishment). In this way, it is ensured that the future citizens of the country will attain still higher levels of efficiency.

5. Increased Profits:

A higher level of efficiency of workers results in lower average costs of production and increases the profit of the enterprise. Thus, the employers also gain when workers become more efficient.

6. Lower Level of Product Price:

Finally, it should be noted that a lower level of average cost of production leads, in the long run, to a lower level of price of the product. The higher efficiency of the workers would result in gain for the consumer.

Causes of Low Efficiency of Labour in India:

The efficiency of Indian labour is comparatively low as compared to that of developed countries like U.S.A., U.K., Canada, Japan and Germany and accordingly the productivity is also low in India.

There are several causes for low efficiency and some are discussed below:

1. Hot and Enervating Climate:

India is a sub-tropical country and its climate is hot and enervating. It reduces the worker’s stamina for doing hard and continuous work for long hours. This is the most important natural cause of low efficiency of labour in India.

2. Low Wages:

Higher efficiency leads to higher income, workers get the incentive and they try to become more efficient. But the wages of labour in India are low in general and so is the standard of living. As such, the workers are not in a position to keep themselves physically and mentally fit and in sound health, also they have little leisure time for recreation. This becomes a cause of low efficiency.

3. Inadequacy of Machinery, Equipments and Raw Materials:

The availability of equipments and the supply of raw materials is not adequate. In general, the machines are either outdated or of poor standard or are in worn out condition. Besides this, the frequent breakdowns of machines and electricity cause the downfall in the productive capacity (or efficiency) of workers.

4. Uncongenial Factory Environment:

Many factories in India have poor and unhygienic working conditions. The facilities of canteen (i.e., low-cost meals), recreation and relaxation are not provided. This creates an uncongenial environment and affects the productivity of workers.

5. Worker’s Habits and Socio-religious Factors:

The cultural and religious inclinations towards spiritualism, in preference to materialism and blind faith and superstitions amongst the labour, causes reduction in their productivity. Besides, a large number of workers are alcoholic and gamblers. This altogether alters the attitude of workers towards hard work and in turn lowers their efficiency.

6. Migratory Character:

A very high proportion of workers usually come to work in factories from villages, when their agricultural activities are minimum. During the period, when the agricultural activities start, these workers take leave or remain absent from work. This type of migratory character lowers the efficiency of workers considerably.

7. Education and Training:

The workers, in general, do not have proper education and practical training about the work. To overcome this, the government is training a lot of workers, so that they get the required practical training and necessary education.

8. Inefficient Management:

The managers and organizers usually lack in originality, initiation, planning and creative thinking. Moreover, they are not interested in under­standing the labour psychology, they are more interested in exploiting the labour. This attitude ultimately leads to the reduction in overall productivity of the workers.

Suggestions for Improving the Efficiency of Indian Workers:

The Government of India is seriously interested in the overall economic develop­ment of the country and every possible step is being taken.

However, following are some suggestions, which will definitely help in improving the efficiency of workers:

i. The payment of wages should be fair and prompt. The government has, however, enacted the “Minimum Wages Act” for this purpose, so that each category of worker is paid according to the job he performs.

ii. A part of profit, earned by the concern, must be paid to workers as an incentive.

iii. Working conditions in the factories should be improved. Even though the Factory Act has clearly mentioned about the working conditions, the proper implementation and enforcement of same is needed.

iv. The total period of work per day should not be more than eight hours. In this regard also, proper enforcement of law is necessary. Also other facilities like holidays, leaves, etc., should be given to workers.

v. Social security network should be built up to protect the workers against illness, factory accidents, old age and unemployment.

vi. Effective steps should be taken to create awareness amongst the workers regarding evil effects of activities like gambling, drinking, etc.

vii. General and technical education and training facilities should be extended.

viii. Other fringe benefits like housing facilities, medical aid, group insurance, etc., should be provided to the workers.

viii. Besides all these measures, to be taken either by the employer or the government, it is essential that workers should not resort to practice of strikes and conflicts with the employer. They should also be co-operative which will ultimately benefit both the worker and the employer.

The labour unions should also motivate the workers to adopt constructive and positive approach, rather than instigating them to create disputes and conflicts.

ix. The more an employee knows, the more productive he can be. The Wentworth Mansion in South Carolina has received a Five Diamond Award four years in a row for exceptional customer service. Training employees on safety and ethics will also reduce downtime.

x. An incentive programme may be anything from a sales contest to offering more empowerment to employees. People tend to respond to extra rewards, putting the extra efforts in to win a gift card or prize.

xi. Modernisation means updating machinery, computers and any other equipment that employees may utilize in day to day operations.

The government has passed and enacted several legislations to improve the working conditions of workers. The enforcement of these laws is not satisfactory although the working environment has been found to be greatly improved since Independence.