Labour Productivity in Medium Sized Retailing Firms
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This report focuses on the labour productivity in medium sized retailing firms. It includes a literature review on the factors affecting labour productivity and ways to enhance it in the retail sector.
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Business research Methodology
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1|P a g e Table of Contents Introduction................................................................................................................................2 Project Objective........................................................................................................................2 Project Scope..............................................................................................................................2 Literature Review.......................................................................................................................3 Conclusion..................................................................................................................................6 Reference List............................................................................................................................7
2|P a g e Introduction Business research Methodology is generally a process in which relevant information and data is collected for the purpose of making business decisions. The research methods can be publication reach, conducting surveys, interviews or using other research technique. While undertaking business research methodology present and historical information is carried. In this report, literature review is carried out on the topic labour productivity in medium sized retailing firm. Labour productivity is a term that can be measured by an equation that is total output divided by total input. The focus is on retail industry, thus retail productivity is maximizing the sale and minimizing the resources. Thus, medium sized industries are looking for a way in which productivity can be maximised as increasing the productivity will definitely increase the overall sale. By far the most influential and effective degree of the productivity is by measuring the sales system that is the average sale. Even a business with unsophisticated technology can very easily measure the average sale, but surprisingly they don’t. It is measured by dividing the total sales value ($) by the number of transactions. Project Objective The objective of undertaking this project is to find out the labour productivity in medium sized industries. It is true that medium sized industries faces many issues in terms of employees. Thus, all the issues and factors that affect the labour productivity of the industry are identified. With the survey it was found that employment productivity is a measure of labour input that is the efforts they are taking for the betterment. Labour productivity includes employees and their working proprietors which can be obtained from the Inter- Departmental Business Register (IDBR). It is said that medium sized industries do not have much resources thus there only resource that can help them to make the place in competitive market is labour and their productivity. Project Scope The aggregate scope from this project is to measure the productivity of retail industry. It was found in this project that measuring and accessing the productivity is not an easy task there are various difficulties. Productivity here means labour productivity that is the gross
3|P a g e value that is added by an employee r staff to the organisation. But in retail industry measuring labours input and output is a difficult task. Thus, the scope of this is to find to the factors that affect the labour productivity and ways it can be enhances in retail sector. Thus, the productivity can be improved by emphasis on cost control, keeping the prices low as compared to large industries, having a tight range management and offering high level of customer service. Literature Review According to(Scott and Walker, 2018), the labour productivity in medium sized firms suffers from many issues like lack of clarity and poor standardization measures. From the analyses it was found that, workers face many employment issues as medium sized industries do not have well-defined policies because of this reason they do not get much benefits(Scott and Walker, 2018). Middle sized industries focus on cost cutting so that they can earn maximum profit. But on the other hand, workers in middle sized industries get chances to learn and experience more things. They can an opportunity to think critically and make their own decisions(Garnero, Kampelmann and Rycx, 2014). It can be stated that labour productivity in retail sector is dynamic as they have a weak retail employment growth as compared to large organisations. The workers in medium sized industry face the issue of lack of clarity as they do not have much clear vision and change the plans as per the market (Investopedia, 2017). Labour productivity in medium sized organisations can be measured by many factors. One such factor is cost of labour, which is usually low as they are more focused in increasing the total cost of the company (Investopedia, 2017). This is because medium sized industries are focused on beating the other companies or by taking part in the competitive environment. To remain competitive they need to keep the cost down but workers need to offer better quality services(Foster, Haltiwanger, Klimek, Krizan and Ohlmacher, 2015). The labour experiences more productivity as they are forced to work more to enhance business efficiency so that profit margins are increased. In the views of (Clarke, Qiang and Xu, 2015), It was found that labour productivity is influenced by many factors. Thus, to achieve higher labour productivity medium size organisations focus on extending the fixed assets. The productivity of labour in medium sized industries is focused on skills and ability of an individual. As in medium sized industries they look for a labour force that has skills and brains to come with innovative ideas(Garnero, Kampelmann and Rycx, 2014). Apart from that, the success of retail industry is dependent
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4|P a g e on the external factors like the reliability of suppliers. The productivity of labour in medium sized industry is dependent on two factors that is output produced per period and the number of employees that are working(Garnero, Kampelmann and Rycx, 2014). Thus, it is suggested that in medium sized industry productivity can be improved by measuring the performance and setting high targets. The production process that is followed is a streamline approach. The productivity of labour is not efficient in medium size industry because they face issue like absence of banking facilities and limited amount of capital investment that is faced by the labour. Labours productivity is not that high as compared to larger industries because they work with old technologies as they do not have much funding to make new technology available(Fang, Memili, Chrisman and Penney, 2017). They also have ineffective marketing strategies because of this reason they are not able to reach to large audience. This can be overcome by asking labours to identify the new markets so that they get an opportunity to expand their venture. The productivity of labours also differs as medium sized industry as improper training session which degrades the knowledge of an employee. Thus, this issue can be resolved by having a top management so that they can focus on process innovation(Fang, Memili, Chrisman and Penney, 2017). According to(Garicano, Lelarge and Van Reenen, 2016), labour face various obstacles in medium sized industry due to the shortage of raw materials and other facilities due to which they are not able to maximize their productivity. The labour productivity is affected by the product related challenges like they do not get orders in a huge quantity. Due to this they lack in terms of standardization and find difficulty in introducing better substitutes(De Vries, 2014).The productivity is also affected by the manufacturing and distribution challenges like they have low production capacity. The productivity also reflects as they undertaken improper distribution system. The low level of technology and limited communication network do not allow labour to reach to larger market audience. Thus, the inadequate intellectual property is one of the reason due to which labours are not able to work efficiently (Siebert,2017). They also face major challenges of poor rewards and motivation. As in larger industries labours are awarded and appreciated for their work because of this reason workers take a forward step and work for betterment of the organisation. In retail industry, the productivity of labour in medium sized industry gets affected due to lack of government support and marketing support(De Vries, 2014). The productivity of workers can be enhanced by having a proper management that helps in finding out new markets. The main challenges labour faced in medium sized industry is lack of skilled manpower that are
5|P a g e taking part in manufacturing department of retail industry or taking part in marketing sector. The lack of skills will not allow them to capture larger audience. Apart from that, the multiplicity of labour laws offers compliance in the production(Bourlakis, Maglaras, Aktas, Gallear and Fotopoulos, 2016). The other reason for improper productivity is improper training and poor management of employees. The absence of work force planning causes poor industrial relations. There are some external factors that impact the productivity of workers like some of the cultural difference and some language barriers (Siebert,2017). Medium sized industry has poor management laws and lack of export infrastructure. In retail industry, lack of resources will not allow customers to integrate their services globally(Kang, Na and Kim, 2018). The productivity of workers can be increased if there is a proper plan and marketing study is complete. The productivity of employees in retail industry depends upon the sale of the organisation. The business environment needs to be successful and systematic for the employees to monitor all the services. The medium sized industries do not have high programmed technology which affects the quality of product and promote customer orientation. They do not have the ease to access the market. The retailers are facing waves of disruption as the competition is increasing day by day(Bourlakis, Maglaras, Aktas, Gallear and Fotopoulos, 2016). The productivity of medium sized retail industry is ignored as they are overtaken by big wholesale retail store(Parrotta, Pozzoli and Pytlikova, 2014). They are selling similar products and services but at a nominal price. But on the other hand, medium sized industries are taking the use of skilled and logistic labours so that they can deliver better opportunities to people. To optimize their work they are making use of highly productive workforce that work to meet customers’ expectations by reducing the cost(Kang, Na and Kim, 2018). In the view of(Li and Rama, 2015), workforce and productivity of employees is a critical aspect for medium or small sized organisations. The productivity of retail workers can be improved if there is a stable scheduling. Some of the operational factors that affect the productivity of an organisation are instability and inefficiency of employees. This can be improved by adopting quantitative and cost oriented approach that helps in managing the employees (Mishra,2017). The productivity and turnover of workers in retail industry is very important. This can be accomplished by having good management quality which helps help workers in improving their performance and its will be beneficial for the entire enterprise (Parrotta, Pozzoli and Pytlikova, 2014). It was found that workers in retail industries have high commitment to deliver products and services on time, thus this can be accomplished by
6|P a g e offering performance based rewards. So, that they get motivation to perform better and optimize their working capacity(Park,Yaduma, Lockwood and Williams, 2016). The performance is linked with turn over. The labour productivity is generally affected by the conflicts that occur in the firm due to lack of management skills that are generally hard to observe(Berlingieri, Calligaris and Criscuolo, 2018). From all the research, it was found that productivity is influenced directly by the management. To be more presided, it is management bias in the production sector of retail firms. They also face issue due to lack of clarity regarding the decision. The retail industries need clarity in measurement regarding what need to be done next(Park,Yaduma, Lockwood and Williams, 2016). The productivity of works is also dependent on analysis and interpretation that offers strategies as well as tactics in which retail business should follow. Conclusion Thus, from this report it can be concluded that medium sized workers face issue in their productivity as they have lack of resources and technological support. They do not get opportunity towork on high tech platform. In this report, the discussion is about labour productivity that is known as workforce productivity. The growth of labour productivity in medium sized industry can be measured by economic output. Thus, labour productivity can be increased id the output entered by them is increased but in a minimum time. The productivity is inversely related to the labour time.
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7|P a g e Reference List Berlingieri, G., Calligaris, S. and Criscuolo, C. (2018). The productivity-wage premium: Does size still matter in a service economy?. InAEA Papers and Proceedings(Vol. 108, pp. 328-33). Bourlakis, M., Maglaras, G., Aktas, E., Gallear, D. and Fotopoulos, C., (2016). Does firm size influence sustainable performance in food supply chains: Insights from Greek SMEs. InDevelopments in Logistics and Supply Chain Management(pp. 253-265). Palgrave Macmillan, London. Clarke, G.R., Qiang, C.Z. and Xu, L.C., (2015).The Internet as a general-purpose technology: Firm-level evidence from around the world. The World Bank. pp. 28-33 De Vries, G.J., (2014). Productivity in a Distorted Market: The Case of B razil's Retail Sector.Review of Income and Wealth,60(3), pp.499-524. Fang, H.C., Memili, E., Chrisman, J.J. and Penney, C., (2017). Industry and Information Asymmetry: The Case of the Employment of Non‐Family Managers in Small and Medium‐ Sized Family Firms.Journal of Small Business Management,55(4), pp.632-648. Foster, L., Haltiwanger, J., Klimek, S., Krizan, C.J. and Ohlmacher, S., (2015). The evolution of national retail chains: how we got here, pp. 38-39 Garicano, L., Lelarge, C. and Van Reenen, J., (2016). Firm size distortions and the productivity distribution: Evidence from France.American Economic Review,106(11), pp.3439-79. Garnero, A., Kampelmann, S. and Rycx, F., (2014). The heterogeneous effects of workforce diversity on productivity, wages, and profits.Industrial Relations: A Journal of Economy and Society,53(3), pp.430-477. Investopedia,(2017).Labor Productivity.Available from https://www.investopedia.com/terms/l/labor-productivity.asp.pdfAccessed on 03 SEPT 2018. Kang, Y.H., Na, K. and Kim, Y.S., (2018). Labor Productivity In Emerging Markets: Evidence From Brazil, China, India, And Russia (BRIC).The journal of Applied Business Research,34(2), pp.325-338.
8|P a g e Li, Y. and Rama, M., (2015). Firm dynamics, productivity growth, and job creation in developing countries: The role of micro-and small enterprises.The World Bank Research Observer,30(1), pp.3-38. Mishra,A.(2017).Retail Productivity: Concept and Analysis for an Emerging Retail Sector.Available from http://research.iimb.ernet.in/bitstream/123456789/518/1/wp.iimb.336.pdfAccessed on 03 SEPT 2018. Park, S., Yaduma, N., Lockwood, A.J. and Williams, A.M., (2016). Demand fluctuations, labour flexibility and productivity.Annals of Tourism Research,59, pp.93-112. Parrotta, P., Pozzoli, D. and Pytlikova, M., (2014). Labor diversity and firm productivity.European Economic Review,66, pp.144-179. Scott, P. and Walker, J.T., (2018). Retailing under resale price maintenance: Economies of scale and scope, and firm strategic response, in the inter-war British retail pharmacy sector.Business History,60(6), pp.807-832. Siebert,S.(2017).Labour Turnover and Labour Productivity in a Retail Organization.Available from http://ftp.iza.org/dp2322.pdfAccessed on 03 SEPT 2018.