This article throws light upon the top six methods for enhancing productivity growth. The methods are: 1. Stimulating Research and Development 2. Placing more Emphasis on Manufacturing 3. Changing Incentives for Making 4. Increasing Labour-Management Co-Operation 5. Tightening Existing Controls 6. Change in Government Policies.

Method # 1. Stimulating Research and Development:

Almost everyone agrees that an economy as a whole should spend more on research and development. This is why many governments stimulate industrial R&D via extended credit and a reduced corporate tax rate.

Method # 2. Placing more Emphasis on Manufacturing:

Economic growth is often accompanied by various structural changes. One such change is slow growth of the agricultural sector and a faster growth of the manufacturing sector. It is now held that basic manufacturing processes might hold the key to improved efficiency and productivity.


For raising produc­tivity, it is necessary to concentrate on new-product activities. This is why modern firms concentrate on new-product activities where production techniques are easily modified as old products are dropped and new ones added.

Method # 3. Changing Incentives for Making:

A third strategy for improving productivity involves changing employee incentives, especially in governmental and other non-profit-seeking organisations.

Method # 4. Increasing Labour-Management Co-Operation:

Another approach to improving productiv­ity is to increase co-operation between labour and management. This can be ensured through the introduction of such schemes and worker participation in management or profit sharing.

For improving labour productivity, it is necessary to increase employee participation in decision making and problem-solving. This scheme has gained popularity largely due to the introduction of Japanese management techniques, especially Theory Z and quality circles. A quality circle is a group of employees who meet periodically to discuss problems regarding quality, output and similar issues.

Method # 5. Tightening Existing Controls:


Another way to improve productivity is to tighten controls so as to eliminate inefficiency and increase individual output. However, if everyone is subjected to increased pressure for extended periods of time, morale suffers and employees may leave the organisation.

Method # 6. Change in Government Policies:

Another way to improve productivity is to change gov­ernment policies. Decreased regulation would free organisations from administrative con­straints that tie-up employees and limits productivity.

Likewise, tax credits for capital investment would encourage spending for new plants and equipment. Finally, monetary and fiscal policies aimed at reducing inflation would also facilitate long-term investment and increased spending on research and development.

These six approaches are the most commonly endorsed methods for improving productivity of labour and other factors. Thus organisations that follow the right path may be able to enhance productivity as a part of strategic control even in the worst of times.