The marginal product of labour is one of the most important and influential economic concepts in the labour productivity, We are looking at how we can improve the satisfaction of our employees and the achievement of our short, medium and long term business goals. The topic is important and that is why today we are going to investigate about causes that may affect this marginal product. Will you join us?
You probably know what is the marginal product of labour, But as this blog is read by both experienced and inexperienced professionals, we believe it is worth dedicating a brief section to clarify this term and note an example.
Very simply put, we could say that the marginal product of labour is that extra or additional product that is created when we increase by one unit to the amount of work we use for production.
The marginal product of labour is a concept that is easy to understand if we think about a exampleImagine that you have a shoe factory with three automatic machines and two employees. Each worker operating a machine is capable of making 10 shoes a day. If you increase your workforce by hiring an employee, the marginal product of labour of that new employee will be 10 since (without changing any other productive circumstances) that person will increase the daily production of your factory by 10 units.
But imagine you hire a fourth worker Do you think that this fourth worker will also have a marginal product of labour of 10 more units? The answer is “no” because this new employee will will not have its own machine to work with and you will have to organise your shifts differently so that your marginal product of labour continues to grow, or at least does not fall into a downward curve.
In the example in the previous section we have already given you a hint about one of the two most frequent causes of the decline in the marginal product of labour: not to take into account the machinery that you need a new employee to do your job with maximum efficiency. If you hire an extra employee, but do not buy an extra machine to make his shoes, your daily production will probably increase, but you will still have to pay for the extra machine. the marginal product of labour will not of that new employee and, perhaps, decreases the marginal product of labour of that other employee with whom he or she will have to share the machinery if they work the same shift.
The first cause of the decline in the marginal product of labour is clear to see and very useful for the new entrepreneurs who believe that the larger their workforce, the higher their production and the better their economic performance. But there are a second cause of the decrease of this value which is more difficult to see and correct than the first, a cause that transcends numbers and formulas: demotivation at work.
Imagine that you change your shoe factory for a new one. shoe production line where employees work side by side on a treadmill. As you increase the number of workers, you are supposed to the marginal product of labour of each of them will grow, but there will come a time when there will be a time when there will be so many people working together that will be upset personal conflicts will arise, the working environment will become rarefied, If one of them goes faster or slower than the other, quarrels will arise... All of these personal problems will translate into a feeling of unhappiness of your workers, This is a feeling that will demotivate your staff and negatively affect the value of the marginal product of labour which you are looking to increase through massive recruitment.
Can this second cause be corrected? Yes: by implementing a series of measures that improve the feeling of happiness, commitment and productivity of your valuable staff without increasing your costs.
