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Sunday, July 11, 2010

Learning and Productivity Functions

Frustrated with your own or worried about your employees’ low productivity (and hence, lesser output) in the initial stage of a new assignment or a project?! Well, then don’t be! Because that is how it is for most of us. Have a look on the curves in the graph below.

What do you notice!?

- Phase I: Learning is quite rapid in the early phase of a project that you must be able to sense by now from your own experience. However, productivity (output per unit of time) is very low in the same phase.
- Phase II: As you continue spending more time on the project, you will realise a significant drop in the additional learning while a rapid increase in the additional output for every additional unit of time spent, i.e. enhanced productivity. Also, observe how the output curve lags the learning curve during the life of the project.
- Phase III: If you spend further time on the project after a certain point of time productivity also starts falling, i.e. the additional output for every additional unit of time worked is lesser. The significant decrease in the productivity and the rate of learning are classic applications of the law of diminishing returns.

1. 100% time is taken as the time required to achieve approximately 99.8% of the learning and completion of the project.
2. Quality of the work done is a component of the total output.

Note: The data points mentioned in the graph are representative to illustrate the change in the productivity and the rate of learning with time. Actual observations from a real project environment must be used to fit the model for the specific project with-in a particular industry, and with particular type of workforce and levels of capital and technology employed. In addition, absolute value of the time taken for learning and completion of the different percentages of the project may vary vastly with the industry, specific type of the problem, and capital, technology and educational background, knowledge and skill set of the workforce employed.
From an employer’s perspective learning of the workforce involves cost while output generates revenue. As long as the revenue generated from the output at the end of the project is more than the cost of learning, employer makes profit and is happy with the employees.