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Nine Main Benefits of Higher Productivity

Benefits of higher productivity

The following image depicts a list of nine benefits of higher productivity.

Benefits of higher productivity

Image credits © Prof. Mudit Katyani.

The nine main benefits of higher productivity are:

  1. Higher profit,
  2. Employees welfare,
  3. Better return
  4. Nice relations,
  5. Customer satisfaction,
  6. Good credit rating,
  7. Goodwill,
  8. Better credit terms, and
  9. Low turnover.

Now let's discuss briefly these important benefits of higher productivity.

  1. Higher profit : Higher productivity enables the company to produce more output. This results in more profit to it. This profit can be used for expansion and other activities.
  2. Employees welfare : Higher productivity brings more profit to the company. This profit can be used to provide better facilities and working conditions to the employees. So, it results in welfare of the employees.
  3. Better return : The company gets better return on investment due to higher productivity. So, they pay a better dividend (share of profit) to the shareholders. The market price of the share will also increase.
  4. Nice relations : Higher productivity results in nice relations between the management and the employees. Good working conditions, facilities and incentives motivates employees to give their best to the organization.
  5. Customer satisfaction : Higher productivity results in better customer satisfaction. This is because customers are provided with good-quality products at low prices. Satisfaction of customers will result in their loyalty towards the company.
  6. Good credit rating : Higher productivity results in a good credit rating by financial institutions. This will enable the company to get cheap funds from the market to meet working and fixed capital requirements.
  7. Goodwill : Due to higher productivity, the company will have a good corporate image (goodwill) in the minds of social entities. This includes: The shareholders, government, suppliers, financial institutions, customers, etc.
  8. Better credit terms : Higher productivity helps the company to get better terms from the suppliers. The suppliers may give better credit terms due to its goodwill.
  9. Low turnover : Higher productivity enables the company to provide better facilities and working conditions to the employees. This will make the employees loyal. Hence, employee turnover and absenteeism will reduce.


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