Efficiency of labor plays an important role in the economic prosperity and progress of a country. They are also the factors affecting productivity of an industry. The greater the labor efficiency, the greater will be the economic development of a country. Efficiency of labor implies the capacity to do more work or better work or both. It is a known fact that efficiency of labor is not same in all countries of the world.

For instance, the efficiency of labor in developed countries like America and Russia is superior when compared to the efficiency of labor in developing countries like India, China, Pakistan and Philippines.

Factors Affecting Efficiency Of Labor

Efficiency of labour is influenced by several factors as mentioned below-

1. Racial qualities:  The first and foremost factor which decides the efficiency of labor is the racial qualities of the laborer. Normally laborers belonging to certain races, have strong physical strength, good intelligence and hard working nature. They get these qualities through their racial purity. For example, the Jats are described as intelligent and strong persons in the world. Similarly Pathans, the Punjabis and Rajputs are considered strong persons in rendering labor.

2. Factory conditions: The conditions prevailing in the factory also decides the efficiency of labor. If the factory is located at a place where fresh air, pure water and good ventilation are available, then the laborers’ efficiency increases. The factory location must be free from atmospheric pollution, water pollution and sound pollution.

3. Capital equipment: When laborers are provided with machinery and spare parts of superior quality, then they deliver their labor with great efficiency, For this the employers must introduce latest technology and up-to-date machinery in the factory. Labor efficiency will be less when they are asked to continue work with ancient, old and outdated capital equipment.

4. Personal qualities: Efficiency of labor is also affected by the personal qualities of laborers. If laborers have good virtues like devotion to duty, work-mindedness, honesty, sincerity, dynamic attitude, adjustability, intelligence etc., they carry the work efficiently. On the other hand, if laborer are indolent, lazy and corrupt, their efficiency cannot increase.

5. Educational standards: Education increases the knowledge and promotes the mental standards of laborers. Educated laborers, when compared to the uneducated ones, can perform critical and complex duties in factories. Hence, higher the educational standards, higher will be the efficiency  of labor.

6. Good clothing, food and housing : Efficiency of labor is also decided by the quality of food, type of clothes and house used by the laborers. Balanced diet with rich proteins and vitamins, superior clothes and good housing quarters enable the laborers to perform their responsibility with great efficiency. If laborers take food lacking of vitamins and proteins, they can’t perform their duties effectively. Similarly, if they are faced with the problems of ill-clothing and ill-housing, they can’t pay attention on work. Hence laborers’ efficiency will increase when they are provided with balanced diet, proper clothing and housing facilities.

7. Climate : Climate also decides the efficiency of labor. Favorable climate promotes the efficiency of labor. On the other hand, an unfavorable climate retards the efficiency of labor. If the climate is neither very cool nor very hot, then the laborers actively render their services. For example laborers in cool and temperate regions are able to do more work when compared to the laborers living in tropical regions.

8. Level of wages : Level of wages have direct impact on efficiency of labor. Laborers who receive wages promptly and properly perform their work actively than the ill-paid laborers. So the wages paid to the laborers must be rational, reasonable and sufficient to maintain a minimum standard of living. If laborers are paid less amount of wages, they can’t perform duties with full concentration and devotion. Hence labor efficiency is indicated by the level of wages paid to the laborers.

9. Working hours : The duration of working hours prescribed to the laborer’s must neither be too short nor too long. The duration of working hours fixed on rational and humanitarian basis helps the laborers to deliver their labor on efficient lines.

10. Trade unions : The nature and aims of trade unions also decide the efficiency of labor, If the trade unions are strong and sound, they can fight for the welfare of the laborers. Strong and powerful trade unions increase the bargaining power of the laborers. They can avoid injustice and exploitation of laborers by the management.

11. Entrepreneur’s ability : The ability of the entrepreneur decides the labor efficiency. The entrepreneur must take steps for carrying on the production without any interruption. He must act as a friend, guide and team leader of the laborers by mingling with them. Then only efficiency of labor increases.

12. Division of labor: Introduction of division of labor promotes efficiency of labor. As laborers perform a particular type of activity in the production of goods, they get familiarity and experience in their work. This increases the quantity and quality of production. Hence efficiency of labor is directly related to the division of labor.

13. Social security measures: Labors must be provided with security and protection against retirement, illness, sickness, accident benefits through sanction of leaves, salaries and other allowances. Then only efficiency of labors increases.

14. Prospects of promotion : Absence of promotion opportunities discourage the laborers to work efficiently. So able, hardworking and industrious laborers must be given promotion in their job. Then only laborers involve in their respective spheres of work.

Advantages of Efficiency of Labor :

There are several advantages of efficiency of labor. They are mentioned as follows :

1. Efficiency of labor increases the quantity and quality of output produced in an industry. As a result, goods and services are available to the people at lower prices.
2. Efficiency in labor brings several external and internal economies of production.
3. Efficiency of labor makes possible introduction of division of labors. It also enables adoption of latest machinery and up-to-date technology.
4. Economic development of a country can be achieved within a short period when efficiency of labor prevails in different sectors of an economy.