THE LAW OF DIMINISHING MARGINAL PRODUCTIVITY OF LABOUR

Labour means The physical or mental works towards production in this process production the part of labourer is very very important .His work may be physical or mental ,but his contribution towards production is inevitable

The efficiency of labour can be measured through his productivity.Productivity means the efficiency of labourer in producing an output at optimum cost.

Productivity canbe divided in to two categories .They are Total productivity and Marginal productivity.Total productivity is the efficiency of a worker of his complete working hours or The skill of a worker producing output in a complete day.

Mrginal productivity means the the skill in producing in his marginal hour.That is his skill in producing an output in his last working hour of that day

"The Law of Diminishing Marginal Productivity of labourer"

"other condition remains constant The efficiency of labourer is diminishing gradually.His skill of producing will be less than the previous hour,he worked.His productivity will become zero there are chances to go negative "

It means If a worker is working eight hours in a day ,His efficiency in the first hour will be higher than the second hour .second hour skill of production is more than the third hour.In his last hour that is in the eigth hour his efficiency will be very very low .It may be zero or negative

It can be explained through a schedule

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Schedule showing the raltionship between Total,Average,Marginal

Productivity of Labor

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Working hour    TOT PRO   AVE PRO   MARGI PRO

1                         10                10                   10

2                         18                9                     8

3                         25               8.33                 7

4                         31               7.75                 6

5                         36               7.20                 5

6                         40               6.66                  4

7                         42               6 00                 2

8                         42               5.25                 0

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This law of Diminishing Marginal Productivity of labour can be illustrated with the help of a diagram

In xox The working hours of a labourer is measured

in yoy The productive capacity of a labourer is measured

Scale

in X axis 1 cm= 1 hour

In Y axis 1 cm 5 units

MN is the Total productivity curve

OP is the Marginal productivity curve

QR is the Average Productivity Curve

In this diagram we can come to a conclusion that Total productivity curves steeps from left towards right top up to certain level then it declines towards down. The Average productivity and Mrginal productivity curve too declines from it's 10 to 0 gradully and it will touch negative points too.From this that total productivity of a labourer is increasing gradually up to a certain point after that point His productive capacity remains same and it will go to reduce.Secondly marginal productivity of that labourer in his first hour is 10 units .It declines as 8 7 6 5 2 and as 0 in his last eighth working hour of that day

Assumptions

[1] Other conditions should be unchanged

[2] No inducements to that worker in between working hours

[3] No recriation or refreshment is given to that worker

[4] No break or change in his working environment

Excemptions

[1] This law will not work with a self motivated enterprenuer to achieve the more profits

According to this theory every concern which are taping old system of working hours will defintely affect by increasing cost because his working efficiency will be gradually decreasing hour by hour At his poor efficiency his usage materials and power cannot be optimum. Hence at these times The unit cost will be high

How to increse the productive potence of a company

Advantages

[1] It may split the three shifts as four insted of old three by doing this That company will get incresed productivity by a new set of fourth shift labourers The labour cost may not be high on comparing with their productivity

[2] It will reduce unemployment problems in developing nations like India

[3] Reduced working hours will increase the productivity of a labourer

[4] Industries and production of a nation will get a rapid growth

[5] More employment and earning income will tend a nation to wards prosperity

Drawbacks

[1] Reducing working hours of a labourers alone cannot fetch our desired results. some times it may fetch adverse results too by some mischievious workers

[2] If the fourth shift workers productivity is less that industry will have to face again the increasing cost of production

Conclusion

Drawbacks may be there ,To increase the productivity of a labourer and to reduce the cost of production and to reduce the unemployment problem Reducing working hours of a shift is necessary.