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Most of the organizations emphasize the high value of productivity to sustain continuity in business for a long time. Losses in production can impact all sizes of the industry. Sustaining productivity in an organization requires a healthy work environment for the employees. A number of factors are responsible for the decline in the productivity of the organization. 

These factors result in reduced performance and result in negative productivity. Loss of production risk may include technological factors and internal relationships between the managers and employees., outdated management techniques, outdated manufacturing equipment, fear of loss, poor communication or poor delegations, organizational safety, unexpected breakdown during the manufacturing process and sometimes health issues with the employees. The major loss in productivity observed is due to procrastination.

All these issues add time to the production process and production falls short of goals. Other factors like malfunctioning of the machines (OEE-Overall Equipment Effectiveness), utility supply shortages, human errors, weather conditions and the other factors which are in the control of the company policies. Loss of productivity forces an organization to adopt creative alternative ways to deal with the problem, which ultimately results in productivity losses. However, preventive measures can be taken to minimize loss in productivity, with less financial impact by implying proper planning with proper managerial skills.


What are the elements responsible for loss of productivity?

The following are some of the elements responsible for the loss of productivity. We will be discussing it one by one in detail.

    1.   Effect of technology for loss of production.

    2.   Selection of equipment and down time due to loss of production.

    3.   Due to illness and Organization Safety.

    4.   Low productivity due to insufficient resources.

    5.   Poor management results in stress in the work place.


       1. Effect of technology for loss of production.

You must have observed a lot of employees spending a lot of time on mobile phones. Technological developments have always helped in the improvement of productivity for any organisation, but due to the development in smart phones, which can be linked with the help of internet to different social media sites like Facebook, tweeter, snap chat, Instagram, WhatsApp, YouTube and many more sites have provoked the employees to get entangled and engaged in it. You may find some employees spend time playing online games, watching advertisements, downloading different applications. Lots of sites attract people to work online and earn money. Here, to earn extra income online, employees started spending time online. Very few people find the right way to earn online, others waste time on it. This time can be productively utilized in productive organizational activities.


            2. Select the right equipment to reduce    
       Downtime and loss of production:  

Let us take an example of the laundryindustry. When the machines are installed at any of the laundry sites. Capacities of the equipment are always designed as per the production required per day. It is expected to run out of equipment for a long time, giving good, designed production without a break down. Many of the contractors are seen buying economic equipment to save on initial investments in capital goods. Unfortunately, if the procured equipment is not robust enough to withstand the long hours of production in a day and fails after some days, then what will happen? 

There will be costly downtime issues that will arise as production gets held up. Here is how the Overall Equipment Effectiveness comes into the picture. Restarting the equipment incurs the cost of spares, service charges from the technician and tremendous loss in the production and subsequent loss in the revenue generated. In a continuous process where there has to be a particular amount of production to be done every day. 

The stock of the washed linens gets exhausted till the machine gets repaired. The working hours on the other equipment increase to cop up with the required production and subsequently the plant fails to produce the required number of linens and the operating issues start with the discussions with the higher management. Downtime can escalate dangerously when it happens unplanned. Downtime has the potential to be expensive for the company.

To prevent this from happening, it is very important to procure this robust equipment first hand to avoid chaos. Hence, one should avoid saving in the initial capital equipment cost and concentrate to keep the operating cost to a minimum.    

             3.  loss of productivity due to illness and
         Organization Safety.  

Work Place Environment plays a vital role in the performance and in the productivity of the employees. Employee productivity gets reduced due to the unsafe and unhealthy environment. If the workers are injured due to a non-safe environment there will be absenteeism of the important workmanship, which will hamper the production of the organization. 

Due to illness of the employees the organization suffers a loss of in production so also the company has to pay these employees, which is a cost to the company. Herzberg in his two factor theory describes how the organization can influence the work place. These two factors are: Motivators- Which can encourage the employees to Work Harder and Hygiene factors: Employees get discouraged if hygiene factors are not maintained.

          4.   Low productivity due to insufficient

Adequate professionals and trained laborers are the resources of any organisation, which helps in production and expansion of the business. There could be a shortage of trained professional personnel’s to work in a particular department, which can and lead to low productivity due to underutilized opportunities. Employees leave the organization without prior explanation or intimating that the organization leads to a sudden vacancy in the organization. The company has to act first to fill such positions to make sure that the available resources are utilized. Low labor supply could also lead to low outputs of production. 

            5.  poor management resulting in stress in
        the work place.

Ineffective management develops stress in the work place, which ultimately affects the productivity of the organization. The management is responsible for making different strategies to improve the productivity of the organization. Inefficiencies in implementing the different strategies in the organization can lead to the lack of productivity in the organization. Mode of communication, the relations of the manager with different employees and the confidence of the managers in themselves and with the employees play a major role in achieving the healthy atmosphere in organization.  

Inadequate staffing to excessive tasks can lead to the development of stress in the employees in the organization. High level of stress in the employees need not be as productive as it supposed to be, which ultimately results in absenteeism in the work place. By reviewing the employees’ performances, the managers can find out the weaknesses of the employees and correct accordingly in the benefit of the organization. Other stresses caused may be due to unclear supervision fear of causing conflicts and tensions in the labors. Reduced efficiency in the production can be caused due to workers in stress.

   Low Productivity impact on the employees:

Low productivity leads to low morale of the employees and subsequently they fail to perform as per their expected requirement, these employees starts becomes the liability to the company, because the company can work without their contribution. Sick employees due to illness or unsafe working conditions increase cost to the company, reason being that the company has to pay those unproductive employments. 

Technological improvements like smartphones hamper the physical status of the employees, as they use the smartphone till late at night, which makes them unfit to work long hours the next day. These technologies lead to misuse of the employer facilities or the resources provided to the employees leading to the underutilization of these resources for the right purpose. Organizations with this risk of the low output which lack the competitive environment, which reduces the market share and reduces business profits.

      Strategies to Protect the Loss of

Daily targets have to be decided with daily reporting strategies and setting up targets to achieve targets for the next day. This data is basically used to analyze the productivity on a regular basis of each employee to evaluate the completion of the task assigned to them. A meeting has to be conducted to guide the employees to redirect them in the direction of the organizations goal achieving directions. This method enables step by step evaluation to determine the employee’s efficiency in the work place and how effectively they have completed their allocated duties. The employees should clearly communicate with the tasks they have completed and plans of the next duty. Employees should highlight the obstacles when working.


To reduce downtime losses in productivity, the following are the preventive measures taken by the Organisation:

     1.   Accountability:

Employees should be reminded that they are accountable for the work assigned to them. This analysis is done and communicated to the employees from the reports collected on a daily basis. They should be asked about the difficulties faced to achieve the allotted duties, instead passing the blame to supervisors or colleagues.


     2.   Setting achievable targets for employees:

Employees who think that they are over loaded with the targets which are not achievable should be relaxed to achieve targets to boost the confidence lost by the employees and elements the probability of work stress. Some challenges which the employees feel can be achieved will boost their level of confidence. But if the difficult challenges persist this can become a source of stress to the workers again.

      3.   Awards and Rewards:    

Rewarding employees in their excellence of work. Rewards should be given in a fair manner otherwise it will lose its meaning. A manager should not only criticize the employees; he also should complement the employees for the good work done. Employees should not feel undervalued, otherwise they shift to organizations where they are recognized. 

      4.   Calculating Down time losses:

How much money the company loses due to down time is never calculated by the authorized person, maybe it is neglected for a short down time. But this short down time collectively calculated over the year makes a huge difference. 

Downtime losses are: labor loss, complaints by the party, production loss, extra hours required to compensate for the production required. All this has to be calculated as a loss because ultimately it is a cost to the company.

  5.   Technology to detect the expected
       equipment breakdown:

Nowadays there are technical methods and sensors available to warn of the breakdown in advance. The unusual rise in the temperature of equipment, more noise than usual and more vibration, which cannot be understood manually.

The breakdown detecting sensors is very cost effective as the cost of break done is huge compared to the cost of detector sensors.

      6.   Data and reporting System:

Collecting real time data ERP Software can be used. Automated manufacturing equipment, which is used today, sends machine health monitored history on a regular basis. Checking equipment in real time keeps product quality high.  

       7.   Employee training:

Training employees regularly keeps them smart and alert. Keep them motivated in their field of expertise. Productivity gets enhanced, as they feel that they are taken care of by providing timely training to them.

A good operator understands his machine very well, he comes to know that this particular machine requires maintenance. And proper action in advance can be taken by the preventive maintenance team. 

       8.   Schedule regular maintenance and

Regular maintenance reduces the chances of break done and saves downtime. In the long run the life of the machine also increases, which again saves the cost of early procurement of new machine.

As we do the maintenance of our vehicles by changing oil, washing and cleaning it regularly. Similar care has to be taken of the machines, to use it to maximum productivity.

        9.   Machine Records:

Generally small companies do not have the practice of keeping the records of the production and aligned machines used in the organization. Machines like Motors, Compressors, D.G Sets, Reactors, Welding Machines, Grinders, Drill machines, Cutting tools these are some of the machines used in almost all the manufacturing units. 

The maintenance department has to keep the records of each and every machine like when they are produced, their technical specifications, when the routine maintenance done, what all parts changed. All this helps to enhance the life of the equipment.  

       10.   Keep Backup:

Do not forget to keep the backup of each and every machine used in the operations. Keep the memory backup for the software, keep the production backup keeping stand by equipment. Keep the emergency spares in stock, which takes long delivery times after procurement. In addition, regular maintenance back up is kept to avoid downtime in production.  

       11.    Monitoring:

Keep monitoring the employee regularly to see whether the employee is not wasting time which results in productivity. If the electronic media is distracting the employee, then it should be kept away from the employee. 

The number of times sick leave is taken by the employee should be monitored by the supervisors or managers.  

      12.   Proactive:

The managers or the higher authorities should take proactive measures for the expected disasters. It is the activity of the managers to keep the company environment friendly. This helps to keep the productivity and the image of the company in the market.  


It is said that prevention is always better than cure, hence pro-activity can be the best strategy for the business, to prevent risk, before they occur. This can be done by applying a conducive working environment to minimize the risks of loss of productivity.

Maintaining a healthy work environment should be the strategy of the managers.   

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