The chief factors which determine the efficiency of labour are the following:
(i) Physical Fitness : The health and physical strength of the workers act significantly to determine their efficiency. An unhealthy worker is dull and tired, his morale is low and absenteeism is frequent. Not surprisingly, the production suffers in quantity and quality. Physical health and strength depend on racial factors, climate and nutritious diet that is consumed in sufficient quantity.
(ii) Level of Education and Skill : For the modem factory system of production, there is a requirement of disciplined, intelligent and mentally alert workers who can work on complex and delicate machines. An educated and skilled worker will clearly produce more than an illiterate and inefficient person. Education develops responsibility in the discipline of the labour force, and towards the job, and the material and equipment with which it works.
(iii) Natural Resources : Favourable and moderate climate, rich mineral deposits and abundant water supply, availability of electricity and transportation, also affects the efficiency of labour. Cool and temperate climate is conductive for hard work. If the resources are of good quality and are readily available in adequate quantities, then the production per hour per worker will be more than at a place where the resources are of poor quality or not available in sufficient quantity.
(iv) Division of Labour : In these days of expertise, the efficiency of labour also depends on the degree of their expertise. Workers who focus with energy, mind, training and resources on different processes are relatively more efficient, because it is practice that makes humans perfect. This improves both speed and quality of expertise and enhances overall productivity.
(v) Amount of Capital per Worker : The efficiency of labour depends largely on the quantity of capital per worker. The greater the quantity of capital such as tools, machines, with which a worker works, the greater will be his productivity. In developing countries like India, availability of capital per worker is very low, therefore, no wonder, that his productivity is also low.
(vi) Quality of Capital and Technological Progress : The efficiency of labour is also a direct function of the quality of capital goods. The productivity of labour depends not only on the quantity of capital, but also on its quanlity. A worker working with better tools will be more productive than a worker who has inferior tools.
(vii) Organisational Methods : Organisational methods also affect labour efficiency. An efficient employer can do much to raise the efficiency of his labour force by an intelligent plant layout, proper distribution of work among his employees, efficient purchase of raw materials and the installation of advanced machines. Assembly line production has increased the labour efficiency exponentially by bringing the work rather than taking the workers to work. Similarly, employers should know that good lighting, proper ventilation and hygiene of factories can go a long way in improving labour productivity. Proper environment enhances the efficiency of workers.
(viii) Hours of Work : The number of working hours of a worker is also capable of affecting efficiency. After a stage, the extended-hours worker has more stress and fatigue and his productivity goes down because he works for more than several hours. Appropriate hours of work, with a reasonable interval between the work, provides the worker with the necessary facilities and increases his efficiency.
(ix) Fair Wages : Health and efficiency go together. The health and strength of a worker depends on the amount and quality of the food consumed by him. Underpaid workers are underfed, poorly clothed, and weak in health. How can we expect them to work as efficiently as a well-paid, satisfied worker? In all advanced countries, the economy of high wages is duly recognized. Moreover, prompt payment of wages when due is also conducive to labour productivity.
(x) Healthy Trade Unions : Healthy and strong trade unions are an asset, as management of well-organized labour is easier. The experience of advanced countries has proved that due to the impact of strong trade unions, the absentiesm and indiscipline of labour has become very low. Labour leaders, when taken in confidence, have a moderating impact on extremist tendencies.
(xi) Social and Political Factors: Social security enhances labour efficiency. If workers are insured in a suitable manner for unemployment, ill health, etc., they get a new mobility and feel inspired to do their best. Similarly, a skilled national government makes sincere efforts to create a national economy that can get a ready and enthusiastic response from labour.
