Measuring Productivity in Services

The wide variety of productivity measurement methods available for use in services is reviewed. The diversity of the service industries has meant that each field has developed its own productivity measures which have often not been widely disseminated due to the lack of a common professional literature. The available measurement approaches are outlined, including those from the health sector where there has been a sizeable effort at productivity research. A classification scheme is presented to assist in the description and selection of available service productivity measures. The classification scheme is based on (1) complexity of inputs and outputs, (2) degree of customisation, and (3) level of aggregation. The measures of services productivity reviewed are presented in terms of this classification. An approach is suggested for the manager to follow in selecting productivity measures according to this classification and other considerations. While some attributes of services make productivity measurement difficult, it is argued that it is not as problematic as some would think and that a number of approaches are available, especially for the comparison of service units which tend to be far more numerous and homogeneous than factories.