Overall Labor Effectiveness as a Tool for Measuring Performance in a Given Company

Abstract

To remain competitive, a company needs to increase the productivity of its production equipment, which can be monitored using the Overall Equipment Effectiveness indicator. The article aims to describe the modification of the Overall Equipment Effectiveness indicator into the indicator of Overall Labor Effectiveness in a given company. The advantage of this indicator is that it monitors not only the use of the employee's labor pool but also the actual costs spent on the product. In addition to that, the impact of the introduction of this indicator on the economic performance of a given company is analyzed. To do so, four periods before and four periods after the introduction of the Overall Labor Effectiveness indicator were analyzed using four selected financial ratios. The value of the Overall Labor Effectiveness indicator is currently in the range of excellent values, i.e. the firm uses production time very efficiently. The results of the analyzed financial ratios show that the introduction of the Overall Labor Effectiveness indicator increased the performance of the given company.