STRUCTURAL EQUATION MODELLING OF PRODUCTIVITY ENHANCEMENT

Productivity has often been cited as a key factor in industrial performance, and actions to increase it are said to improve profitability and the wage earning capacity of employees. Improving productivity is seen as a key issue for survival and success in the long term. This paper focuses on examining key factors of productivity enhancement, and investigating the causal relationships among those key factors to better understand and plan for productivity improvement. The results prove 5 key productivity factors, including ‘leadership’, ‘strategic quality planning’, ‘people’, ‘data and information’, and ‘process management’, leading to a conceptual model. ‘Leadership ’ is found to be the main driver to productivity enhancement. The strong commitment of a leader is thus crucial in improving productivity. ‘Leadership ’ strongly influences ‘strategic quality planning ’ and ‘process management’, and indirectly influences ‘people ’ through ‘data and information ’ and ‘strategic quality planning’. ‘People ’ also plays a key role in the success of productivity enhancement. Additionally, there are direct and indirect relationships between ‘data and information ’ and ‘people’ and between ‘data and information ’ and ‘process management’, respectively